IRS Collection Process
Need Brief Description
You’ve received a notice from the IRS, before you panic or choose to ignore it, it is important to understand the different actions the IRS can take with regards to the money you owe. Step 1 is a Lien. Step 2 is a Levy. Step 3 is Seizure.
Federal Tax Lien
A lien is a formal assessment of taxes owed to the government (US Department of the Treasury) against property and rights to property owned by the taxpayer at the time of the assessment, as well as any new property owned during the life of the lien. The Notice of Federal Tax Lien (NFTL) is recorded with the county or state where the property is owned by the taxpayer. It also serves as an advisement to creditors that you owe money to the government.
The good news is that you generally have ten days to respond to this notice before the lien is filed. This is the best time to contact Loggins Kern & McCombs. We can respond on your behalf and stop the next step in the IRS process, Levy.
Federal Tax Levy
A tax levy is an administrative action by the IRS, under statutory authority, without going to court, to seize property to satisfy a tax liability. A levy can be placed against assets held by a third party like wages, bank accounts, and social security payments. They can also levy upon assets in the possession of the taxpayer such as a personal residence (Seizure).
Loggins Kern & McCombs is here to help! We can request an appeal on your behalf to avoid a levy on your assets.
Seizure
The federal government takes possession of your property/assets. The US Supreme Court forbids the government from taking any action against an individual without due process of the law. Accordingly, the IRS will send Notice of Intent to Levy and Notice of Your Right to a Hearing which gives the taxpayer 30 days to respond. They then seize the assets and prepare to sell by first setting a minimum bid price, giving you a chance to challenge the price, and placing announcements of the sale in local newspapers and flyers. After the sale, all costs of the seizure and costs of the sale are deducted, and then your tax debt is deducted with any remaining money being refunded to you.
Again, Loggins Kern & McCombs can assist in filing the necessary forms to request a hearing as well as help with alternative collection actions (i.e. installment agreements, offer in compromise) best suited to your tax situation.