11 Tips To Avoid An IRS Tax Levy | Flat Fee Tax Relief | Florida

11 Tips To Avoid An IRS Tax Levy

The Treasury Department of the United States has a well-earned reputation for being serious about collecting tax debt. The mere mention of its enforcement arm – the IRS, is sufficient to invoke anxiety and fear into the most honest of taxpayers. One reason for the trepidation generated by the IRS is that it has a potent arsenal of weapons at its disposal to pursue taxpayers who are in arrears, including tax liens and a tax levy.

Many people confuse tax liens and tax levies. While neither is desirable, a tax lien poses much less financial danger to taxpayers than a tax levy does. A tax lien represents an initial attempt by the IRS to collect revenues from taxpayers who have failed to either pay their taxes in full or to contact the agency to discuss viable repayment options. By contrast, by the time the IRS gets around to filing a Final Notice of Intent to Levy and Notice of Your Right to A Hearing, otherwise known as a tax levy, taxpayers are in imminent danger of losing valuable assets such as cars or homes to seizure.

Avoiding the dire consequences of a tax levy should be your focus. Fortunately, taxpayers who take expedient measures can frequently avoid enforcement by the IRS tax levy. Depending on the personal circumstances involved, it may be possible to dodge a tax levy long enough to contact the IRS with alternative arrangements – or even long term.

1. YOU CAN Request a 120-Day Extension

One of the few absolutely guaranteed ways to avoid a tax levy is to repay what you owe to the IRS in full. If you are here reading our material,paying the IRS in a lump sum is probably an option. Now, if you have a reasonable expectation of being able to repay your tax arrears within 120 daysrequest an extension from the IRS. Once you have made payment, the lien should be released within 30 days, which will automatically cancel the tax levy.

2. Negotiate an Installment Agreement

The IRS can less flexible about allowing taxpayers to extend payments over time when taxpayers try to negotiate their way through an IRS problem. In recent years, the IRS has changed its stance and actively encourages collaboration between agents and taxpayers. So, if you can pay what you owe within a reasonable time frame, generally six years or less, depending on your total balance in arrears, you may be able to avoid a tax levy by negotiating an installment agreement. If so, you need to act quickly to prevent the actual tax levy from going through.

3. SUBMIT an Offer in Compromise

An Offer in Compromise is a formal tax settlement that allows taxpayers to settle their tax debt by paying less than the full amount due. The Offer in Compromise process requires taxpayers to demonstrate that attempts to collect the full amount owed would present an undue financial burden or would otherwise be untenable. As might be expected, the standard for qualifying for an Offer in Compromise are strict, and taxpayers would be well advised to seek an experienced tax professional before pursuing this tax relief option.

IRS Settlement – Offer in Compromise Success

4. Demonstrate Non-collectible Status

If paying your back taxes – or the execution of a tax levy – would create severe financial hardship, you can seek what the IRS categorizes as Currently not Collectible (“non-collectible status).” Once your tax debt has been designated as non-collectible (Currently not Collectible), all attempts to collect a tax levy cease. The tax lien will remains on your record, and you must re-apply for “noncollectable status” 12 to 18 months. Please note that the Statute of Limitations will continue to run out on the collection time available to the IRS. So it is very possible that your tax debt will simply “vanish.”

5. File Chapter 7 or 13 Bankruptcy

Under most circumstances, filing either Chapter 7 or Chapter 13 bankruptcy places an immediate halt on all creditor collection actions, including tax levies. But filing a bankruptcy petition only stops a tax levy for as long as the petition is active. And especially if you file Chapter 7 bankruptcy, you may be required to relinquish personal assets anyway to obtain a discharge. We aren’t Bankruptcy Attorneys so we aren’t going to give you advice. What we can tell you is this, should any of your tax debt not be discharged with a bankruptcy, the IRS will come after you 30 days following a dismissal or discharge.

6. Petition for Innocent Spouse Relief

If you filed a joint tax return with your spouse, you are generally jointly liable for any and all tax obligations. But under limited circumstances, it may be possible to escape a tax levy if you can demonstrate that your spouse is individually responsible for being in arrears with the IRS. Qualifying for Innocent Spouse relief is extremely tough, with strict requirements in place. Many tax professionals don’t even like doing an Innocent Spouse petition because the outcome will probably be “less than desired.” If you believe you qualify, you would be well advised to seek the services of an experienced tax professional in preparing your petition. Our team at Flat Fee Tax Relief has found through the years that most people have a better chance to settle their debt through an Offer in Compromise.

