Certified Public Accountants (CPAs) undergo training in skillful negotiation with the IRS. They provide informed guidance on the various choices at your disposal and engage in dialogue with the federal government on your behalf, aiming to avoid the imposition of current levies and liens, while facilitating the release of existing ones. Having a proficient tax accountant increases your capacity to retain ownership of your hard-earned assets and property.
What is the Difference Between an IRS Levy & Lien?
While they are commonly confused, levies and liens are two different things. According to the IRS, “a levy is a legal seizure of your property to satisfy a tax debt… A lien is a legal claim against your property to secure payment of your tax debt, while a levy actually takes the property to satisfy the tax debt.
What Happens Next?
Quite a few things happen next. Let’s break it down.
- You will receive Notice CP14: this is your first official contact from the IRS regarding unpaid taxes for a specific year. This will be sent via mail and serves as your first notification of your outstanding tax liabilities, including details such as associated interest and/or penalties.
- You will receive Notice CP503, which serves as your first reminder and second contact from the IRS. This is also sent via mail and reiterates the existence of unpaid taxes and growing penalties.
- You will receive Notice CP504, your second reminder and final notice before a letter of intent to levy is issued.
- You will receive Notice CP504, which signals the IRS’s intent to levy. Basically, the IRS now has the authority to claim your state tax refund and apply it towards your outstanding balance. If this doesn’t cover your balance, subsequent action will be taken.
- The Notice of Intent to Levy and Notice of Your Right to a Hearing is the fifth and final notice in this sequence. Things change at this point, as after 30 days from the letter’s date, the IRS holds the legal right to seize your assets including property, cars, bank accounts, etc., to pay back the taxes owed. It serves as a final warning before potential asset seizure.
What Does this Mean for Me?
What this means, in short terms, is that after subsequent notices, the IRS will alert you that they soon will be able to seize your property to collect your unpaid taxes. Reaching out to a trained CPA in this step is critical, as we can immediately start negotiating on your behalf.
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