Of all the creditors or companies you might owe money to, the Internal Revenue Service can be the least forgiving about debt. If you don't pay your taxes, the IRS will levy and take possession of your property, including cash accounts, wages, and real and personal property. The IRS will sell non-liquid assets to raise funds to satisfy the debt you owe.
Unless you don't open your mail or you moved without leaving a forwarding address, you probably won't be blindsided by an IRS levy. You'll receive a "Notice and Demand for Payment" of your tax debt well in advance of any action taken.
If you ignore this notice, the IRS will follow up by sending you a "Final Notice of Intent to Levy and Notice of Your Rights to a Hearing." Now the clock begins ticking.
You have 30 days to pay your tax debt or to contact the IRS to try to stop the levy. Even if you're unaware of the levy proceedings, your employer has a little bit of time to warn you if he receives notice that the IRS plans to take the bulk (up to 90%!) of your paychecks. Your employer doesn't have to begin sending your earnings to the IRS until the next pay period. With any luck, your employer will let you know what's going on within this time frame, so you can take action.
If the IRS levies your bank account, the bank will freeze the money in the account and remit it to the IRS after 21 days. Therefore, you must act quickly to try to have the funds released upon receiving a notice that the IRS has levied your bank account.
Now is not the time to do it alone. If you call the IRS, they will often trick you into giving incriminating answers, further distancing you from the tax relief you so desperately need.
They are not your friend. They are there to collect what they believe you owe in taxes. Contact a professional experienced in tax resolution to help you with your case. Would you go to court without a lawyer? Well, it’s the same with the IRS. You need professional representation from a tax attorney who is also a tax resolution specialist.
If the IRS intends to levy your pay or Social Security benefits and you can't come close to making ends meet on what's left, the IRS wants you to contact them. The contact phone number should appear on the levy notice. DO NOT CALL THE IRS (see our note above).
The law requires that the IRS leave you with the total of your tax exemptions for the year plus your standard deduction divided by 52 if you're paid weekly.
Gather your documents and call Jim. He will make the case to the IRS and explain that the levy will cause hardship for you and your family. You'll have to provide documented evidence of this, but if you do, the IRS will release the levy. This doesn't mean you no longer owe the tax. It just means that the IRS will leave your earnings and income alone and work with you to figure out some other way for you to satisfy the debt.
Jim can also ask for payment terms for your tax debt even if the levy won't cripple you financially. If you enter into an installment agreement, the IRS will typically release the levy unless the notice you received specifically states otherwise.
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability or doing so creates a financial hardship. The IRS considers your unique set of facts and circumstances:
The IRS will generally approve an offer in compromise when the amount offered represents the most they can expect to collect within a reasonable period of time. It’s best to explore all other payment options before submitting an offer in compromise as the Offer in Compromise program is not for everyone. Make sure you hire a tax professional to help you file an offer and be sure to check his or her qualifications.
The IRS really doesn't want to destroy you financially. It just wants the money it's owed. If you can make some arrangement to pay or prove that you don't owe the tax, or if you legitimately cannot pay it at this time, you may be able to make the levy go away.
Jim’s firm specializes in tax resolution, even if you have years of unfiled tax returns, he can help! If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to Jim and schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem.