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IRS Tax Levy: Protect Your Assets with Nashville Tax Solutions

If you’re facing IRS tax levies or wage garnishment, your assets are at risk of being seized. The IRS will continue to pursue collection actions until you pay what you owe, set up an arrangement to pay off your balance over time, or make other arrangements with the IRS.

At Nashville Tax Solutions, our team is here to help protect your assets from the IRS. Contact us for help as soon as you get an IRS notice in the mail.

What Are IRS Tax Levies?

IRS tax levies are the seizure of your assets to satisfy your tax debt. The IRS has the right to seize nearly any assets you own – there's only a short list of exempt assets.

However, the IRS won’t levy your assets unless it has sent you multiple notices with no response. The final notice gives you 30 days to request a Collection Due Process hearing or pay, and if you don't take action, you'll face a levy.

It’s important to understand how a levy differs from a lien. A federal tax lien is something the IRS will file as a public record that alerts your other creditors of the IRS's interest in your property. A tax levy is the actual seizure of that property.

While IRS tax levies are intimidating, and you never want to lose your assets, acting immediately can help you prevent IRS asset seizure. It’s always best to talk to an expert at Nashville Tax Solutions when you’re dealing with a tax levy.

What Kinds of Property Can the IRS Levy?

So, what assets do you have to worry about losing when the IRS is coming after your property? Here are the main types of assets the IRS is allowed to seize:

Wages: One of the most common IRS levies is wage garnishment. The IRS can take a portion of your wages from each paycheck to cover your debts. They only have to leave you a small exempt amount based on your filing status and number of dependents.
Bank accounts: Any kind of financial account you have, such as checking or savings, may be at risk with IRS levies. The agency can even seize joint accounts.
Personal property: Your real estate investments, vehicles, and valuables can be seized.
Retirement accounts: Most retirement investments can be seized by the IRS, but the agency generally seizes retirement accounts as a last resort.
Social Security benefits: Just like wages, Social Security income can be levied to cover your tax debts. However, the agency cannot take children's survivors' benefits or the one-time death benefit. They may also need to leave a portion of your payment to cover living expenses.
Other income: If you have other forms of income aside from retirement and wages, like rent payments or commissions, those may be at risk as well.
Business assets: If you owe taxes for your business, such as payroll taxes, the agency may go after business assets, including inventory, equipment, vehicles, bank accounts, and even accounts receivable.

Unfortunately, the IRS can levy many different types of assets when you owe taxes and continue to ignore notices. If you’re still unsure what’s at risk, ask a tax professional about the law.

How Does the IRS Levy Property?

Remember that the IRS must follow a process, and you’ll be notified about unpaid taxes well before a levy is issued. Here’s a brief look at how the IRS pursues a tax levy:

Tax Assessment

First, taxes are assessed. When you file a tax return, you’ll receive a tax bill that you need to pay by the deadline (usually April 15 for annual filings). Even if you don’t file a return, the IRS could still assess taxes based on information the agency receives from other parties, such as your employer.

IRS Notices and Demands for Payment

If you miss the payment deadline, you’ll start getting notices in the mail. These notices outline your original tax balance plus any penalties and interest charges for being late. Typically, you’ll receive Notice CP14, CP501, and CP503.

Notice of Intent to Levy

If you ignore the prior IRS notices and don’t act to rectify your balance, the IRS can then send you Notice CP504, Notice of Intent to Levy. This notice means that if you don’t act immediately, your assets are at risk of seizure.

Letter 1058 or LT11

Failing to respond to CP504 means you’ll get Letter 1058 or Notice LT11 in the mail next. This letter gives you 30 days to respond before the IRS will levy your property. This notice also outlines your rights to a Collection Due Process (CDP) hearing.

Levy Attachment

After that point, the IRS can attach a levy to your wages or bank accounts to start seizing your assets to pay for your tax debt. This means the IRS will contact your employer or bank to start the garnishment or levy.

If the agency decides to seize physical assets, such as personal property and real estate, it will hold the property for a certain amount of time to give you a chance to dispute the property's valuation. Then, the IRS will move forward with an auction. The proceeds will be applied to your tax debt. There is a redemption period where you can buy back seized assets, but you must pay interest.

How Urgent Are IRS Tax Levies?

An IRS tax levy is not to be taken lightly. Levies can disrupt your finances and cause major losses. Your accounts could be frozen, you’ll lose income, and your physical assets could be seized.

As such, time is of the essence with an IRS tax levy. As soon as you receive IRS notices that indicate you were late and owe money, act immediately. The IRS will only continue to ramp up its collection actions until you pay, so you should never ignore an IRS notice.

When you need help stopping or preventing an IRS levy, contact Nashville Tax Solutions right away.

