Each year you are required to file your income tax statement with the Internal Revenue Service (IRS). Once you do so, you are notified as to whether you owe any tax payments to the IRS, or whether you are owed a refund. If you owe taxes, you are required to pay them by the deadline given in the notice. Failure to either file your taxes, or pay the taxes you owed can result in penalties.

After you have filed your taxes, the IRS will first send a notice stating any amount you still owe to them. The statement should include a deadline for paying the taxes. If you continue to avoid paying your taxes, you will receive multiple notices from the IRS regarding the money you owe.

Finally, the IRS will send a letter referred to as a “Final Notice of Intent to Levy.” This may also be known as an IRS Letter 1058 (the IRS has a system of classification for the many forms it uses). They may also notify your employer of the intent to levy.

What is a Levy for Unpaid Taxes?

The IRS is authorized by the Internal Revenue Code (IRC), the law which governs taxation, to confiscate your property if you are delinquent in paying your taxes. This can be almost any property you own, including your home, your car, and your bank accounts.

The IRS can also garnish your wages, take your state tax refund, and take the cash value of any insurance policies you own. Although the IRS must provide the proper notification described above, if, after doing so, you fail to pay your taxes, they can take almost any property you own to satisfy the debt.

What Should You Do if You Receive a Final Notice of Intent to Levy?

Once you receive the Final Notice from the IRS, you have only 30 days to either pay your debt or makes arrangements to do so. Failure to do so will, as described above, result in the IRS taking your property in order to pay off your taxes.

However, there are several ways to deal with this problem and have the levy released by the IRS. Some of the reasons the IRS must release the levy include:

  • You pay your debt in full;
  • You agree to a payment plan;
  • You prove that you are under an economic hardship (paying your taxes would keep you from having basic funds to live on); and 
    • This usually requires financial documentation.
  • The IRS accept an offer in compromise.

A release of the levy does not mean you no longer owe taxes. It simply means the IRS will stop trying to take your property to repay the taxes. Generally, you must agree to pay it off in the future. If you fail to make arrangements with the IRS to work toward paying off your debt, the IRS can create another levy on your property.

Setting Up a Payment Plan for Your IRS Intent to Levy

Payment plans are simply that: a plan that details how you will pay the IRS what you owe. You will need to contact the IRS and apply to be put on a payment plan. You will need to submit some personal information.

The IRS will then determine whether you qualify. If you do, you can start making monthly payments (which may be fairly low), and the IRS will release its levy on your property.

Offer in Compromise for Your IRS Intent to Levy

An offer in compromise is where the IRS agrees to take an amount in taxes that is less than what your owe in order to settle the debt. You may either pay the amount in a lump sum, or you may make periodic payments.

This option also requires that you apply for it and show why you need it. You will need to show the IRS evidence of your financial situation which prevents you from paying your entire tax debt.

How to Get Back Property that the IRS Has Already Taken

If your property has already been seized, you must first contact the IRS and go over your options for paying your taxes and having the levy released. If you able to show economic hardship or agree to a payment plan, or some other option, the IRS may release your property. They may deny your request to return your property, which you can appeal. Even if the IRS releases the seizure your property, you will still owe your taxes.

If the IRS has seized your property or money without proper notification, there is a possibility of having it returned. You should contact the IRS and inform them that you never received a "Final Notice of Intent to Levy," and discuss option for resolving the taxes you owe to them.

Contacting a Tax Lawyer for a Notice of IRS Intent to Levy

A local tax lawyer can help you understand your options, negotiate an affordable payment plan or even help you settle with the IRS. Essentially, a tax lawyer may resolve your tax dispute with the IRS in a way that is manageable for you.