You're not the first person to have opened a letter from the Internal Revenue Service (IRS) and saw it was captioned, “Notice to Levy,” and then wondered what would happen if you just tossed it in the trash. And it's understandable if you're frightened because you can't pay the amount due. However, do not throw it out, and do not ignore it. Instead, you want to respond as soon as possible. Here's why:

RESPONDING TO THE NOTICE OF LEVY MEANS YOU STILL HAVE OPTIONS

A lot of people ignore a “Notice to Levy” because they can't pay the bill. But your choice is not “Pay the bill or do nothing at all.”

Instead, if you do respond, you have other options. You may be able to work out a payment plan or negotiate to pay a lower amount. You can also ask for a hearing to explain why you shouldn't have to pay the claimed taxes at all. Even if you can't convince them to reduce or eliminate the bill, the IRS may waive some penalties for late payment. And the sooner you reply, the more time you have to do all of those things: You can negotiate with the IRS while preparing a defense.

On the other hand, if you don't respond—and opt to ignore the notice—you lose the ability to work out the payment plan or negotiate the amount. You also lose your ability to have that hearing to challenge the tax bill.

So not replying does narrow your options to only “Pay the bill.” Worse yet, you will likely end up paying more than if you'd replied earlier—because you'll have to pay the entire principal and all of the penalties.

AN EXPERIENCED TAX ATTORNEY CAN HELP

While the temptation to ignore a notice from the IRS is understandable, ultimately, you're much better off if you respond. But first, get qualified tax counsel to assess your potential liability and then represent you before the IRS. If you need help, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.