South Carolina Tax Law Firm PA

IRS Collections Lawyer in South Carolina: Levies, Liens, and Garnishments

IRS collections can move from a balance-due notice to a bank levy, a wage garnishment, or a federal tax lien in a matter of months. South Carolina Tax Law Firm PA represents individuals and businesses across South Carolina in IRS collection matters. We work to stop or release levies, address tax liens, and resolve the balance through the option that fits your finances, such as an installment agreement, an offer in compromise, or currently not collectible status.

Call (803) 753-7376 or request a consultation. Have your most recent IRS notice in front of you, including the notice number in the top or bottom right corner and the date it was issued.

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How IRS collection works

Collection starts once the IRS assesses a tax you have not paid, whether from a return you filed without full payment, an audit, or an automated adjustment. The IRS then sends a series of notices that become more serious over time. If the balance stays unpaid, the IRS can file a public notice of federal tax lien and levy wages, bank accounts, and other property. Larger or more complex accounts may be assigned to a Revenue Officer, an IRS collection employee who works the case in person.

The IRS generally has 10 years from the date of assessment to collect a tax (IRC 6502). That period can be extended, for example while an offer in compromise or a Collection Due Process hearing is pending, or during bankruptcy. Knowing your collection statute expiration date is often the starting point for choosing a strategy.

IRS collection notices, in order

  • CP14, balance due. The first bill after the tax is assessed.
  • Reminder notices (such as CP501 and CP503). Follow-up bills. Penalties and interest keep growing.
  • CP504, notice of intent to levy. Warns that the IRS may levy, including your South Carolina state tax refund, and may file a federal tax lien.
  • Letter 1058 or LT11, final notice of intent to levy. The most important notice in the series. It gives you 30 days to request a Collection Due Process hearing before the IRS can levy most property (IRC 6330).
  • Letter 3172, notice of federal tax lien filing. Tells you a lien notice has been filed and gives you the right to a Collection Due Process hearing by the date in the letter (IRC 6320).

If you are not sure which notice you have, the notice number is printed on it. The IRS explains each notice on its Understanding your IRS notice or letter page.

IRS levies: bank accounts, wages, and other property

A levy is the legal seizure of property to pay a tax debt. The IRS generally must send a final notice of intent to levy and give you 30 days to request a hearing first. The most common types are:

  • Bank levy. Takes the money in your account on the day the levy is received. The bank must hold the funds for 21 days before sending them to the IRS, which is a short window to get the levy released (IRC 6332(c)).
  • Wage levy (garnishment). Continues with each paycheck until the debt is paid, the levy is released, or the collection period ends. Only a limited amount, based on your filing status and dependents, is exempt (IRC 6334(d)).
  • Federal payment levy. Takes up to 15 percent of Social Security benefits and other federal payments, and more for federal contractor payments.
  • State refund levy. Takes your South Carolina income tax refund.
  • Accounts receivable and business assets. For businesses, the IRS can levy payments owed to you by customers and, less often, seize vehicles, equipment, or real estate.

The IRS must release a levy in certain situations, including when the levy is creating an economic hardship, when you enter into an installment agreement that allows release, or when the collection period has expired (IRC 6343). Acting quickly matters, especially with a bank levy.

Federal tax liens

A federal tax lien arises automatically when the IRS assesses a tax, sends a bill, and the tax goes unpaid (IRC 6321). It attaches to everything you own, including property you acquire later. To put other creditors on notice, the IRS files a Notice of Federal Tax Lien in the public records of the county where you live or where your property is located. A filed lien can make it harder to sell or refinance property and to get credit.

There are several ways to address a lien:

  • Release. The IRS must release a lien within 30 days after the tax is paid in full or becomes legally unenforceable.
  • Withdrawal. Removes the public notice as if it had never been filed, in certain situations, such as some direct debit installment agreements (Form 12277).
  • Discharge. Removes the lien from a specific property, often so it can be sold (Form 14135).
  • Subordination. Lets another creditor move ahead of the IRS, which can make a refinance or loan possible (Form 14134).

Options to resolve an IRS balance

  • Short-term payment plan. Up to 180 days to pay in full.
  • Installment agreement. Monthly payments. Individuals who owe up to $50,000 in combined tax, penalties, and interest can often get a streamlined agreement without detailed financial disclosure. Larger balances usually require a collection information statement (Form 433-A or 433-F, and Form 433-B for businesses).
  • Partial payment installment agreement. Monthly payments based on what you can afford, with the remaining balance left unpaid when the collection period ends.
  • Currently not collectible status. The IRS temporarily stops active collection when paying would leave you unable to meet basic living expenses. Interest still accrues, and the lien may remain.
  • Offer in compromise. Settles the debt for less than the full amount when the IRS agrees it cannot reasonably collect the full balance, or in limited other situations. The IRS looks closely at your income, expenses, and assets.
  • Penalty abatement. Reduces the balance by removing failure-to-file and failure-to-pay penalties for reasonable cause or under first-time abatement.
  • Disputing the tax itself. In some cases, through audit reconsideration, a refund claim, innocent spouse relief, or a Collection Due Process hearing if you had no earlier chance to dispute it.

