LIENS, LEVIES and
GARNISHMENT
What they are and how you get one
A LIEN is a public notice that someone
has a legal right to your property. A LEVY is when the IRS has the legal
right to take what is deemed to be their property from your bank accounts. A
garnishment is a notice to your employer to send a portion of your paycheck
to the IRS.
The IRS issues LEVIES to get your
attention when you have failed to respond to their stream of letters and you
have failed to pay your tax due. A LEVY can be issued at any time you have
an existing tax debt so that the IRS has some collateral if you should
continue to not pay them.
THE IRS LETTER CAMPAIGN
The IRS does not just
come out of the blue and slap a Lien or Levy! -- The IRS
issues a lien or levy because you have ignored all previous communications
attempts. The lien or levy is used to basically "get your attention". Of
course, if you don't mind the levy, the IRS is happy to take your money.
IRS
TIMETABLE – Once you have a tax assessed, the following time
table occurs. This assumes you never call or write to the IRS during this
process. Most of this correspondence is handled by the Automated Collection
System (ACS).
Day
1 - Tax Assessed
Day
45 - CP14 - Request for Tax Payment (IRS Sends a bill)
Day
90 - CP501 or CP502 - Reminder Notice - Balance Due
Day
105 - CP503 or CP504 - Urgent Notice - Balance Due (We Intend to Levy)
Day
135 - CP523 - Notice of Intent To Levy
Day
165 - CP 297 - Final Notice of Intent to Levy
Day
165 - CP90 - Notice of Your Rights to a Hearing.
Day
195 - Levy sent to your bank. Bank freezes your accounts immediately and
seizes funds specified by IRS notice. Bank must hold funds for specified
period of time
Day
225 - Bank must remit funds to IRS.
There are some letters that the IRS uses
for specific situations which may have different numbers, but basically they
are the same sequence and spacing.
What WBTax Can Do To
Help
The first thing the IRS wants from you
is some communication. But be careful! If you call the IRS yourself, you're
likely to be barraged with collections questions, such as where you bank or
where you work. You may be inadvertently giving the IRS more ammunition in
the battle for your money.
In a case where a levy or garnishment
order has been issued, we often can stop them before the IRS gets your
money. However, if the levy has already been acted upon, it is difficult, if
not downright impossible, to get your money back.
Certain banks also do not follow the
instructions from the IRS. A frequent violator is Wells Fargo. The order
from the IRS to levy a bank account is good for just one time. Whatever is
in your account on the day the bank gets the notice of levy is what gets
seized. However, Wells will often continue to take funds out of your account
as fast as it comes in during the entire 30 day hold period. There's not
much you can do to stop them short of suing them. So don't let the IRS get
this far in the process.
We can also work with the IRS if you
have a lien on real property. In many cases, we can get the IRS to release a
lien in order to refinance or sell your property.
Don't wait until the lien, levy or
garnishment order has been sent! Call us as soon as you have any IRS intent
notices so that we can work out a solution for you that you can afford.
Remember, you don’t need to talk to the
IRS. You don’t need to make excuses. But, you must take the first step. Call
our office and set up a confidential, no cost appointment and we’ll lay out
the simple steps for you to get back into compliance with the IRS.
