The statutory authority of the IRS allows it to legally seize property when taxpayers fail to pay taxes. A levy is an administrative action by the IRS which takes property, real or personal, to satisfy a tax debt. While a tax lien is a legal claim against property to secure payment of the tax debt, a levy is of much more concern to taxpayers since it actually seizes or takes property to satisfy the tax liability.
No court permission is necessary for the IRS to levy property as §6331 of the Internal Revenue Code (“Tax Code” or “IRC”) provides the aforementioned statutory authority for the IRS to utilize levies for the collection of delinquent taxes. While in some cases the IRC may exempt property from levy, any property or right to property may be levied by the IRS. Property encumbered by a Federal tax lien may be levied.
The Fifth Amendment of the U.S. Constitution prohibits the government from taking property from any individual without meeting requirements of due process. The IRS must therefore provide a taxpayer with notice of the levy and an opportunity to be heard. §6330(a)(2) of the Tax Code mandates that the IRS must send a notice to an affected taxpayer by either personal hand delivery, or certified mail, and this notice must arrive at least thirty days prior to the levy.
To levy property, the IRS must meet three requirements:
- The IRS must have assessed some tax;
- The IRS must have sent a Notice and Demand for Payment; and
- The tax must not have been paid.
Once these three events occur, the IRS will then typically send a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days before the seizure of property in order to satisfy notice requirements related to standards of due process.
It is important that taxpayers negotiate with the IRS to pay this debt, preferably before the IRS levies property. The attorneys at Loan Lawyers may help any taxpayer negotiate a settlement with the IRS of any delinquent tax debt.
Otherwise, taxpayers that fail to pay taxes or make arrangements to pay or settle this debt, will subject themselves to the very real possibility of an IRS levy. In addition to property such as a home or automobile, the IRS may levy bank accounts, retirement accounts, dividends, wages, commissions, rental income, accounts receivables, licenses, or even the cash value of life insurance.
If you have received an IRS Notice and Demand for Payment and/or Final Notice of Intent to Levy and Notice of Your Right to a Hearing, call Loan Lawyers, Our debt relief attorneys in Fort Lauderdale will help you negotiate the settlement and resolution of any and all tax debt. Contact our office today by calling 954-523-HELP (4357) and see how we can help.