Perhaps few debts create more anxiety than a debt to the Internal Revenue Service. Owing taxes to the government can be especially troublesome since the government has more authority and fewer restrictions when it comes to collecting a debt. While your other creditors may have to go to court to obtain permission to garnish your wages or initiate other collection activity, the IRS does not. They must simply assess the tax and notify you of their intentions to collect the debt.
For this reason, it is crucial that you take action as soon as you recognize that you are unable to pay what the IRS says you owe. Fortunately, there are numerous options available for getting you through this difficult time even if you are already under threat of a levy.
What assets can the IRS levy?
When the IRS or another taxing authority puts a levy on your property, it means they have effectively taken it. This is different from a lien, which holds the property as security for an unpaid debt. With a levy, the government has already seized it. Agents may then sell the property to satisfy the debt. However, this will not happen suddenly. You will receive a final notice from the IRS about 30 days before the levy occurs. The IRS may levy any of the following assets:
- Your Georgia home or other real estate
- Your vehicle and any recreational vehicles you own, such as a boat
- Your bank account
- Income from rental properties you own
- Dividends from investments
- Your retirement account
- The cash value of your life insurance policy
The IRS may also levy your wages, commissions and bonuses. Just as with a wage garnishment another creditor may seek, your employer will have to deduct a prescribed amount from your paycheck and send it to the IRS to apply to your debt. If you are already struggling to keep up with your bills and debts, this action may create even more pressure.
What can I do?
If you owe the IRS money, the worst thing you can do is to ignore any mail you get from the agency. The clock continues to tick down to the deadline, and denying the problem will not make it go away.
By acting quickly, you may be able to resolve the debt through one of several options, such as seeking a payment plan, applying for a temporary suspension or requesting to pay a reduced amount to settle the debt. There may be additional options that best suit your circumstances and ability to repay what the government says you owe.