What Is the Real Cost of an IRS Tax Levy?
No matter which line you get into at the grocery store, there is always that one customer who has returns, coupons, and not quite enough money for all they bought, so they have to take some things out of the cart. Today is that kind of day. Finally it's your turn, and you have a cart full.
You swipe your debit card and put in the pin, but something is wrong. It won't work. You try again, but nothing. You would use a credit card, but you know those are all maxed out. Red faced, you slink out of the store and head to the ATM. You put in your card and check your balance. $00.00. How can that be? You just put your payroll check in yesterday. Why didn't it clear?
You go into the bank and talk to the teller. "I'm sorry Mrs. Smith, there is an IRS tax levy against your account. When that happens we are required to put a hold on all funds up to the amount of the levy. The entire $2800 balance in your account was not even enough to satisfy the levy."
Your heart flutters and sinks. Your mouth goes dry. "What about the outstanding checks," you ask?
"Two checks were presented today. One for $950 and another for $325. Both of those were returned," she tells you.
Your mortgage and cell phone bill!! You recognize those two right away. Other checks will be presented tonight for your water bill and a credit card payment.
Exasperated, you ask the teller if there is anything that can be done to get rid of that levy. The teller says that she has no idea. Her supervisor tells you that there is nothing the bank can do. She suggests you call the IRS.
How much will this levy cost you? At least 4 bounced checks, unless you can find someone to help you cover the two hitting tonight. At $35 each, that is $140. Then the mortgage lender will have a returned check fee, and if you don't pay within 15 days of the due date, a 10% late charge. The water company will likely charge $10 for the returned check, and the credit card company could increase your interest rate.
In addition, the mortgage company might require certified funds or cash on your next payment.
You call the IRS when you get home. The man sounds really nice, almost grandfatherly, as he explains that you've had several notices that you haven't responded to. He says he can reverse the levy if you can full pay the $23,000 outstanding. He helpfully suggests you set up a payment plan. He sounds so nice. But his job is to collect every possible dime from you possible.
You are shaking by this time, but somehow manage to kindly end the conversation. Then you lose it.
Dealing with the IRS after a levy or wage garnishment is not easy. Once they have that kind of leverage, they like to keep it. However, a phone call to Jim Demetriou, EA or Mike Montano, EA may result in a reversal of a levy. Call 888-987-1040. We know all the right buttons to push with the IRS. In the few cases where we are not able to reverse the levy, we can at least stop further collection efforts by the IRS for a month, even a year, while you get your financial house in order.
Call Demetriou, Montano, and Associates right now if you have a tax problem. We can help.
Demetriou, Montano & Associates - Tax Resolution Specialists
12301 Wilshire Blvd. Suite 318
West Los Angeles, CA 90025