Types of Tax Levies
Last updated February 29, 2008
If you find youreslf unable to pay your taxes, you will be saddled with a tax levy. The IRS has several methods of collecting the money you owe them:
- Wage garnishment
- Bank Levy
- Asset Seizure
- Trust Fund Seizure
The Effectiveness of Garnishing Wages
Wage garnishment has become an effective and punitive method for the IRS to collect on overdue taxes. Because people need money to pay for their living expenses, they must continue working, which guarantees payment to the IRS. Although helpful for the IRS, this situation is not helpful to employers, now saddled with extra paperwork and accounting tasks. Many people are humiliated by disclosing their financial troubles to their employers or to payroll staff. In addition, the stress of losing a portion of one's salary can result in tension and problems at home. Wage garnishment brings with it a whole host of negative consequences that can be avoided with the right knowledge and help.
Understanding Wage Garnishment
The process of a wage garnishment begins with the IRS serving an employer with a court order. The court order demands that the employer send the IRS an allotted sum from an employee's paycheck until the individual's tax obligations are fulfilled. The amount withdrawn from most garnished paychecks is often considerable, which often leaves people unable to make ends meet. Although it is impossible to anticipate how much of a person's paycheck will be levied to the IRS until it happens, one fact is certain --wage garnishment is one of the most taxing and difficult situations that people can face.
Bank Levy
One way for the IRS to get the money you owe is to file what is called a "Third Party Levy." This is a legal order sent, for example, to your bank telling them to freeze the money in your accounts.
IRS Liens
After these three events have taken place, you'll receive a notice in the mail informing you that the IRS has put a lien on your property. If you sell your home, the IRS tax lien must be paid out of any equity in the property.
Asset Seizure
The IRS has broad powers to seize assets to pay your tax liabilities. After the IRS has seized this property, it becomes the property of the United States Government. They will attempt to sell it at public auction. The IRS will advertise in local newspapers that they have seized your property for nonpayment of taxes and that such property is available at public auction.
The Benefits of Receiving Professional Help
When people are saddled with a massive amount of tax debt, one way to address it, while avoiding the dread of wage garnishment, is through knowledge. By learning about current tax laws, the recent changes to these laws and the best ways to apply them, people can approach the IRS with the confidence needed to seek a solution. If there is no time to learn about taxes or the internal procedures of the IRS, then the best step to take is to find an experienced tax specialist.
Tax relief professionals have the essential knowledge to deal with the IRS and possess experience navigating through the maze of the tax settlement process. With a clear understanding of the system, they know best how to approach the IRS and skillfully negotiate a solution for their clients. In addition, tax relief specialists understand the options and their potential outcomes. Most importantly, professionals can help people avoid suffering through the unsettling and degrading experience of wage garnishment.
Tax Levies | Types of Tax Levies | Offer in Compromise
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