7. Appeal the Notice of Levy

If you legitimately believe that the IRS has mistakenly imposed a tax levy against you, it is imperative to contact the agency by phone immediately to request an appeal. You must also follow up the phone call with a written petition to appeal the tax levy. It is your legal right to appeal a tax levy, and doing so will stop the process while your appeal is being processed.

8. Allow the Statute of Limitations to Run

The IRS is limited by statute on the amount of time that a tax lien is allowed to stand. The Statute of Limitations is usually 10 years from the date of assessment. If the statute of limitations expires before the IRS imposes a tax levy, you are officially off the hook. But this is a very risky strategy, especially since the IRS may simply impose a new tax lien against your account. It is possible to play a “cat and mouse game” with the IRS but do not try this strategy on your own. On the other hand, if you can demonstrate that the statute of limitations has ALREADY expired, your odds of escaping a tax levy improve significantly. Do not attempt this approach without expert legal advice.

9. Claim IRS Procedural Error

This is a possibility but in all sincerity, saying a “Hail Mary” would be better than doing this. In most cases, taxpayers receive multiple warnings before the IRS executes a tax levy. But sometimes mistakes are made. If you can demonstrate that you did not receive sufficient notice of a tax levy, or that the IRS committed some other procedural error in assessing your account, you can request a Collection Due Process hearing, which will halt a tax levy for 30 days after the date of the hearing. The only thing the IRS must prove is that their Notices were sent. The IRS is under no obligation to ensure that you receive the notices.

10. File a Request through the Collection Appeals Program

If you are not satisfied by the results of an appeal or a Collection Due Process hearing, you may file a petition for under the Collection Appeals Program before a tax levy has been executed. You may also file a petition to recover assets such as bank accounts or wages that were wrongfully seized by tax liens under the Collection Appeals Program. But if seized assets such as a home or a car have already been sold, you are pretty much out of luck.

11. CALL FLAT FEE TAX RELIEF TO STOP AN IRS TAX LEVY IN ONE DAY.

Flat Fee Tax Relief has been providing this very valuable TAX LEVY RELEASE service for more than a decade. Our tax professionals and IRS problem solvers were the very first tax relief company to offer this. When our competitors saw how successful we have been, they followed. Flat Fee Tax Relief has always been the Leader in both tax levy release and with tax settlements through the Offer in Compromise program.

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Wage Garnishment | IRS Debt Help | Flat Fee Tax Relief | Florida

Wage Garnishments – Tax Levy – IRS Garnishment

If you have an ongoing tax debt and the IRS feels that you’re not paying fast enough, the agency has the option of garnishing your wages.  A wage garnishment (IRS Tax Levy) is simply a legal seizure of your wages (paycheck) so that the government can satisfy the outstanding tax debt.  Typically, an IRS wage garnishment is very severe and only allows you to keep a small portion of your wages.

The IRS will an order to levy to your employer, and before the wage garnishment starts you’ll be asked to complete a garnishment form.  You’ll have three days to determine how many tax exemptions you’re allowed to take, and it is these exemptions that will determine how much money you get to keep for living expenses.  If you don’t complete the form in time, the IRS will proceed in a manner that works for them.  With every paycheck, a portion will go to you and the rest will go to the IRS.

THE TAX PROFESSIONALS AT FLAT FEE TAX SERVICE ROUTINELY HAVE AN IRS GARNISHMENT STOPPED AND RELEASED IN ONE DAY.

If you are facing wage garnishment (IRS Tax Levy), you owe it to yourself to consult with the tax professionals at Flat Fee Tax Relief.  When you meet with us, we’ll ask you several questions, such as:

  • Were your wages garnished while you were in bankruptcy?
  • Did the IRS send you proper notices?
  • Have filed all of your tax returns?
  • Has the Statute of Limitations on the collection expired?
  • Do you have a spousal defense?
IRS Garnishment – Wage Garnishment

These are just a few of the reasons why the IRS might choose to stop and release the wage garnishment.  There are other circumstances and options available to you as well.  This is why you should meet with an experienced tax professional, who has has a track record, to discuss your particular tax problem and all of the tax relief options available to you.

The most important thing to remember is that if you do not have to live with an ongoing wage garnishment (IRS tax levy). A tax garnishment doesn’t have to be as crippling as the IRS wants it to be.  True, out of all your creditors, the IRS is legally allowed to take the largest portion of your wages.  And, unlike other creditors, it doesn’t have to go to court to get a judgement before doing so.  Working with Powell Tax Law, you can work out a tax settlement or at the very least a installment agreement with the IRS so that if you must live under wage garnishment, you can still have a life.

