I received an “Intent to Levy” notice from the IRS. What do I do know?
If you’re behind on paying taxes, the IRS will notify you with a 1058 Letter, the “Intent to Levy”. With this, the IRS may either seize your assets and property or garnish your wages in order to satisfy the levy. The IRS is required by law to deliver a written notice that states the intent to seize property, along with your right to appeal the levy, a full 30 days before the action takes place unless there are extraneous circumstances. Of course, the IRS needs to make sure that you actually receive the Intent to Levy, so it may be sent to your home, given to you in person, or officially certified as a piece of mail.
Because you only get a 30-day window to deal with the Intent to Levy, you must act quickly. If you owe less than $20,000 to the IRS, chances are you can set up a repayment plan based on installment arrangements. Luckily, this type of payment plan will immediately stop the IRS’s Intent to Levy, but you are required to follow the plan accurately as per your end of the agreement. If you owe more than $20,000 in back taxes, obtaining a manageable payment plan is much more difficult to achieve. You will want to consider hiring an experienced tax attorney who can act as a liaison between you and the IRS while negotiating a reasonable plan. This is important because, without an accommodating monthly payment plan, the IRS might seize your property or garnish your wages to an extent where your personal living becomes strained. A tax attorney can file an appeal with the IRS, giving you a real chance to put the levy to rest. If the appeal isn’t approved, you and your attorney have the choice to go to tax court.
In some cases, bankruptcy may be the answer. There are some circumstances in which your back taxes may be discharged through bankruptcy, but eligibility requirements vary depending on the situation. For instance, a prerequisite states that your back taxes must have been owed for at least three years from the due date of the taxes. A great tax lawyer will evaluate your situation and work hard to arrange the best avenue of recourse for you, whether that may be an installment arrangement or filing for bankruptcy.