IRS Levy and how to stop it
The IRS routinely levies bank accounts and wages. The wage levy is often as much as 75% of the paycheck and the bank must freeze and then send all of the money present in the bank account.
This is serious business.
These levies do not stop until the tax is paid or until it is modified or released.
The levy will occur if the tax has been assessed (entered into the books as a debt), the taxpayer has been sent a notice of the debt and demand for payment, he or she doesn\'t pay, and the taxpayer has received a final notice of the IRS intent to levy and a right to a hearing at least 30 days before the levy actually occurs and to the taxpayer\'s last known address.
The collection can be appealed via the collection due process appeal process if one of the following are true:
- No opportunity to dispute the underlying debt
- Spousal defense
- Alternate collection options
- Statute of limitations expiration
- The IRS assessed the debt and sent the levy notice while taxpayer in bankruptcy
- The tax has been paid
- Procedural assessment error exists
If the taxpayer misses the deadline to request a collection due process appeal hearing, the IRS will still release the levy if:
- The debt is paid
- The time has expired for collection of the debt
- An alternate legal alternative is negotiated like an installment agreement, non collectible status and the taxpayer is compliant or has filed all returns.
- The taxpayer is facing a hardship (may not require all returns to be filed immediately)
- The taxpayer files a bankruptcy case invoking the Bankruptcy Code\'s automatic stay injunction
It is important that you read our tax blog about levy and garnishment issues and then call to discuss your situation. If you have outstanding tax debt and/or are being levied or garnished, we can help you stop it and deal with the debt.