An IRS tax levy is one of the strongest collection weapons in the IRS arsenal. A tax levy means that the IRS can seize your assets and property as payment for your unpaid tax debt. A tax levy actually provides the government with the ability to take and sell your personal property as a way to settle your tax debt and the IRS has the authority to levy your assets. You can refer to your tax bill wich is contains information about your property worth and your owed taxes.
If you were notified of a tax levy, don’t give up; there are still ways for you to settle your tax debt and remove those levies which is the plural levies.
Here are some suggestions for removing an IRS levy:
- Pay the tax debt in full: After you pay the debt, the IRS will halt the collection process immediately. If you can’t pay the entire debt all at once on your own, some options might include borrowing money from friends or family, taking out a loan, or refinancing your home. The IRS agent might even be willing to put a temporary hold on collection tactics if you have a reasonable plan in place for coming up with the money.
- Set up a payment plan: This option may be the simplest and easiest one available. If you owe the IRS less than $25,000 in tax debt, the IRS will usually halt the tax levy after you have agreed to a payment plan.
- Set up a partial payment plan: Link to the installment plan with your bank accounts, a partial payment plan will allow you to pay the IRS what you owe over time rather than all at once. The primary difference is that your payments will be smaller than with the standard installment plan agreement, and you must be able to show that you lack the financial resources to make the full payments that would be required under the standard installment plan.
- Submit a compromise offer: When you request an offer in compromise (OIC), the IRS will automatically stop all collection proceedings until the OIC offer is reviewed. If the OIC is accepted, you have to pay the amount of the offer. If the offer is not accepted, the IRS will resume their collection proceedings unless you can negotiate a payment agreement.
- Prove undue financial hardship caused by the levy: The conditions on this are very strict, and the IRS is the final judge. The IRS will lift the levy if you can prove that the levy makes it difficult to provide for your family’s basic needs, such as food and shelter.
- Show that the IRS is trying to collect on assets with zero equity: The IRS may lift the levy if you can prove to them that it’s not worth their effort to collect. This only applies in circumstances where you have little or no equity in your assets. Examples include things such as a house with a large remaining mortgage that offsets the selling price.
- Let the statute of limitations expire: The current statute of limitations for the IRS to collect a tax debt is ten years. If the ten-year limit is getting close, the IRS could try to extend the time limit they have by asking you to agree to a payment plan or other kind of tax settlement. If you are in the ninth year of the ten year period, you might be able to let the debt’s statute of limitations expire without payment.