A levy is typically the third or fourth response of the IRS after a taxpayer has chosen to ignore notices. If a taxpayer receives a notice from the IRS, the IRS obviously expects the taxpayer to respond in some way. If the taxpayer doesn t respond within the time allotted, the IRS is left to assume that the taxpayer has no intention of taking steps to remedy the situation that the IRS is trying to address.
The first piece of mail a taxpayer will typically receive is called a Notice and Demand for Payment. If the taxpayer doesn t respond to this, the taxpayer will receive a Final Notice of Intent to Levy and Notice of Your Rights to a Hearing, and it s just as serious as it sounds.
Remember that if a taxpayer s employer is required to levy the taxpayer s wages, then that employer essentially has no choice. Since the situation now involves not only the taxpayer, but also the taxpayer s employer, it s in the best interest of the taxpayer to do whatever is necessary to respond to the situation. Here are five ways to ensure that you avoid a tax levy.
1. Make sure you ve filed everything you need to file. If you ve receive a notice from the IRS, remember that taxes from all years must be filed in order to negotiate with them regarding your debt. If you ve skipped filing in the past, hire a tax attorney to help you prepare your taxes. You can also hire a CPA, but remember that a bookkeeper or CPA is not held to the same standards of confidentiality that a tax attorney is.
2. One way to stop a levy is to contact the Office of Appeals to file for a Collection Due Process hearing. This is not an option for everyone, so research the specifics of this process to make sure that you are eligible.
3. Find out if the IRS has already charged you penalties and interest. If they have, then you may be able to request a penalty abatement. This will reduce almost all of the penalties that have been assessed.
4. Research your past returns to make sure that you actually do owe money to the IRS.
5. Find out if you are eligible for an IRS Debt Settlement Program, Installment Agreement, Offer in Compromise, Currently Not Collectible, or Innocent Spouse.
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.
Not only will the tax attorney be able to remove the levy, but he or she will be able to represent you as you continue your negotiations with the IRS. Tax attorneys are very familiar with loopholes in the tax law, as well as the myriad of ways that you can settle. Tax attorneys also have more experience talking with IRS auditors and aren t vulnerable to the intimidation techniques used by IRS agents the same way you may be.
But don t wait until you ve received a notice from the IRS to hire a tax attorney. A tax attorney can help you arrange your financial situation such that you will never come under the scrutiny of the IRS, and that can save you months, even years, of stress. So find a qualified tax attorney in your area, take advantage of a free consultation to explain your unique situation, and enjoy the relief that comes from having a professional working for you.
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