I am Dave Rosa. It is always my pleasure and my duty to provide everyone who calls in, to provide a comprehensive and realistic evaluation of your tax problems.

Still, the best way to deal with wage garnishment is to avoid it altogether.  The tax professionals at Flat Fee Tax Service can represent you when the prospect of garnishment is still only a threat or is actually an order to levy.  All the possible alternatives to wage garnishment – bank loans, collection delays, payment plans, offer in compromise (IRS settlement) – have one thing in common: they are negotiated by people who understand the system.  If you’re not that person, you need professional help.  Remember, the IRS has the right to take other property such as your bank account and other assets to satisfy an outstanding tax debt.  Let out team of professionals represent you so you can make other arrangements.

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IRS Notice Of Levy | Tax Debt Help | Flat Fee Tax Relief | Florida

IRS Levy – What is a Notice of Levy?

An IRS Notice of Levy is a letter sent to taxpayers who have not paid their back taxes and have an IRS lien placed against them. The IRS is notifying the delinquent taxpayer that the agency will begin enforcing collection of the tax debt using levy actions such as wage garnishment, property seizure, and bank account seizure. A notice of levy causes many problems for taxpayers. It means that the taxpayers’ accounts and assets may be frozen by the tax lien, which may prevent the possibilities of selling them or changing ownership of the items. The taxpayer only has 30 days in which to take care of the tax debt before tax levy enforcement action is taken. Failing to pay back the full amount of your tax debt after receiving an IRS notice of levy will mean that levy enforcement will start unless the necessary steps have been taken.

It’s important to note here that an IRS levy is a legal seizure of your assets to use towards a taxpayer’s outstanding tax debt. They’re different from a tax lien, as an IRS lien is a hold on assets, while a tax levy will actually take them away from the taxpayer.

What Actions Does the IRS First Take Before a Notice of Levy is Issued?

Typically, there are procedures the IRS will follow before resorting to sending a notice of levy. They go as follows. First the IRS has assessed your account, decided that you have a certain amount owed, and then they will send you a notice that demands immediate payment. This is a tax bill the agency expects to be paid upon being received. If the taxpayer neglects to pay the amount demanded, then the IRS will send a final notice of intent to levy accompanied by a notice of your right to hearing. The IRS must also include an explanation for the issuing of the tax levy, the process in which the levy happens, and the alternatives the taxpayer has when dealing with enforcement. These documents are released thirty days prior to the tax levy being ordered, allowing the taxpayer a month to respond promptly. These ‘before’ notices will be sent via certified mail and or delivered at the address the IRS has on file. In some cases, the IRS will hand deliver the notice to the taxpayer.

IRS Wage Garnishment

When Will a Levy Be Issued?

To put it simply, when the IRS computer (ACS) has enough noncompliance information, the Automated Collection System (ACS). This means that the taxpayer has not paid their taxes nor have they taken the proper steps to make arrangements in doing so. The IRS will then take enforcement action and issue a tax levy against assets you own or that others do.

What Can a Levy Be Issued Against?

There are quite a few of things the IRS can levy once the notice has been delivered and there has been no correspondence within thirty days. In terms of what the government can legally take from a delinquent taxpayer, our tax professionals list them here:

Garnish Wages – IRS Wage Garnishment

An IRS Wage Garnishment – the IRS will demand that your employer garnish your wages and send them to the IRS to be applied to your tax debt rather than to you personally. An IRS Wage Garnishment is continuous which means unless it is stopped and released, the tax levy will go on and on until the entire tax debt is paid in full.

THE TAX PROFESSIONALS AT FLAT FEE TAX RELIEF ROUTINELY HAVE AN IRS WAGE GARNISHMENT STOPPED AND RELEASED IN ONE DAY.

Independent Contractor or Vendor Payments – 1099

The IRS has all your information. When an agent is on the case, they can reach out to third parties who owe the levied taxpayer money and demand these payments are sent to the IRS instead. The IRS will seize 100% of the the money due you.

OPM Retirement Benefits, SSA Benefits, Employee Travel Advances

The IRS also has the power to take these perks from you and use them towards the entirety of your tax debt owed. Regarding Social Security Benefits and Veteran’s Pensions, the IRS can take an automatic 15% from your check. This seizure is called The Federal Payment Levy program (FPLP). Try living on what’s left.

