IRS Tax Levy Tips on How to Deal with an IRS Levy

By: Keith Odom | Posted: 16th November 2010

If IRS collection notices are ignored, the IRS is forced to collect from taxpayers by force. They do this with their dreaded IRS levy. By law, the IRS has the right to levy bank accounts (IRS bank levy), garnish your paychecks (IRS wage levy), or even seize your assets. But you do not have to let the IRS bully you or your family. There are ways to stop an IRS levy. The first step is to know the enemy.

Transfer your assets - This is a good option if you know whoIRS is planning on placing a levy on your assets and has not done it yet. If you transfer assets while the levy is in place, the IRS nor the law on this asset. Does the transfer of assets to transfer the property to give away, sell, or a combination of both. Do you have a good friend you can trust to keep the asset in law, until the levy has been fixed? They can be a good choice. Sometimes the IRS can still find ways to prove that you were transferred to theto prevent a seizure, but it will slow them down and buy yourself some time.
Do not let yourself be seen from the assets from the IRS - If the IRS can not movable property (boats, cars, motor homes, etc.) not to see it. Knowing that it is illegal to actually keep information from the IRS information about the products. If you keep your movable property, from which the IRS would expect them to be, it is likely that they will not find them, or will it slow and buy more time. Even if the elements are in another state or country, this makes it extremely difficult to use them to IRS.

The IRS has a lot of immense and discretionary ability to deal with tax infringements. Masses in the U.S. are anticipated to compensate taxes, and when the IRS finds out, there is nothing but trouble in that aspect. A tax levy allows the IRS to place levies and assume belongings without going to court. Application of power does not require a court order - although the court does eventually become involved if in that respect appears an appeal or complaint.

Once you have been through the previous five steps, you will be in a position to settle your back taxes with the IRS. The best thing you can do for yourself is to hire a tax attorney. A tax attorney will be able to remove the levy quickly and then continue to assist you as you work to resolve the entirety of your debt.

Those persons who cannot make full payment immediately should go for an installment agreement. The important thing is to be in continuous dialogue with the IRS for payment of tax. The levy action is normally taken when this communication breaks down.

If you have ignored the obligations that you have under a pre-agreed installment payment plan to repay outstanding taxes, interest and penalties the IRS may have to apply a levy on your assets. If you owe a lot of money to the IRS, then it is more likely that the IRS will apply this levy. A levy can be used to seize your cash or material assets, these material assets are your car, motorcycle, boat and other high price items. A levy can also be used to obtain any income that you may receive in the form of dividends, bonds, rentals, life insurance cash value, retirement fund and commissions.

This is not a negotiation. You only get one shot at it, so listen closely to your tax attorney or Certified Tax Resolution Specialist and take his or her advice to get IRS tax relief.

The IRS will garnish your wages after proper notice. All the IRS wants is payment or a good reason why you can't pay. This is when you can negotiate a payment plan or an Offer in Compromise or convince the agency you are worthy of uncollectible status. It is imperative after you receive a notice of "Intent to Levy" that you deal with it immediately. Intents to Levy are time-sensitive and if you miss your deadline to reply, i.e. make payment arrangements, your employer will be made aware of the situation and your wages may be garnished. If you're not sure how to go about this, consult a qualified tax attorney to assist you.

An IRS tax lien is the federal government's right to ensure payment of owed taxes by allowing them to place a secured debt on a negligent taxpayer's property. Tax liens often result because of delinquent taxes and can be placed on real property or personal property. Typically, they act almost as a mortgage against the property and only come into play when the taxpayer is attempting to sell the real or personal property. At the time of sale, the IRS can then claim a right to the proceeds of the sale.

The IRS issues a notice of it to the person's bank. This notice requires the bank to freeze the party's assets for twenty-one days. During these twenty-one days, the taxpayer or their representative can negotiate with the IRS for release of the levy. If no compromise is reached, after twenty-one days the money in the accounts remits to the IRS.

The good news is that in anticipation of this newly aggressive tax enforcement, the IRS is offering taxpayers unprecedented opportunities to resolve their tax problems.

Depending on how much you owe, you can try to deal with the IRS on your own, or you can seek professional tax help. The first thing you need to do however is to jump on the problem immediately! Do not wait.

Frequently referenced in conjunction with liens, levies involve actually taking property to satisfy tax debt where liens are simply a claim against property used as security for tax debt.

After you've determined that you have a chance at settling your IRS debt, you will need to fill out Form 656 "Offer in Compromise." Make sure you fill out every single space, leave nothing out. Make sure to sign the paperwork, as this is a common mistake people make when they submit their own forms. You do not want your tax settlement offer rejected due to simple mistakes because you will have to submit 20% of your offer along with the forms. If your offer is rejected, this money is non-refundable.

It is crucial to be represented by an experienced tax professional during this process. You will be ensured of receiving the most favorable IRS decision possible.

There is also an IRS Installment Agreement option. Ordinarily, should you arrived at a repayment contract with the IRS such as an IRS Installment Agreement in places you accept compensate your taxes in time they're not going to go after levying your wages, bank accounts, or other private asset you might have.

In the case of bank levy, there is another opportunity as the bank is not required to hand over the money lying in the tax payer's account immediately. The money is required to be paid after twenty one days and this period can be utilized by the tax payer to negotiate with the IRS or work out a plan for payment of tax.

Many IRS filings are complicated, especially when dealing with IRS debt. So many filings are rejected by the IRS simply because of minor filing errors or even because of lack of representation. It is in your best interest to have a tax professional handling these filings for you. They have done many others just like it and know exactly what is required. The IRS works off of formulas. Tax professionals have these formulas figured out from years of experience. Individual taxpayers do not have time to figure these things out and don't have the time or money to "see if it works".

Wage garnishments actually fall under the levy heading. Wage garnishments redirect a portion of your income directly to the IRS. A garnishment continues until either the debt is repaid, expires, or you successfully negotiate a release. Wages can be a paycheck from your employer, federal payments like Social Security, or if you are an independent contractor, accounts receivable.About the Author
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