How Do I Stop a Tax Levy?

Fortunately, you have time to act after receiving a levy notice from the IRS. Here’s what to do to prevent or release a tax levy:

Pay Your Tax Debt in Full

The fastest way to prevent a levy from happening is to pay what you owe. If you’re able, send in your payment for the full balance. You can usually pay online easily.

Request an Installment Agreement

If you can’t pay everything right now, consider a payment plan. If you owe less than $50,000, you can log in to your online account with the IRS and request an installment agreement; otherwise, you'll need to call or mail in an application. This way, you can make monthly payments to pay off your debt, and the IRS will no longer come after your assets if you stay current on the agreement. However, you may want to talk with a tax professional to make sure this is the best option for your situation.

Apply for an Offer in Compromise

If you can’t make payments even with an installment agreement, consider sending in an offer in compromise. The IRS may agree to settle your debt for less under this option. However, you'll have to submit a financial disclosure, proving that your offer is the most you can afford. There are high rejection rates and nuanced aspects of this process, so you may want to work with a tax professional.

Request Currently Not Collectible (CNC) Status

Currently not collectible (CNC) status is for taxpayers who are experiencing financial hardship. The IRS will put a pause on your account and won’t try to collect from you until your situation improves.

Appeal

If you want to challenge an IRS collection action, there are a few different appeal options. For 30 days after the IRS sends the Final Intent to Levy, you have the right to request a CDP hearing. You have up to a year from that notice to request an equivalent hearing. Once the levy is proposed or initiated, you can appeal through the Collection Appeals Program (CAP). To ensure you're using the right strategy, you should strongly consider working with a tax professional.

Get the Levy Released

The IRS may agree to release your levy if you’re going through an immediate economic hardship, if

You pay the full amount owed,
The levy was issued in error.
The period for collection ended before they issued the levy, or
Releasing the levy would help you pay off your balance.

In general, even if the IRS releases a levy, you still have to pay off your full tax balance.

Our Process

How Can Nashville Tax Solutions Help?

Initial Consultation

We begin with a detailed review of your situation to understand your levy status and immediate options. We’ll customize our approach to your unique circumstances, so we want to know every detail about what’s happened so far.

01

Comprehensive Financial Assessment

Our team of tax experts will examine your financial and tax records to determine the best approach to stop or prevent the IRS levy.

02

Tailored Strategy

Next, we develop a customized plan that could include negotiating a payment plan, submitting an offer in compromise, or filing an appeal.

03

Skilled Negotiation with the IRS

We communicate directly with the IRS on your behalf to request a levy release or propose a sustainable alternative. You won’t have to worry about dealing with the IRS yourself to make this happen.

04

Ongoing Support and Prevention

After resolving the levy, Nashville Tax Solutions will help you stay compliant and avoid future IRS collection actions.

05 Why Partner with Nashville Tax Solutions?

Expertise and Reliability

We have over two decades of experience resolving IRS collection issues, including tax levies.

Proven Results

Our team has proven success in releasing and preventing tax levies.

Personalized Approach

With Nashville Tax Solutions, you’ll get personalized service tailored to your financial situation.

Local Expertise

Our experts know how to deal with the IRS. But we can also help you navigate problems with the Florida DOR.

Comprehensive Support

We communicate regularly and support you from the start of your case up to resolution and beyond.

Peace of Mind

Our clients gain peace of mind knowing assets and rights are protected.

Act Now to Prevent IRS Tax Levies

Don’t wait to act when you receive a notice of intent to levy in the mail. Take immediate action by reaching out to Nashville Tax Solutions to set up a discovery call.

The longer the wait, the more you risk losing your property.

Our Answers

Frequently Asked Questions

The IRS may file a federal tax lien when you owe taxes. That alerts other creditors, title companies, and buyers that the agency has an interest in your assets due to tax debt. An IRS tax levy is an actual seizure of your property.

A few ways to prevent tax levies include responding to IRS notices immediately, paying off your tax debt, setting up a payment plan, or requesting an offer in compromise.

The IRS can garnish your wages or seize your bank accounts, real estate, retirement accounts, or valuables to cover your tax debt. The agency can even take your home in some cases. Only a few assets are exempt, such as a small amount of personal belongings, school books, tools of the trade (up to a certain value), workers' comp payments, certain types of disability payments, and an exempt amount of income.

Yes, our team will review your case and help you act quickly to avoid asset seizure. We can negotiate with the IRS on your behalf or help you set up a payment plan to stay in good standing and avoid levies.

You can ask the IRS to release a tax levy if you’ve paid the debt, you’ve set up a payment plan, or you’re dealing with an immediate economic hardship.

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