Tax Litigation Law Office of Scott Kauffman
(949) 474-1820

Hackney Literary Award
Mighty River Short Story Contest Winner

Bank Levies Archives

Tax liens, tax levies and taxpayers' options

The pop-culture press loves to report on the foibles of celebrities - including their problems with tax debt. Among those struggling with it recently are apparently the actor Nicholas Cage and former football hero O.J. Simpson. They are not alone, of course. Many people have tax debt.

How can I get relief from failure to pay and file tax penalties?

Taxpayers in Southern California can face substantial penalties when they do not meet deadlines imposed by the Internal Revenue Service. There is a penalty for failing to file a tax return in a timely manner, and there is a penalty for failing to pay the tax owed on time. The longer a taxpayer waits beyond the due date to file a return or pay tax, the more these penalties grow. If not dealt with, they can reach 25 percent of the unpaid taxes.

How a construction company appealed an IRS tax lien

In our last post we discussed the basics of IRS liens, wage levies and bank levies. We also began to discuss a recent Tax Court case involving a construction company and the IRS. The company got behind on its taxes so the IRS imposed a lien and refused to subrogate it to a bank's claims arising out of a line of credit. Without the line of credit the construction company could not stay current on its tax obligation and risked closure, so the company took the IRS to court. The Tax Court sided with the construction company and held that the IRS abused its discretion in failing to subrogate its lien to the bank's claims.

An overview of tax liens and bank levies for delinquent taxes

It is not uncommon for an Orange County resident to be subjected to a tax lien or levy for unpaid taxes. A lien is type of security interest in property imposed due to a debt. A tax lien is often in the form of a wage or bank levy. A wage levy is essentially like having your wages garnished. When the IRS imposes a bank levy, it places a freeze on a taxpayer's bank account and reserves the right to use the bank account funds to pay a tax debt. Additionally the IRS may seize property or other assets that are equal in value to a tax debt.