- Overview: Learn about IRS liens and IRS levies.
- Problems: Understand the problems associated with IRS liens and tax levies.
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Solutions: The W.L. Henry law firm’s goal is to solve your back tax problems. Find out how the firm can help provide a solution to a variety of tax issues, including release of liens, removal of levies, and assistance with IRS back tax settlements.
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Schedule an Appointment: Schedule a free consultation with a tax lawyer. Colorado office locations are conveniently located in Castle Rock and Colorado Springs. We offer a free phone consultation if you reside outside the Denver or Colorado Springs metro area or in another state or country.
Even if you are not sure if you need a tax lawyer, the firm is happy to discuss your tax issues and point you in the right direction.
Overview
IRS Tax Levies
A tax levy is an actual seizure of property to satisfy a tax debt. Once an assessment is made, the IRS has the authority to seize most property with an administrative tax levy, which means that the IRS generally does not have to go to court to levy a taxpayer’s property. The person who has possession of the levied property (for example, a bank) must surrender the property or be held liable.
The IRS generally must send three notices before a levy is permitted: notice and demand, notice of taxpayer due process rights, and the notice before levy (either a Notice of Intent to Levy or Notice of Levy). Not all of the notices, however, will be required if the IRS believes that collection of the tax is in jeopardy.
The IRS performed 3.8 million levies in its 2007 fiscal year.
Examples of IRS levies include:
- Seizing and then selling your house, boat, car or other property.
- Levying property held by a third party: wages, retirement accounts, bank accounts, rental income, accounts receivable, or cash value of life insurance.
- Levy of a state tax refund.
A levy normally occurs after the IRS sends a taxpayer a Notice and Demand for Payment and a Final Notice of Intent to Levy and Notice of Your Right to A Hearing, which occurs at least 30 days before the levy.
IRS Tax Liens
A general federal tax lien, also known as a “statutory” or “silent” lien, arises after a person who is liable to pay tax fails to pay the tax shortly after it is demanded. The federal tax lien (also known as an IRS lien) is effective from the date that the IRS assessed the tax. The lien applies to all property and all rights to property. Tax liens give the federal or state government a legal claim to your property (such as your car, home, or boat). A lien does not actually seize property.
After a federal tax lien arises, the IRS can file the lien in the public records, which gives your creditors notice that the IRS has a claim against your property. A public filing gives the IRS priority over certain creditors. Companies and individuals may be reluctant to do business with you because of the tax lien.
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Problems Associated with IRS Tax Liens & IRS Tax Levies
Once a tax lien is filed, the IRS can generally levy, seize, and sell your property—without going to court—after giving you 30 days notice of its intent to levy. Even if the IRS does not levy immediately, a federal (IRS) tax lien may harm your credit, make it hard to get a loan, and make it difficult to sell your property. Businesses and individuals may be reluctant to do business with you.
Trying to avoid the lien by giving your property away will not work. Any property you give away is still encumbered by the IRS tax lien; the transfer might be set aside as fraudulent; and you might be risking criminal liability—many taxpayers do not realize that it is possible to go to prison for back taxes. If you work to come into compliance with the tax code, however, the IRS will normally not refer the taxpayer for criminal prosecution.
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Solutions
The IRS can only levy property if the levy is procedurally and constitutionally acceptable. The W.L. Henry law firm examines a variety of levy defenses. For example, there may have been an illegal levy by IRS agents. An illegal levy gives the taxpayer rights against the IRS. Illegal use of levy also includes, for example, levying property before a tax assessment was made, levying property before demanding payment, levying property that was not effective to seize the property or violated the levied party’s constitutional rights.
The W.L. Henry law firm examines a variety of levy and lien defenses, including:
- Whether the assessment of tax was properly made
- Examine the statute of limitations for collections
- Examine if the taxpayer has property rights in the property to be levied and subject to a federal (IRS) tax lien.
- Whether the collection procedures followed were fair
- Whether the property was exempt or not subject to a levy
IRS collection laws are complex and require professional tax assistance. IRS levy assistance provided by the firm involves removing, preventing, and negotiating with the IRS. Back tax settlements can be achieved by using offers in compromise, penalty abatement, installment agreements, and negotiation.
The IRS must release a federal (IRS) tax lien when the liability becomes legally unenforceable or the lien is satisfied. The W.L. Henry tax law firm can help determine if the lien is enforceable and devise strategies to minimize the effect of tax liens.
The firm uses offers in compromise and installment agreements where appropriate. In addition, we try to minimize or avoid the filing of tax liens and levies during negotiations to avoid the problems associated with those collection instruments.
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Schedule an Appointment
Schedule a free consultation to discuss your case with a tax lawyer. Colorado office locations are conveniently located in Castle Rock and Colorado Springs. If you are out-of-state or out-of-country, a telephone conference can be scheduled. All initial consultations by phone or in one of our Colorado offices are free.
Even if you are not sure if you need a tax lawyer, the firm is happy to discuss your tax issues and point you in the right direction.
Schedule a free consultation:
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