Tax Levy Ohio
What is a Tax Levy?
There is a process that the IRS puts in place when an individual or business does not pay his, her or its taxes and fails to file for bankruptcy in a timely manner. The next appropriate action – usually as a last resort – is a tax levy.
A tax levy is a legal seizure of a taxpayer’s property to pay their unpaid taxes. Unlike a tax lien, a tax levy is not simply a claim on the assets but it’s an actual confiscation. Unless the Internal Revenue Code (IRC) exempts the property, any assets that a taxpayer owns or has interest in is eligible to be levied.
Tax Levy Types
The type of levy selected by the IRS depends on the taxpayer’s situation, although the assets that are most easily liquidated are usually seized first. Common forms of tax levies include:
- Wage Garnishment – The IRS may request that your employer deducts a certain amount from your paycheck until the tax debt has been satisfied. If a tax attorney proves your financial hardship, however, the wage garnishment amount can be lowered or eliminated.
- Property Seizure – This may include any asset, including your car and home, to settle the tax debt.
- Bank Levy – The IRS can request that your bank deduct funds from your account.
- 1099 Levy – While the IRS can seize 1099 payments currently owed to you, it has no claim on any future payments.
- Other Assets Seizure – This may include rental income, life insurance, retirement benefits, dividends, or any commissions.
- Passport Seizure – If you owe $50,000 or more, the IRS can request that your passport is revoked or denied.
Tax Levy Process
Before the IRS can issue a tax levy, the following actions must take place:
- The IRS evaluates your tax debt and issues a “Notice and Demand for Payment”.
- You fail to pay the tax bill by the deadline.
- The IRS issues a “Final Notice of Intent to Levy” and “Notice of Your Right to A Hearing 30 day”. The notice may be issued in person, at your home, or at your workplace, or sent to your last address on file.
Avoiding a levy requires action, and you are strongly encouraged to speak with a qualified tax attorney about your situation to determine the ideal course of action. Tax Attorney Kenneth L. Sheppard, Jr. of Sheppard Law Offices is committed to negotiating arrangements that are best for you and not the federal or Ohio taxation authorities.