Running a business is a full-time commitment. So what do you do when your business is threatened by a state tax levy? Do you have time to resolve this issue on your own? What are your options? The first step is to become informed about the situation. Let’s talk about what a state tax levy is and what you can do to take care of it.
WHAT IS A STATE LEVY?
A state tax levy is a collection action in which Taxing Authorities essentially take your assets. This action is part of an arsenal of collection tools that the Taxing Authorities use when a business owes back taxes. If you’re facing or experiencing a tax levy, then you know you’re in a serious situation. It can be confusing and overwhelming to receive a notification of a levy or to know there’s even a possibility that you could be levied.
As always, it’s best to act quickly, but before doing so, it’s important to understand what these levies are and what to do about them.
WHAT IS THE PROCESS?
Tax levies come in many forms, and all states have different processes by which they’ll issue levies. At the most basic level, it’s important to know that the state can seize your business’s bank accounts, building, land, vehicles – you name it.
It can get as bad as having a police officer show up to lock the door to your business. These severe measures taken by the state Taxing Authorities are to collect property and money to pay back your tax debt. Bottom line, if your business owes back taxes, you run a high risk of being levied.
WHAT TO DO ABOUT A STATE TAX LEVY?
The best way to avoid being issued a levy or removing an existing levy is to get a better understanding of your rights as a taxpayer. The numerous processes can be confusing for a business that owes taxes.
However, there are some basic things to understand if you are facing a tax levy.
First, look for a copy of the levy from whoever received the notice – your bank, accounts receivable, etc. You should know who issued it and who you’re dealing with before developing a strategy to address the levy. Then know what your rights are at that point of the process. Can you appeal? If so, when does the appeal need to occur?
There are obviously a lot of moving parts and little time to waste when facing a state levy. To better understand your situation and your rights, read our free guide to releasing a state levy, which is one of the methods by which you can begin to resolve the issue.
If you feel that you’re ready to develop a custom strategy, speak with one of our licensed tax professionals today.
Dealing with this issue should be your top priority. Now is the time to resolve your tax problem and get back to doing what you do best – running your business.
Speak with a tax expert about your state tax levy situation and your options.