Wednesday, June 3, 2009

Can You Prevent Levies/Liens ?

Many of our clients are all consumed with having liens/levies filed. Once this happens, consider yourself in collections status. However to get here, one would have to be a perpetual late filer or have debt liability, causing them to react (to important notices)later than than they should have. It's always important to take care of the issue at hand versus waiting to the last minute which in turn will cause undo stress and increased penalties and interest that are extremely difficult to get abated. Keep in mind that there are several notices (about 11 to be exact) the Internal Revenue Service will send you before you get assigned to the collection department. Unfortunately, some taxpayers are naturally procrastinators which invariably continue to get themselves in deeper debt with the IRS, if not addressed as soon as the notice is received.


It's apparant that taxpayers don't take the IRS serious when these notices are sent. But after the following subsequent notices are sent, the IRS will not be so lenient with a taxpayer after trying to worn them time after time. For all tense and purposes, the IRS gives a delinquent taxpayer ample opportunity to get in compliance. These eleven notices could delay the collections process for years.


Here are the notices the IRS will send to a delinquent taxpayer before sending them to the collections department: CP-501CP-502CP-503CP-504L-1058. After you have been sent the CP-504, the IRS considers you in "collections". Immediate action to levy your bank account or wage will take place in about 40 days from the time you are sent the CP-504. If issued a bank levy, the financial institution has to place a hold on the available funds for 21 days before being levied. About 30 days from when the 504 is sent , the taxpayer will be issued an L1058. This is the final notice that confirms the levy implementation on ones bank or wage. If a taxpayer tries to call and rectify their tax debt, they will be unsuccessful due to the requirement of a Power Of Attorney. POA's are the only individuals with enough authority to have a Stay On Collection granted.

In terms of a lien filing, there is always an implied federal tax lien when you have tax liability. Most of the time this tax lien is not filed unless you owe over $25,000. If you owe less than this amount, you can get into an affordable payment plan based on the assessed balance. If you get into the installment agreement before the lien is applied then you are secured with no future levies,liens. However, if you let the issue persist then levies/liens will be issued and not liens are never lifted until the debt is paid in full.


It is imperative that you take care of your tax debt and file your returns on time. Once entering in the collection process, there is no turning back. The IRS will continue this daunting process with hopes the client pays their debt owed in full.There are reputable companies out there that can help with the filing of your taxes and your tax liability where you don't have to pay your debt in full. If you find yourself currently in the collection department, don't wait. Its better to be proactive instead of trying to catch up.

2 comments:

footbolito17 said...

ive learned something from it... i really had a hard time with my tax debts...

scott davidson said...

Thanks for sharing useful information. Indeed IRS Settlement was a big pain and it almost screwed my future, poor credit score and all worse that can happen. Still i was lucky to find few experts that helped in my irs debt settlement, irsmedic.com were experts and help me in IRS settlement quickly. I was helped, hope you will too.