Most options require that all required tax returns be filed and that current-year taxes, such as estimated payments or payroll deposits, be paid on time. Bringing filings current is often the first step.

How we handle an IRS collection case, step by step

  1. Protect your rights. We identify the notice and any hearing deadline, and request a Collection Due Process hearing or Collection Appeals Program review when it helps.
  2. File a power of attorney. With IRS Form 2848 on file, the IRS and any Revenue Officer contact us instead of you.
  3. Get the full picture. We pull your IRS account transcripts to confirm the balance, penalties, payments, unfiled years, and collection statute expiration dates.
  4. Address any active levy. If a levy is in place, we contact the IRS to seek a release based on hardship or a resolution.
  5. Bring filings current. We help get missing returns filed so you are eligible for collection alternatives.
  6. Prepare the financial statement. We prepare the collection information statement using the IRS’s allowable expense standards, so the numbers support the resolution you request.
  7. Negotiate the resolution. We propose and negotiate the installment agreement, offer, currently not collectible status, or other option, and appeal if the IRS rejects a reasonable proposal.
  8. Address South Carolina. If you also owe the South Carolina Department of Revenue, we plan both resolutions together.

IRS collections and your South Carolina taxes

The South Carolina Department of Revenue collects state tax separately from the IRS, with its own liens, bank levies, and wage garnishment, and an IRS payment plan does not cover state taxes. The IRS can also take your South Carolina refund to pay a federal balance. Many taxpayers who owe the IRS also owe the state, so the firm handles both, and SCDOR assessments can be challenged through the state’s own appeal process.

Attorney experience

The firm is led by attorney Daniel P. Knudsen, who has represented taxpayers in tax controversies for more than 10 years, including litigation before the U.S. Tax Court. Before entering private practice, Daniel represented taxpayers before the IRS at a Low Income Taxpayer Clinic funded through the IRS Taxpayer Advocate Service grant program, and worked in the Executive Division of a state department of revenue.

Daniel holds an LL.M. in Taxation and certificates in International Taxation and State and Local Taxation from Georgetown University Law Center, and completed the Tax Litigation Training Program, a professional certificate program, at Villanova University Charles Widger School of Law. Every collection case is handled by an attorney from the first notice through final resolution.

IRS collection help throughout South Carolina

Our office is in Spartanburg, and we represent IRS collection clients throughout South Carolina, including Greenville, Columbia, Charleston, North Charleston, Mount Pleasant, and Rock Hill. Most collection work happens by phone, fax, mail, and secure online systems, and meetings with a Revenue Officer can be arranged near you, so you do not need to live near Spartanburg.

IRS collections questions

Can the IRS take money from my bank account without warning?

Generally no. Before most levies, the IRS must send a final notice of intent to levy and give you 30 days to request a hearing. Many people miss or ignore that notice, so a levy can feel sudden. Once the bank receives a levy, it holds the funds for 21 days before sending them to the IRS.

Can the IRS take my house?

It is possible but uncommon. Seizing a principal residence requires approval from a federal district court judge and is generally used only after other options have been exhausted. A federal tax lien on your home is far more common and can affect a sale or refinance.

Will an installment agreement stop a levy?

Generally yes. The IRS usually cannot levy while an installment agreement request is pending or while an agreement is in effect, and it may release an existing levy when the agreement is approved. Missed payments or new unpaid balances can put the agreement in default.

Does the IRS forgive tax debt after 10 years?

The IRS generally cannot collect after the 10-year collection period ends, and the remaining balance is written off. But the period can be extended by events such as an offer in compromise, a Collection Due Process hearing, or bankruptcy, and each tax year has its own date. Your account transcripts show the dates that apply to you.

Is a call from a private debt collector about my IRS debt legitimate?

It can be. The IRS assigns some older accounts to private collection agencies and sends you a letter first saying so. Those agencies cannot levy, cannot ask for payment by gift card or wire, and must direct payments to the IRS. Many calls claiming to be from the IRS are scams, so verify before paying anything.

Should I handle IRS collections myself?

Many people set up a simple payment plan online without help. When a levy is in place, a Revenue Officer is involved, the balance is large, returns are unfiled, or you are considering an offer in compromise, an attorney can protect your hearing rights, prepare the financial statement, and negotiate the resolution.

Related tax controversy services

Talk to a South Carolina IRS collections lawyer

If you received a final notice of intent to levy, a lien notice, or a levy on your wages or bank account, call (803) 753-7376 or request a consultation as soon as possible. Tell us the notice number, the tax years involved, and the date on the notice. Please don’t include confidential details in the contact form. Submitting it does not create an attorney-client relationship.

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South Carolina Tax Law Firm PA is a private law firm and is not affiliated with the IRS, the South Carolina Department of Revenue, or any government agency. Attorney responsible for this content: Daniel P. Knudsen, 405 S. Pine St., Suite F, Spartanburg, SC 29302. This page provides general information, not legal advice. Every case depends on its own facts, and no particular outcome can be promised.

Reviewed by Daniel P. Knudsen, attorney, October 2026.

405 S. Pine St., Suite F, Spartanburg, SC 29302

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