Can the IRS Really Take Your House or Bank Account?
Unfortunately, the short answer is yes, the IRS can take your house or bank account. But before you start packing your bags or hiding your piggy bank, let's delve into when this is possible, when it's unlikely, and the bureaucratic hurdles the IRS must clear first. As Mark Twain humorously said, "The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin."
Understanding Tax Liens and Tax Levies
Let's break it down simply. A tax lien is a public notice filed, usually at your county clerk's office, that attaches to all your property—real and personal—wherever it may be. Imagine it as the IRS putting a sticky note on your house saying, "This belongs to us until you pay up!" Practically speaking, this means you can't sell your property without clearing the lien first. The good news? As of 2015, tax liens no longer affect your credit score or report. Hooray for small victories!
What is a Tax Levy?
On the other hand, a tax levy is a bit more aggressive. Think of it as the IRS's version of a "grab and go." It's akin to a garnishment, similar to what happens if you don't pay child support. The IRS can garnish your wages or bank account and even seize your car or real estate. But don't panic just yet; they have to jump through some hoops first.
When Can the IRS Issue a Levy?
Before the IRS can issue a levy, they must send you a final notice of intent to levy, which arrives via certified mail to your last known address. If you're a nomad, you might miss the memo. However, if you've been settled in one place for years, expect that certified letter to land in your mailbox. Remember, "Ignorance is bliss" doesn't apply here. Pick up your mail! As the saying goes, "You can't fight what you don't know."
Most people I represent have jobs, so when the mailman comes knocking, they're not home. The mailman leaves a little orange slip in the mailbox saying, "Come on down to the post office and pick up your mail." It's crucial to collect your mail because if you don't, you won't know what the letter is about. And if you don't know, you can't hand it over to me to figure out our next steps.
The Final Notice of Intent to Levy
This notice can be one of three letters: a CP90, a Letter 1058, or another letter that simply states "Final Notice of Intent to Levy." It's definitely not a CP504. If you receive a CP504, rest easy—it's not the final notice. Once you get the final notice, you have 30 days to appeal. During this time, the IRS cannot levy you. However, if 45 days have passed, the IRS can levy your wages and bank account. Curious about how much money you're allowed to keep if they levy your wages? Check out Publication 1494. Spoiler alert: It's not much, so act quickly to get those levies lifted!
Bank Levy vs. Wage Levy
A bank levy is a one-time event. The IRS can only seize the money in your account on the day the levy is processed. The bank holds the funds for 21 days, allowing you to dispute it. If unsuccessful, the money goes to the IRS, and it's gone forever. A wage levy is more persistent; it continues until released or the debt is paid. Neither option is appealing, so it's best to address it promptly.
If you have more questions about IRS tax resolution issues, feel free to visit our website at getirshelp.com. Remember, "In this world, nothing can be said to be certain, except death and taxes," as Benjamin Franklin wisely noted. But with the right help, you can navigate these taxing times!
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