The IRS sends a series of letters before they take actual collection action on you. Here we will go through the basic letters and if you are receiving any of these letters, you will get an idea of where you are along the path of the IRS trying to levy your bank account or garnish your wages. If you hire someone to work on your case, they should contact the IRS and let them know they are going to submit a proposal, which will halt further collection action. Some tax relief firms just send out settlements without any prior contact. This can result in the unfortunate situation where a levy is issued and the IRS Offer In Compromise department chooses not to release it. Then, for however long as your settlement is pending, you also are getting garnished by the IRS. At TRP we call the IRS right away when we are hired, so we can avoid all collection action on your case. Its important to note that if you have moved since you last filed a tax return, the IRS might not have your correct address and you may not receive any letters at all before a tax levy or garnishment is issued against you.
So here are the different IRS letters and what they mean:
This letter is the first in the series of collections letters. It literally just states “Amount Due” and a dollar amount. These letters are usually based on the year of the debt, although sometimes letters will be issued that contain multiple years. So if you get one of these, it most likely does not include all the debts you owe, and is referencing one particular year. Your case still usually has a few months until its in the IRS collections area.
Notice of Intent to Levy: Intent to seize your property or rights to property
Once you receive this letter, you are getting closer to IRS collections, but not there yet. If your case has reached this stage, its best to try to resolve it now or hire someone to get started.
Call Immediately to Prevent Property Loss Final Notice of Intent to Levy
30-60 days after this letter is issued, most likely a levy will be submitted. The IRS claims they will issue it after 30 days if you do not respond, but often it takes up to 60 days. Many times the levies go to old employers or banks and you do not always get hit. Then later on the IRS system issues another levy when new data is received and then they finally get to you at your job or levy your bank. Once you receive one of these letters, either hire someone right away to help you, or contact the IRS before the 30 days from the date of the letter is up.
Garnishment and Levy Letters
Once the Final Notice of Intent to Levy time frame is up, the IRS may issue a levy or garnishment. They may try to come after your bank account, your wages, accounts receivable, merchant processing accounts, or other sources of income they can locate electronically through their system. The case may also eventually be assigned to an IRS revenue officer, but this usually is only in high amount due cases.
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