April 7, 2015

Denver Tax Attorney   Stopping an IRS Tax LevyHow Do You Stop An IRS Tax Levy?           

If you’ve received a notice of intent to levy from the IRS or know that it is possible for a levy to take effect in the near future, it is crucial that you take action as soon as possible in order to prevent the IRS from seizing any of your assets. You must, therefore, pay your taxes or make arrangements to settle the tax debts owed.

There are numerous ways to prevent a levy, and your choice should depend on your financial well-being and your current tax situation. Some of your options include:

Pay the IRS in Full

The simplest and most obvious way to stop a tax levy is by paying the debt in full, inclusive of penalties and interest. By doing so, the IRS will no longer enforce the levy and they will stop collection actions. If you lack funds to fully pay for your tax debts, you may want to think about getting a loan, borrowing from close friends and family members, refinancing your home for an equity loan, or selling some of your assets. If you feel that it is possible to get the entire amount together to pay in full but need extra time to gather the needed funds, speak directly to an IRS collector. The collections process may be delayed if he or she believes that your request is a reasonable one. If borrowing funds or selling assets will still result in financial difficulties, there are other options to look into.

Installment Agreement

The most common form of tax settlement with the IRS is an installment agreement. This option allows you to pay your taxes in monthly increments over a certain period of time, up to three years. You will be considered to be in good standing with the IRS as soon as you enter into an installment agreement, provided that you honor your monthly payments. However, take note that while penalties stop accruing, interest will continue to accrue on the outstanding tax balance.

Partial Payment Agreement

A partial payment agreement is similar in nature to an installment agreement, except that your monthly payments are smaller. The total sum to be paid off is also lower than the original amount of owed back taxes. You must, however, be able to establish that you lack the necessary funds to make the payments required in an installment agreement in order to qualify for a partial payment agreement.

Offer in Compromise

An offer in compromise is an option made available to you only if you meet a strict set of requirements, and if you can prove to the IRS that the collection of taxes would cause you to suffer a serious financial burden. When presenting an offer in compromise, the IRS will decide whether to accept or reject your offer. If the IRS accepts your offer, they will halt all collection actions and allow you to settle your tax debt for the total amount you agreed upon. If your offer is rejected, then all collection actions resume unless another payment method is arranged.

File an Appeal

If you have reason to believe that the IRS was wrong to place a tax levy on your assets, then you may file for an appeal. You first need to either submit a letter requesting an appeal hearing or speak directly with an IRS agent. Take note that you should not file an appeal in order to delay paying the IRS.

Consult with a Tax Lawyer

It is important to understand that the IRS does not wish to levy your assets, and they will not impose a levy if you are cooperative. A levy is a harsh, last resort collection mechanism, and it can greatly hurt you financially. It would be in your best interests to consult with an experienced tax attorney in order to resolve your problem in the soonest possible time.

 

Categories: Blog, IRS, Tax Levies, Uncategorized

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