Knowing that you owe money to the IRS can add a serious amount of stress to your life. If you’ve made a payment for the balance due or worked out a payment arrangement with the IRS, it may lessen the stress a bit, but it continues to occupy your thoughts until you’ve paid it off. In general, if you pay your tax bill timely or work out an arrangement with the IRS, they will leave you alone. But what happens if you know you have a tax bill and you haven’t taken steps to remedy your situation? That’s where the stress level can really ramp up, and the IRS will resort to taking more extreme measures. Put off paying your tax bill long enough, and the IRS will eventually want to levy your property and/or wages.
So, what should you do if you receive a Notice of Intent to Seize (Levy), which is a CP504 notice? First and foremost, do not hide it in a drawer and hope it goes away. This notice indicates the IRS means business. If you are not willing to give your money to them, they will start looking for ways to take what they need to meet your tax obligation.
Second, look at the top right corner of the first page and note the date of the notice. You have 30 days from this date to do one of four things. You can:
- Pay the amount due in full.
- Make an installment agreement with the IRS and begin making payments.
- Call the IRS to dispute the amount you owe and review the details of your account.
- Reach out to the dedicated professionals in the Tax Debt Relief program at TaxAudit.
If you choose to reach out to the IRS directly, they provide a phone number to call on the notice itself. However, with long wait times and limited staffing, you may feel like your 30 days will run out before you actually get to speak to someone. The professionals at TaxAudit are skilled at handling communications on your behalf though. So, this may be your best bet.
If you choose to do nothing, the IRS will assume you agree with the amount due and proceed with a levy on any federal or state tax refunds. They may also pursue your wages or other sources of income, remove money from your bank accounts, and even seize personal assets such as your vehicle or home and your social security benefits. If your balance due is excessively high and remains unpaid long enough, the IRS can even revoke your passport or block the processing of a new passport.
The IRS will then issue a Notice of Lien Filing as a follow-up to notify you officially that your property and rights to property are about to have a lien filed against them. This notice generally arrives via Certified Mail at the most recent address the IRS has on file. The lien becomes part of the public record and may affect your credit score, as well as attach itself to any future property you acquire. It is nearly impossible to get an IRS levy against your property removed, short of paying the debt in full. But again, things do not have to go this far.
Communicating with the IRS to work out a payment plan, put a hold on your account, or even negotiate a lesser amount due in some cases may help delay or even avoid the IRS levying your wages and property in the first place. For most people in this situation, it may be the desire to avoid interacting with the IRS that has led to this point. The team at Tax Audit's Tax Debt Relief department can pick up the mantle and communicate on your behalf. They can review your tax records to determine all options available to you. They will explain your options clearly and proceed in the manner most effective for your situation. However, it is very important that you reach out for help as soon as possible if you receive a bill or notice of intent to levy from the IRS. Don’t let fear, frustration, or defiance lead you to inaction. This will only result in things getting worse. Finding professional support in this situation is highly recommended, so you do not have to navigate the complex IRS collections landscape alone.