Falling behind on your taxes can happen very quickly, and tax debt is among the hardest to overcome. Not only are there few alternatives for eliminating tax debt, but the IRS has power to claim the money you owe without seeking the court order that most other creditors need. While the government gives you plenty of warning, you may still be shocked to discover how far the IRS will go to obtain the taxes it says you owe.
You may receive notices in the mail with the intimidating logo of the IRS on the envelope. Like many who are burdened with debt, you may put them aside without opening them. However, these envelopes contain information you need to proceed with debt repayment. If you are facing a mountain of tax debt and have taken no steps to qualify for an installment plan, you may find yourself the subject of a tax levy.
The IRS can levy your assets to repay the tax debt it says you owe. This means the agency can take your money or property without obtaining a court order. There are numerous options for the IRS to levy your property, including the following:
- Garnishing your wages: The order will require your employer to withdraw a percentage of your earnings and send it directly to the IRS until you have paid off what you owe.
- Withholding future tax refunds: If the IRS owes you money for overpayment on future taxes, you can expect that refund to go toward your tax debt.
- Seizing your property: The IRS may place your house, cars or other assets for sale to pay toward your tax bill.
- Levying your bank accounts: After freezing your account, the IRS can withdraw your funds up to the amount you owe, even if it empties your account.
None of these events occur without ample warning from the IRS, and even if you receive notice of an impending levy, there are still steps you can take to stop the action from happening. For example, while it is not possible in every situation, your circumstances may qualify for bankruptcy relief. Under the right conditions, filing bankruptcy can put a stay on any actions against you.
However, even if bankruptcy will not ease your tax burden, a skilled New York attorney may be able to negotiate with the IRS to resolve your debt in a more positive manner than through levies.