What Is An IRS Levy?

Taxes are the way the government earns money to support all that it does. And IRS levy is something that happens when one does not pay one's taxes for too long. So, if you did not pay your taxes in time and have received the notice of federal tax lien, it means that you are in the bad books of the government and you should change it as soon as you could because that would certainly not be good for you creditworthiness.

You must take a federal tax lien seriously because if you did not take it seriously and did not sort things out with the IRS you might be in deep trouble at the hands of the government. After IRS tax lien, you would get an IRS levy, which is a harsh step towards getting the taxes from you.

On account of the way IRS levy works, it has gathered a nightmarish reputation. Most of the people confuse IRS levy and IRS tax lien. They are two different things. A lien is actually a tax lien filed against your properties. With a tax lien on your property your rights on the property are curtailed but your property remains yours. And the IRS cannot actually seize your property with a lien.

It is after the IRS realizes that a lien is not working with you and probably would not work in the near future that it resorts to the levy. With an IRS levy the IRS can actually seize your property and sell it cheap to recover taxes. So, the moment you come to know of the levy, it is important that you act right away so that things don't get worse from there.

An IRS levy immediately freezes your rights and ownership of the property and the IRS gets the ownership and the IRS could sell your property off to recover taxes. Naturally, it is nothing short of a nightmare. Your property goes to the government and they get the right to sell it off.

So, if you have not been very prompt with your taxes and have also ignored tax liens, you might be in for a tax levy. The first IRS levy is usually with respect to your bank account. The IRS gets in touch with your bank and your bank will have to immediately freeze your account. After your account is frozen, you'll not be able to take a penny out of your bank account. Not only will you get not money, but your money will be sent to the IRS within 21 days. You can come out of bank levy only if your account has more money that the taxes you owe to the government.

The tax levy can be imposed on any property you have including your house and car. However, they would send quite a few notices before proceeding with a levy. Pay due attention to the IRS levy notice, so that the levy does not hit you hard. If you owe the taxes, pay up before they hurt you bad.