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Tax Debt Help Needed – How Can I Stop an Irs Bank Levy?

 

The IRS does give you ample warning that they intend to levy your bank account. You undoubtedly received the notice and demand for payment from the IRS which included the amount you owed in back taxes. You probably did not contact the IRS at that time, and that was very important. The next communication you received was called the “Final Notice” which did express their Intent to Levy and also included a notice of your right to a hearing after the levy has been placed. That final notice arrives 30 days before the IRS actually talks with your bank and proceeds with freezing your accounts. It comes in the form of a certified letter directly from the IRS. If you are now facing the impending crisis of the IRS bank levy, then you have obviously procrastinated the handling of your IRS past due tax problem (probably because you did not have the money to pay the back taxes). All is not lost and it is still possible to stop the IRS levy. However, the time to act is right now. You need fast, professional tax debt help and you have just 21 days to get this handled, and the clock is counting down each day!

 

 

An IRS levy is clearly one of the most powerful collection tools in the IRS arsenal and the IRS bank levy can be incredibly frightening when the freeze is actually implemented. Once the IRS freezes your bank account, you have no access to your funds. They are waiting for the “21 days to expire” before they withdraw these funds to pay your delinquent tax debt bill. Any personal bills that you have that need to be paid in this timeframe will not get paid. In fact, you will probably be hit with insufficient funds fees and the refusal of any preset automated debits you have set up on your account to pay for goods/services. Even the newly deposited funds that come in as paycheck direct deposits will be frozen once they are received by your bank! The IRS intends to be paid the back tax money that you owe, one way or the other. Keep in mind that your bank is required by law to comply with the IRS bank levy and hold all funds that have been deposited into your bank accounts. They will not be able to provide you with any tax debt help in this matter.

 

 

During the 21 day period, it is now prudent to seek expert IRS tax debt help so that a tax attorney or tax specialist is able to negotiate with the IRS to release the funds. Unless an IRS bank levy release is obtained, once the 21 day period has expired, the bank sends the money to the IRS and you will never get it back. You may also consider contacting the Taxpayers Advocate in your area. This would require you to complete paperwork to prove economic hardship in hopes of having the IRS bank levy “lifted” or released. Time is of the essence and your financial future does hang in the balance.

 

 

Other Important Things You Need to Know About an IRS Levy:

· How does the IRS know where I bank? The IRS knows your banks accounts from the 1099’s that are filed every year with your tax returns. Even if your tax returns are unfiled, they have still received those 1099’s from the financial institutions themselves.

 

 

• What other accounts might be affected? Certificates of Deposit and any account where you have your name and social security number listed. Keep in mind that if you have joint accounts for whatever reason, with family members or even friends, those will be subject to the IRS bank levy also.

 

 

 

• What types of accounts are excluded from an IRS Levy? Life Insurance, Worker’s Compensation, Benefits received from the Department of Veteran’s Affairs, and Scholarships or Grants.

 

 

 

• Will the IRS levy both my bank account and my wages too? The IRS does not typically levy both your bank accounts and your wages. They intend to be paid for your delinquent taxes, but they must leave you just enough to live on, and while they “can” enforce an IRS levy on your wages and your bank accounts, they don’t tend to collect past due taxes in this manner.

 

 

About the Author

Liv Worthington has worked in the debt management field for many years. She also offers advice on IRS levy solutions for those taxpayers who need urgent tax debt help for serious IRS matters like an IRS bank levy and the freezing of bank accounts.

Solutions to Resolve an Irs Bank Account Levy

This is the IRS’s forced collection method where they will sell your possessions in order to fulfill your tax debts. An IRS tax levy is the most lethal of all IRS collection methods. With a levy, the IRS  can take your assets in order to cover for the back taxes that are outstanding. Getting an IRS levy released means you will need to come to an agreement with the IRS and they will agree to stop taking collection actions against you. Below are 10 ways you can legally release a tax levy with the IRS.

• Pay debt amount in full, including penalties and interest – Try to think of other ways you can pay if you don’t have the money. Some options you can consider are; take out a home equity loan, friends and family, have a yard sale, or see if you can sell some stuff on Ebay.
• Avoid the IRS until the Statute of Limitations Expires – The IRS has 10 years to collect taxes from the initial date of assessment the Internal Revenue Service has ten years to collect on taxes since the day they were originally assessed. Once the ten year period is up, the IRS no longer pursue you for collections and the levy will be lifted. Remember, if the IRS is hot on your case and they have not collected after 9 years, they most likely will try to get you to extend the statute of limitations. They may not tell you that this is what they are doing, but it is, so be careful what you sign if a lot of time has already passed. If you haven’t paid the amount owed in 9 years, it is extremely unlikely they will be able to collect from you in the last year. Especially since by this time you can be considered an expert in avoiding the IRS.
• Monthly payments through an installment agreement – This is one of the easiest settlement methods to release a tax levy. With an installment agreement you will be able to pay off your back taxes owed in incremental monthly installments. It is important to make timely payments on this once it is in place or the IRS can re-enforce the tax levy.
• Partial payment installment agreement – If you can’t make the minimum required payments for the installment agreement the IRS will consider you for a partial payment option. With this option you will be able to make smaller installment payments and may actually never end up paying off the entire amount of back taxes owed. The IRS will review your financial situation every so often to see if you can pay off the taxes owed or be put on a normal installment agreement.
• Settle back taxes with an offer in compromise – If you apply for this form of relief, the IRS will temporarily pause the collections until the IRS has decided about your case. Do not apply if you don’t think you will qualify, this will be considered fraud and will come with harsh punishments. This is a difficult type of relief to receive from the IRS, but if accepted, the levy will be released. The IRS only allows individuals to apply for this type of relief if they fall into one of three categories with strict requirements.
• Prove your assets have no equity – When items the IRS is trying to levy have no value in them, you must show to the IRS that there would be no point for them to levy them because they will gain nothing from it and it will not pay anything towards you back taxes owed.
• Prove to the IRS that the Levy doesn’t allow you to meet basic minimum required expenses – If you can show and prove to the IRS that the levy creates economic hardship and it greatly affects your ability from earning enough to maintain a roof over your head or your families head, it is likely the IRS will lift the levy. If the levy hurts your future ability to earn money and you prove this to the IRS, the levy will be removed.
• Post a Bond – If you post a bond, a levy will no longer be in effect. If a levy is in place, and you cannot pay your taxes, it is highly unlikely you will qualify for a bond. If you do qualify for a bond, you may be better of paying the tax amount owed in full.
• Appeal the Levy –You have the right to appeal the levy and have it lifted if wrong procedures were taken. Don’t use this tactic to stall.

Getting a levy lifted can be complex. It is suggested that you use a tax professional to help you with required filings. Some of these methods above can be unsafe to do on your own because they can be considered fraud by trying to delay IRS collections if not done properly or in the right circumstances. An IRS levy can be financially devastating, the help of a tax relief professional can most likely save you much more money than their cost, while eliminating a lot of stress.

 

About the Author

More information on Protecting assets from IRS.

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