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Understanding federal tax levies in Georgia

Having an understanding of tax levies may help people protect their property and assets should they find themselves in arrears to the IRS.

In an April of 2017 report, ABC News stated that uncollected taxes in the U.S. totaled as much as $280 billion, a balance that has continued to grow. When people in Georgia and elsewhere who are unable to pay their taxes do not make arrangements with the Internal Revenue Service, the agency may take a range of enforcement actions. One such option afforded to the IRS by the U.S. tax law is the ability to levy taxpayers’ income or property. In order to better protect themselves should they be in a situation where they owe back taxes to the IRS, it may be helpful for people to have an understanding of tax levies.

What is a tax levy?

Levies are legal property seizures. Through such actions, the IRS may confiscate property or rights to property belonging to taxpayers who have delinquencies. This includes wages and other income, bank account balances, vehicles and real estate holdings. Those assets may then be liquidated or otherwise applied towards people’s tax debts.

What if the levy causes a hardship?

Most people understand their obligations to pay state and federal taxes, and thus, nonpayment of such taxes is often the result of an inability to pay. Consequently, tax levies issued by the IRS may cause them significant hardship. In such cases, people may contact the IRS and work with the agency to have the levy lifted. While this does not release them from their liability for the debt, it may allow them the opportunity to set up a payment plan or other arrangement for settling the balance.

With regards to tax levies, economic hardship is specified as the lack of ability to meet reasonable and basic living expenses. Taxpayers who are seeking hardship releases may be asked to provide financial statements and other information to show the effect of the levy on their ability to adequately provide for themselves and their families.

When are tax levies released?

Once a levy has been placed on their property, taxpayers must act to see it released. In addition to economic hardship, the circumstances under which the IRS may release a tax levy include the following:

  • The debt is paid in full
  • The taxpayer has entered into an installment agreement
  • The value of the levied property is more than the debt
  • Collection efforts will not be impeded by release
  • A release would help the taxpayer to pay his or her taxes

Further, the IRS may release levies when the period for collection had expired prior to their issuance and when such orders are otherwise issued improperly.

Seeking legal guidance

Even if their mistakes are honest or their nonpayment out of their hands, receiving notice from the IRS can be stressful and confusing for people in Georgia. Therefore, those who have experienced such situations may benefit from consulting with an attorney. A lawyer may explain their rights and options, as well as guide them through the IRS collection process, which may include aiding them in negotiating payment plans or settlement arrangements.