Meant to get your attention, an IRS levy is an aggressive action by the IRS. It is a legal seizure of your property to satisfy a tax debt. The IRS can levy your bank account, your wages and virtually any third party account or personal assets. Wage levies and bank levies are the most common type of levy that the IRS will issue.
Typically three requirements must be met before the IRS can levy:
1. The IRS sends the tax liability due and sends the tax payer a Notice and Demand for Payment
2. The tax payer neglects or refuses to pay the tax and
3. A Final Notice of Intent to Levy and Notice of Your Right to A Hearing is sent to the taxpayer at least 30 days before the IRS levies. It may be given to the individual in person or left at his or her home, but usually it is sent to the last known address the IRS has on file.
An IRS levy continues until the tax liability is paid in full, the time to collect has expired or until the levy has been released.
The three quickest ways to stop IRS levy actions are:
1. Pay the liability in full. The IRS will remove the levy immediately once the balance is paid.
2. A Streamline Installment Agreement. A streamline Installment Agreement can be set up if the balance of the tax liability is under $25,000. This can be arranged with minimal financial disclosure. It is set up over a sixty month time period. A streamline can be set up for less than the minimal required for 60 months but financial information must be given and it will require IRS manger approval.
3. File Bankruptcy. The filing of a bankruptcy will automatically put a â€œstay of collectionâ€ on your account. There is no need for any type of disclosure. It is automatic by bankruptcy law. However, many taxpayers that owe taxes and cannot pay them in full, or the balance is above $25,000. Bankruptcy will not cover all types of taxes and for those that can be filed, there are very strict guidelines. Getting advice from a bankruptcy attorney before considering bankruptcy as an option is recommended.
Other options exist if the tax payer doesn’t qualify for any of the following.
If my client does not qualify for any of the above, then I can stop irs levy procedures by setting up an Installment Agreement that requires financial disclosure and manger approval or I can put the case in a hardship or currently non-collectible which will also require manger approval and financial disclosure.
The interest will keep accruing on the tax liability with both an Installment Agreement & Currently Non-Collectible status. That is why I will also look to see if my client would qualify for an Offer in Compromise or other tax relief that will resolve the balance.
Anytime financial disclosure is required, I recommend the tax payer have professional tax help, with knowledge and experience of the tax code.
You can find more help at http://irs-taxdebthelp.com