As a dedicated tax professional, your ultimate goal is to help clients navigate the often-challenging world of tax resolution. One crucial aspect of this process is addressing tax levies, which can significantly impact your clients’ financial well-being. In this comprehensive guide, we will outline the essential steps to resolve tax levies quickly and efficiently, empowering you to provide the best possible assistance to your clients. By understanding these steps and implementing effective strategies, you can alleviate the burden of tax levies, restore financial stability, and enhance your tax resolution practice’s reputation for success.
I’m going to answer the top 3 questions we continually get regarding IRS levies.
What is an IRS Levy?
An IRS levy permits the IRS to seize, take any assets that belong to the taxpayer, whether it’s their cars, their paycheck, their bank accounts in order to satisfy a debt that is due to the IRS. The debt could be from taxes, from payroll, from penalties, whatever it could be and the IRS is legally allowed to do so.
What’s the difference between a lien and a levy?
So, one of the biggest questions we usually get is, what’s the difference between a lien and a levy? A lien puts the public on notice that there’s a tax debt due to government, it’s usually filed with the conorary corner’s office or the secretary of state in the case of a corporation or LLC. And it puts the public on notice that there’s a balance due to the IRS. It does stop you from selling any real estate or major assets because that lien attaches to all assets that the taxpayer owns. A levy, on the other hand, is the actual taking of those assets. It’s where the IRS levies your bank account and takes whatever is in the bank account or takes the payroll, your payroll monies. And that’s where that goes.
Is it safe for me to now deposit money?
The second question we’re often asked is, ”The IRS levied my bank account. Is it safe for me to now deposit money?” Well, the answer to that is…maybe. You know, the IRS levy attaches to the monies that are in the account at that very moment. Not the next day, but at that very moment that the bank opens up that envelope saying the bank account is levied. If I put money into that account ten minutes later, that money is not attached. If I put money into the account before then, it is attached. Now, this is not to say that the IRS cannot issue another Levy on that same account. So, the money went in tomorrow, they could send out another levy the next week or whatever. So, that’s something that you need to be very, very careful of.
Can the IRS access joint accounts?
And, the third question that we’ve been getting a lot of which is a very harsh one to listen to, is you know, when the IRS sends out a levy if I hold an account with my son, can they take the monies that are in that account? Well, the answer there is quite simple, yes they can take those monies that are in that joint account. So, if it’s an account with your mother, your brother, your kids, whatever it is, your job in order to have the IRS release those monies, is to prove to them is that the money actually belongs to your parent or the kid and you’re just on it for convenience. Not always a hard thing to prove. The bank levy attaches to everything in that account immediately and the IRS will send the monies over to the IRS in approximately 21 days. They’re supposed to hold the monies for that period of time.
So, you have the ability to work with the IRS on all ends. So, if you want, you can come on down here and watch a demo of how the software works that will help you work with the IRS or just sign up for our free trial and we have all the videos in there that will show you step-by-step what the IRS is looking for.
Watch an IRS Solutions Demo on steps to resolve tax levies!