An IRS Levy is the ultimate collection mechanism of the IRS. . The IRS tax levy is the most lethal of all IRS collection mechanisms. Once the IRS places a levy they can take your assets in order to cover for the back taxes that are owed. Getting an IRS levy removed means you will need to come to an agreement with the IRS and they will agree to stop taking collection actions against you. There are many ways you can remove a tax levy, below are the most common ways.
1) Pay the total tax amount in full – This is the most common sense way of eliminating taxes owed and getting a levy lifted. If you pay the tax amount owed in full, the IRS will stop collection actions against you and the levy will be released.
2) Avoid the IRS until the Statute of Limitations Expires – Under normal conditions the Internal Revenue Service has 10 years to collect on taxes since the day they were originally assessed. When the ten year period has expired, the IRS can no longer collect from you and the levy will be released. Remember, if the IRS is hot on your case and they haven’t successfully collected the taxes you owe after 9 years, they most likely will attempt to get you to extend the statute of limitations. They may try to word it differently and 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. If you can do this, you will be an expert at avoiding the IRS, not easy at all.
3) Monthly payments through an installment agreement – An installment agreement is a payment plan with the IRS. With an installment agreement you will be able to pay off your back taxes 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.
4) Set up a partial payment agreement – A partial payment installment agreement is similar to the installment agreement, but you can only qualify if you can show you can’t make the payments required for an installment agreement. With this form of payment plan the IRS will allow for smaller payments that may equal less than the original amount of tax owed.
5) File for an offer in compromise – Is considered one of the hardest types of settlements to obtain from the IRS, very strict set of requirements. If your financial situation is so bad that they placed a levy, you can be a candidate though. The IRS only consider people for this type of relief if they fall into one of the following classifications: Doubt to liability, doubt to collectability, effective tax administration (would be unfair).
6) Prove to the IRS you have no equity – Show the IRS that if they seized your assets and sold them, they would not gain any monetary value after all other expenses are paid on the items. Sometimes the IRS needs to be shown this in order to stop collections.
7) Prove to the Internal Revenue Service the Levy causes Economic Hardship –Prove to the Internal Revenue Service that with the levy placed on you, it doesn’t allow you to have the minimum amount of money to pay basic expenses. If the levy hurts your future ability to earn money and you prove this to the IRS, the levy will be removed.
8) Post a Bond with the IRS – When you post a bond with the IRS, this proves to them that you will pay the amount owed and the levy will be released.
9) Appeal the IRS tax 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 difficult. It is important that you use a tax attorney or CPA 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 overwhelming, the advice and assistance of a tax professional can save you lots of money and grief.
Manuel Davis Jr. is a CPA and tax resolution expert for BackTaxesHelp.com
If you owe back taxes and need help settling. BackTaxesHelp.com has the information and connections you need to get your tax problems resolved quickly and correctly.
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