How IRS.gov Collects on the Taxes that You Owe When You Are Indebted to IRS.gov
The US government may use a slew of IRS Levy types to collect on you Owe the IRS if you have an obligation to pay the IRS. Obviously, the IRS will send you plenty of notifications ahead of time well before www.IRS.gov Levies are implemented, but if you decide to ignore these notifications of your past due Tax Debt, you should be aware of the different avenues the IRS may take to make up for what you Owe the IRS.
Notices of a www.IRS.gov Levy
The United States government is able to implement an IRS Levy only after the total monies owed to the IRS has been figured, and you have been mailed a "Notice and Demand for Payment" regarding what you owe the IRS. The notice must also have been postmarked at least thirty days prior to the www.IRS.gov Levy being implemented. An IRS Levy may be implemented on practically any of your properties to recoup the Tax Debt that you Owe the IRS. The three major kinds of IRS.gov Levies the United States government can utilize to collect the Tax Debt that you Owe the IRS are detailed here for you.
IRS Levy #1: Your Bank Account
It is completely within the law to seize the available assets currently sitting in your bank account to satisfy a Tax Debt you Owe the IRS. First, the IRS will notify your bank of their intent to place a Tax Levy as a result of your outstanding IRS Tax Debt; your financial institution is legally bound to abide by the IRS' request. Your money is then moved to a collateral account for about three weeks, during which you can attempt to find a Tax Debt analyst to either get the IRS Tax Levy discharged or pay off the Tax Debt you Owe the IRS through any other means, eg credit cards, loans, borrowing from loved ones. If within these twenty one days, you are not able to come to a repayment agreement with the U.S. government on what you owe the IRS, the www.IRS.gov Tax Levy can be implemented to cover your IRS Tax Debt.
IRS Levy #2: Your Pay
Your wages and state tax returns can all have an IRS Levy issued on them. The IRS will again attempt multiple contacts beforehand, but if you ignore the IRS, an IRS Levy on your earnings to satisfy your Tax Debt will be enforced. The IRS will first mail a notice to where you work letting them know of their intent to levy your income to satisfy what you Owe the IRS, and just as with an IRS.gov Levy on your Checking and Savings Accounts, your employer must withhold part of your wages and submit it to the government as payment on the Tax Debt you Owe the IRS. The IRS will typically garnish between 50% to 75% of your pay to apply towards your Tax Debt, leaving you with enough to take care of your basic necessities (food, rent, etc.).
IRS Levy #3: Your Personal Belongings
The property levy is the next most common IRS.gov Levy to recoup Tax Debt. The US government seizes your personal belongings with the property IRS Levy, and sells them in order to put towards the Tax Debt you Owe the IRS. An IRS Levy on your house is the most common www.IRS.gov Levy on properties, though the IRS can also take and sell your cars, boats, antiques, and so on, to satisfy what you owe. In essence, anything that can be sold and has value is used to repay what is owed to the IRS. Approximately 1 month before the www.IRS.gov Levy to pay off what you Owe the IRS is really applied, the US government again will submit to you a letter of its intent to execute an IRS Levy on your properties. During this time, it's in your best interests to negotiate an agreement for a settlement plan that will cover your IRS Tax Debt before your possessions are sold.
IRS Tax Levy Dismissal
An IRS.gov Levy for your Tax Debt can only be discharged when you've completely satisfied what you owe, you have agreed to a payment agreement with the IRS to satisfy your Tax Debt, or the ten-year Statute of Limitations for the U.S. government to recoup what you owe has concluded.