IRS Tax Debt Help – IRS Tax Relief

Bank Accounts – IRS Bank Levy

In the worst case scenario, the IRS can put a tax lien on your bank account and lock it from you. After forty five days, they can then demand that whatever money in your account is transferred directly to the IRS. You have 21 days to get your money released back into your account. The 21 days includes Saturdays, Sundays and holidays, so you have no time to lose. You are at a disadvantage if you try to have the IRS bank levy released on your own.

Commissions – Independent Contractors (Insurance Agents, Real Estate Agents, etc.)

Depending on the situation, if the taxpayer is going to be receiving commission from a certain project or legal endeavor, then the IRS will take action and claim the commission to help satisfy tax debt. The IRS will keep it all.

Property (Includes Rental Property)

Any piece of property that the taxpayer owns which could help satisfy their tax debt. This starts with a home and can go all the way to toy vehicles that could be used to satisfy tax debt. Any piece of property that the taxpayer owns which the IRS considers valuable, they can levy and use towards the outstanding amount owed. If you own rentals, the IRS can seize the tenants payments.

Anything of Value

Truthfully, when the IRS has decided to take enforcement action, it’s possible that they can levy anything the taxpayer owns and use it towards the tax debt. Even possessions or holdings that are not considered assets to the taxpayer could be levied and used to resolve the amount owed.

What to Do Once You Receive the Intent to Levy Notice?

To state it simply, the obvious way to avoid having your assets taken and penalties added to your account is to pay off the debt owed. This will resolve matters with the IRS and dismiss the investigation issued for your account. However, if the taxpayer cannot pay the amount owed, then there are alternative programs which they might be eligible for. These are payment programs tailored towards taxpayers that are not in the financial situation to pay off their debts. The two main alternatives being an installment agreement and an offer in compromise.

Installment Agreement

This is basically a payment plan similar to the way one would pay off a loan. Depending on what is agreed between the taxpayer and the IRS, the taxpayer will then be put on a monthly installment plan and pay off their debt in increments. These terms usually last anywhere from 3-6 years. Again, depending on what is agreed, it is possible that through this payment plan the taxpayer will end up paying a larger amount in interest.

Offer in Compromise – Tax Settlement

Offer in Compromise

An Offer in Compromise is a tax settlement between the IRS and the taxpayer for an amount drastically less than the tax debt. Due to the IRS not wanting to implement a forgiveness policy for all those who cannot pay their taxes, eligibility for this plan is limited to those who lack the ability to pay after deducting their allowable expenses. The taxpayer needs to meet very specific criterion and must prove to the IRS that there is no possibility that they could pay the tax owed. The IRS, usually coordinating with a tax professional representing the delinquent taxpayer, will come to an agreement on how much is owed and will settle with one lump sum payment.

FLAT FEE TAX RELIEF HAS A 96% OFFER IN COMPROMISE SUCCESS RATE.

The Different Types of IRS Levy Notices.

The short is answer is no. There are different notices for different types of situations. For instance, a CP297 and CP90 act as notifications to taxpayers that they have an outstanding balance the IRS has tried to collect, and because they’ve been noncompliant the IRS will now take action against them. This action being that they will levy their assets, bank accounts, wages, and more. However, a CP523 is sent to those who entered an installment agreement but did not fulfill the terms. This type of notice will explain why the account defaulted, the conditions of the levy, and the options thereafter to avoid having assets seized.

An L-1058 and L-T11 usually succeeds the final notice balance due letter. This type of levy notice states that a taxpayer has an overdue balance and they have failed to address or resolve the account with the IRS. Due to this negligence and the notices that were sent prior, the IRS will issue a levy on the taxpayer’s assets after a thirty day period.

Then a CP91 and CP298 are notices sent to taxpayers who still owe money to the IRS despite the letters sent warning them of a 15% levy that is going to be placed against their social security benefits (FEDERAL PAYMENT LEVY PROGRAM). These notices typically arrive after a CP297 or CP90.

As you can see, there are multiple different types of levy notices. It’s important that if a taxpayer received a notice, they do the proper research in understanding what sort of notice they have received. Being that levy notices are indicative of a serious tax problem, it’s recommended the taxpayer seeks professional help in formulating a plan of action to ensure their assets are not seized.

IRS Tax Debt Help

The tax professionals at Flat Fee Tax Relief provide valuable IRS tax debt help at a very affordable fee. Our It is my duty, my responsibility, and my pleasure to provide you with a thorough evaluation of your tax problem. Our conversation will take 20 to 30 minutes. By time we complete our consultation, you will know what your tax relief options are and what you can expect to by our tax professionals.



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