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If you haven’t paid your taxes in a long time and have recently seen a letter from IRS Tax Representative in the mailbox, this means that the final notice of Intent To Levy is at your doorstep.

The IRS immediately seizes properties or any other assets as a strict action for continued violation of the country’s laws.

However, if you have already received an IRS tax levy, There’s no point in lamenting what’s already happened.

Here’s how you can get an immediate levy release and save your assets from getting seized by following this simple guide prepared by experts at Abraham & Rose

How To Release IRS Tax Levy

People often mistake the IRS as a dangerous asset seizure company, but it’s nothing like that.

If you have received the Tax levy, immediately contact the IRS to resolve the issue. If the levy is causing economic hardship for the individual, there is a high chance that the IRS will release the levy.

Even if they don’t, there’s still the option of appealing before the IRS. Here are some additional steps you can take to release the IRS levy.

8 Ways To Remove IRS Tax Levy:

There are many ways to remove an IRS tax levy. However, some of the easiest methods include;

Appeal A Denial Request

If you don’t agree with the levy and belive the IRS have violated rights, there’s a high chance that you can file a denial request and the the IRS will be required to release the levy under the following circumstances.

 

 

Note: The first method is only applicable to people who don’t agree with the levy, while the rest 7 methods are for those who have agreed with their tax levies.

Pay the Tax Debt 

If you have the money and want to get rid of the Tax levy, simply pay the tax debt in full without delay. Immediately after paying your tax debt in full, the IRS discontinues all collection activities, including levies. 

Submit A Compromise Offer

When you offer to pay a lesser amount than the actual debt, the IRS could waive the remaining amount under the Offer in Compromise. These kinds of plans are usually made for people who cannot pay the whole amount at once.

Filing this request before the levy begins can prevent the levy from being affected.

Arrange an Installment Agreement

The IRS ceases the levy against individuals who fill out the installment agreement. In most cases, taxpayers are permitted up to six years to repay their tax debt with monthly payments. These payments can cover a tax liability of up to $50,000 or, under extended criteria, up to $100,000 over seven years.

Apply For Tax Not Collectible Status

Applying for uncollectible status before the IRS seizes your assets requires you to convince the IRS of your financial inability to settle the tax liability. However, this status is temporary, and the IRS periodically reviews your account for changes.

Remember that this status is only eligible and applicable to individuals with low assets or assets that fall below the set limit by IRS.

Argue Lack of Equity in Assets

If the IRS is levying assets without equity, you could stop the levy by proving that fact. If there is some equity but not enough to cover the expenses of the seizure and sale, the IRS may consider removing the levy.

Prove Levy Release Aids in Tax Debt Repayment

Sometimes, a levy could obstruct the repayment of tax debt. In such situations, individuals should argue that discontinuing the levy will assist them in settling the tax faster, which may result in the IRS releasing it.

Claim Financial Hardship due to Levy.

If the IRS levy is causing financial hardship, preventing you from meeting your basic living expenses, you can apply for hardship status. This could lead the IRS to cease the levy. 

However, the liability still exists, and taking other plans to avoid subsequent levies is much better.

How Can A Tax Levy Affect You?

A tax levy is one of the IRS’s harshest collection methods. When the IRS levies your assets, it legally seizes your property to cover tax debt. Levies can affect you profoundly, making you lose control over your financial situation.

Here are 3 ways the IRS Tax Levy can be a serious problem.

Financial Strain from Asset Seizures

A tax levy often leads to wage garnishments or asset seizures, putting you under immense financial strain. The IRS may take a big portion of your salary, leaving insufficient funds to cover daily living expenses or pay bills. Asset seizures can also derail your financial stability, as personal and real property, such as homes, cars, and bank accounts, are at risk.

Negative Impact on Credit Scores

Tax levies can also impact your credit score. As levies become part of your public record, credit reporting agencies may get notified, lowering your credit score. Consequently, future financial tasks such as obtaining loans, mortgages, or new credit lines become difficult and may involve higher interest rates due to perceived risk.

Frozen Bank Accounts

Freezing the bank accounts is also one of the main targets of the IRS. 

Usually, if the individual hasn’t cleared his debts within the given time, IRS will contact the bank and place a 21-day hold on the bank account. If you fail to submit the amount within the provided time, The bank will send the requested money to the IRS, which can raise serious problems for the account holder.

What Happens When The IRS Levies A Bank Account?

Under a bank levy, the IRS is legally authorized to take control of all funds available in your bank account, aiming to recover the amount corresponding to the unpaid taxes.

When the IRS engages with the bank about imposing a levy, the bank must place a 21-day hold on the user account. Any checks or automatic payments awaiting clearance during this period will require additional deposits, or they may overdraw your account.

Once this 21-day period ends, the held funds are remitted to the IRS by the bank. Importantly, this levy only affects the funds in your account at the time, and new deposits will not be influenced unless the IRS issues a new levy.

 

Final Words

To lift a bank levy, immediate action is required. Try to contact the IRS as soon as possible, or if you don’t know much about taxes and the law, seek the help of a tax professional who can guide you through the process.

At Abraham & Rose, our experienced attorneys can guide you with their valuable guidance and experience. 

Frequently Asked Questions

What Is an IRS Tax Levy?

An IRS tax levy is a legal action taken by the Internal Revenue Service (IRS) to seize a person’s assets or property to satisfy an unpaid tax debt. It allows the IRS to take control of assets such as bank accounts, wages, real estate, vehicles, or other valuable property to collect taxes. 

What is a hardship extension?

A: A hardship extension is a temporary release of a tax levy granted by the IRS if it determines that releasing the levy will help you meet your basic living expenses or resolve your tax debt. You must demonstrate that the levy causes undue hardship, and the extension typically lasts for a specific period, giving you time to address the tax debt.

 Is it possible to release a tax levy by proving errors or flaws in the IRS’s actions?

 

A: Yes, if you can demonstrate errors or flaws in the IRS’s actions, you may be able to release a tax levy. This could include showing that the IRS failed to follow proper procedures, made mistakes in assessing your tax liability, or violated your rights during the collection process.

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