- February 13, 2020
- Posted by: AnnaMarie L.
- Category: Tax
A tax levy is a seizure of assets/property in order to satisfy a tax debt. As explained by the Internal Revenue Service (IRS), the agency can use several different collection strategies to obtain money from taxpayers, including:
- Wage garnishment;
- Bank levy;
- Property seizure; and
- Confiscation or reduction of a tax refund.
The IRS is powerful—far more powerful than other debt collectors. Still, it is often possible to prevent an imminent tax levy or stop one that is already happening. Below, our Sarasota tax controversy lawyer explains what you need to know about stopping an IRS tax levy.
Be Proactive: Immediate Action can Prevent a Tax Levy
First and foremost, you should always take a proactive approach. In most cases, taxpayers will receive a letter called a ‘Notice and Demand for Payment.’ Essentially, this is a bill from the IRS indicating that additional money is owed to satisfy outstanding tax debt. You should never ignore a demand for payment from the IRS. Unfortunately, the agency simply is not going to go away. If you believe that your tax bill is inaccurate or if you cannot pay the tax at this time, there are options available.
Watch for the Final Notice of Intent to Levy and Notice of Your Right to a Hearing
One of the key documents that you need to watch out for is the CP90 Notice (Final Notice of Intent to Levy and Notice of Your Right to a Hearing). Under federal law (I.R.C. § 6303), the IRS has a legal obligation to make a notice and demand for tax prior to placing a levy on a taxpayer. A CP90 Notice satisfies this requirement. In other words, when you receive a CP90 Notice, be aware that the IRS means business. If you do not take action, you will soon be subject to a tax levy.
Four Options to Stop a Tax Levy or Get it Released
- Make a Full Payment
While not right for most cases, one option that can always be used to get a levy removed is to pay off outstanding tax debt. Once tax obligations have been fully satisfied, the IRS must remove a levy.
- File an Appeal
Another way to stop a levy is filing an appeal. Did you receive a Final Notice of Intent to Levy in the mail? If so, you generally have 30 days to file a Request for a Collection Due Process or Equivalent Hearing. Doing so will stop the levy until you have had an opportunity for a hearing.
- Request an Installment Agreement
If you want to pay off your tax debt, but you are not currently in a financial position to do so, an installment agreement might be the best path forward. Through an installment agreement, you can make payments over 72 months.
- Make an Offer in Compromise
For some taxpayers, the best option is to try to settle the tax debt with the IRS. With professional representation, a reasonable settlement is possible. If the IRS accepts your office in compromise, the tax levy can be removed.
Speak to Our Sarasota, FL Tax Attorney Today
AnnaMarie Mitchell is an experienced Florida tax law attorney. If you have received a Notice of Intent to Levy from the IRS, she can help protect your legal rights and financial interests. To request a free, fully confidential 20-minute phone consultation, please contact us today. From our office in Sarasota, we represent clients throughout Southwest Florida.