The Internal Revenue Service (IRS) has a particular process for managing tax debts in the U.S. This measure is called “Final Notice of Intent to Levy,” and is actually quite harsh: it informs the agency that it can go ahead and collect an unpaid tax debt.
Ignoring this notification can be worse than receiving it, it can end up in the freezing of your assets—money from bank accounts, a part of your salary, or even Social Security benefits.
The notice is sent at least 30 days before the start of the levy so it gives taxpayers a little time to react, and it’s the last warning before the IRS applies stronger collection strategies.
When the final notice arrives
The Final Notice of Intent to Levy is sent when notifications have been issued and taxes are not paid but the reminders are not being responded to. Instead of an instant asset seizure, it is a formal 30-day warning. During that time, the IRS states that it intends to take legal action to recover the tax debt, which “could include the seizure of property, bank accounts, wages, or even Social Security benefits.”
To collect what you owe, the agency can take your salary, freeze your bank accounts, and deduct a portion of your Social Security benefits.
The notice also serves as a crucial reminder of your rights, including having the option to ask for an IRS hearing. Before the asset seizure proceeds, you have the opportunity to present your case, make questions, or work out a resolution. The notice itself “does not mean the levy will be implemented immediately,” the article highlights, but if you do nothing, it’s a sign that the process is starting.
If you receive the notice: what to do next
The IRS make it very clear: pay attention to it. According to the agency, taking quick action now can help avoid more serious issues later:
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Contact the IRS immediately: Get in touch to set up a payment plan if you are not able to pay the entire amount. If you have proof of financial difficulties, the IRS may offer payment agreements and, in some cases, the chance to temporarily postpone payments.
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Make a partial payment: Paying something, even if its really not much, demonstrates that you’re making an effort to solve the problem, even if you are in no position to pay off your entire tax debt right now.
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Request an IRS hearing: You can ask for a hearing if you think the levy is incorrect or disagree with it. This give you the chance to explain your circumstances before any asset is taken away.
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Don’t wait: A levy is in effect until the tax debt is paid off or a new agreement is made. You have more options and control when you take action early.
What if you really cannot pay?
The IRS is aware that some taxpayers cannot afford to make their full tax payments, and they have a number of programs to help because of this. If your levy is putting you in a really bad financial problem, you can ask for a payment plan, apply for temporary relief, or have it stopped.
The levy will remain in action until the debt is cleared out. Finding a solution gets easier the earlier you communicate.
Consequences of doing nothing: Your finances may be affected seriously if you neglect the Final Notice of Intent to Levy:
- loss of funds or property as a consequence of asset seizures.
- decreased income as a result of the IRS taking up to 15% of your Social Security or wages.
- harm to your credit score, which will make future loan applications more difficult.
It’s always better to act fast because ignoring the notice won’t make it go away