Internal Revenue Service Issues: Tax Levies vs. Tax Liens Part One

 Posted on August 13, 2014 in Bankruptcy

It is not uncommon for a person to find themselves behind on their income taxes, and many across Texas and the rest of the country suffer from this same problem. Everyone has seen the proverbial person walking through the door of his or her accountant's office with years worth of paperwork in hand. However, this only generally occurs when they receive notices from the Internal Revenue Service or simply have all of their money frozen.

In many cases, filing for bankruptcy can assist you in your financial predicament with the government. First, you should consult a Texas bankruptcy attorney to assess what is really going on and to find the best way to remedy the problem. In this way, it is critical to understand the key differences between a tax levy and a tax lien.

Consider the following deviations between a tax levy and a lien, and why one is more critical than the other to your short and long term financial health:

• The IRS is not seizing your property when a lien is imposed: A tax lien only secures the governments interest in your property should your debt become a liability. This does not mean it is not a big deal, however; all levies are reported to all creditors, and becomes public on your credit scores, making it much more difficult to obtain a loan;

• Tax liens can turn serious very quickly: While your property is not seized during a lien, a levy works completely differently. In this case, the government is, in fact, taking your property to settle a passed debt--often the result of a grossly overdue lien.

• Almost nothing is safe during a levy: If you are subject to a tax levy by the IRS, they can seize almost any asset you own to repay the debt. This includes your home, car, wages, and even bank and retirement accounts. This extends to accounts that are in someone else’s name as well; including things such as life insurance and joint accounts.

If you have received a notice from the Internal Revenue Service regarding unpaid income taxes of your own, it is imperative that you act as soon as possible. A professional and experienced Texas bankruptcy attorney can assist you by presenting you with all the information, and advising you how to move from there.

Contact The Law Offices of Chance M. McGhee today for a free consultation and personal legal assistance from a San Antonio bankruptcy attorney on how to move forward in your IRS tax situation for the best possible outcome.