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Levies and IRS Liens

Levies and IRS Liens

We Are Your Trusted California Lawyers for Levies and IRS Liens

We become your trusted advisors and provide personal approach to law.

IRS Liens don’t actually mean they take or “seize” your property; it just makes it very difficult if not impossible to refinance or sell the property. If you have an IRS lien and want to proceed with the sale of the real property or refinance have the IRS discharge the property from the lien. Sometimes the IRS will accept the equity on the sale (if there is any) in exchange for discharging the lien. The lien will also show up on your credit report which could affect other parts of your life.

An IRS levy is much more serious than a lien. With a levy, the IRS can actually seize your property and your bank account could be frozen up to the amount of the levy for 21 days. You can challenge the levy, but if you are not successful, the funds are automatically given to the IRS. If you are successful, the IRS will garnish wages.

The difference between a lien and a levy is the effect on the property you own. A lien is just a claim registered against property for not paying taxes. It does not deprive a taxpayer of their property or the right to transfer property. Levies, on the other hand, usually happen because of bad or lack of communication between the taxpayer and the IRS. A Levy means a seizure. It basically takes your property and transfers your ownership of the property to the government.

At Tenina Law, Inc., we have the knowledge and experience necessary to assist you with every individual tax situation. Dealing with liens and levies on properties owned can be a stressful experience for anyone. you need a tax lawyer who specializes in tax law and has experience in helping people get rid of their IRS problems.


Understanding Levies and IRS Liens

Many taxpayers often conflate a lien and levy. To prevent confusion and prevent future misunderstandings, taxpayers must have an understanding of these two legal terms to avoid miscommunications between them. A lien should never be confused with a levy as one protects government interest in your home when taxes go unpaid while the latter takes forceful control over property such as freezing bank accounts or garnishing wages whereas lien use protects liens from claims by their owner against the government while one acts like liens do liens serve to safeguard government interest when taxpayers fail to pay their taxes while the former use serve the latter method whereas levy takes control by forceful seizure of your assets whereas.


Tax Liens: Impact on Assets and Credit

The IRS can place a lien on all assets you own or acquire while the lien remains in place, including assets you purchase later. If your tax debt is significant, they may inform creditors about it as this could negatively impact both your credit score and ability to sell your property. Once paid in full, the lien will be removed within 30 days; though certain provisions exist that can help remove, withdraw, or subordinate tax liens it is important to note that removal may not always be possible.


Fresh Start Initiative: Withdrawal of Federal Tax Lien

The notice of federal tax lien can be removed, even if the tax amount is still outstanding. As part of its Fresh Start Initiative, in 2011 the IRS introduced two options for withdrawing tax liens as part of the Fresh Start Initiative. Most taxpayers can request withdrawal of their lien if they owe less than $25,000 and have entered an installment agreement that will pay off the debt within a specified timeframe; additionally, they must have made at least three consecutive payments without default and be in compliance with all tax filings and filings – thus helping your credit rating! By withdrawing a lien from your property and improving it with this move by the IRS they can also help improve it!


Tax Levies: Limiting the IRS’s Power

The IRS possesses extensive powers, including the authority to seize assets to satisfy tax debts. However, taxpayers have options and rights that can help limit the IRS’s power, despite the initial sense of overwhelm. When levies are imposed, banks are required to retain the funds for a minimum of 21 days. It is advisable to consult with a tax lawyer during this period. In cases of financial hardship, a bank may release funds to the taxpayer either in full or in part.


Collection Due Process Hearing

If you receive a Notice of Federal Tax Lien and there is a 30-day waiting period before the IRS levies any of your property (excluding future tax refunds), you have a right to a Collection Due Process (CDP) hearing. To protect this right, it is imperative that a request for a CDP hearing be filed in time; even though an equivalent hearing might still be possible even without a timely request; only timely filing ensures your property does not become forfeited before hearings take place. During the hearing, you will have the opportunity to propose alternatives to forced seizure, such as a payment plan or an offer of compromise.


Finding an Experienced Tax Attorney in Los Angeles

If you are worried about the extent of the IRS’s authority due to unpaid tax debts, there are steps you can take to potentially mitigate their power. Seeking assistance from a tax lawyer at Tenina Law can be instrumental in devising payment plans or exploring alternative solutions. To schedule a complimentary consultation, please call (213) 596-0265 or contact us online.

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