INDIANA – If you failed to pay your 2024 taxes by the April 15 deadline, it can result in IRS penalties, interest, and potential levies on your assets. The IRS can seize funds from bank accounts, wages, rental income, pensions, Social Security, and even life insurance. Tangible assets, such as cars and real estate, are also at risk.
By law, the IRS must provide notification of the debt, a formal levy notice, and an opportunity for a hearing before seizing assets. For bank account levies, a “Final Notice of Intent to Levy” (Letter 1058) is typically issued beforehand, which can potentially freeze funds and incur bank fees. Wage garnishment involves a portion of each paycheck being sent to the IRS.
While some salary is exempt from levy based on deductions and dependents, taxpayers facing hardship can appeal. Property seizure, including homes and vehicles, can occur, with the IRS auctioning these items to cover the debt. Owners may be able to redeem their property before or after auction, potentially incurring additional costs.
The IRS can also levy funds in third-party accounts where the debtor is a beneficiary. Businesses must surrender property held for individuals facing levies. Certain benefits, like lump-sum death benefits and SSI, are exempt.
The levy process involves an initial payment request followed by a final warning and the right to challenge. For help with tax debt levies, contact the IRS at 1-800-829-7560 or visit www.irs.gov/payments/get-help-with-tax-debt. For non-tax debt levies, contact the U.S. Department of the Treasury at 1-800-304-3107 or visit www.fiscal.treasury.gov/top/contact.html.
