Bank Levy Release: Stopping IRS Bank Account Garnishment
When it comes to stopping an IRS bank levy it is important to act quickly. Once the IRS freezes your bank account you will only have 21 days until the bank sends those funds over to the IRS. During this period you may be able to work out a resolution with the IRS. Even if the IRS does end up seizing funds from your bank account and they did not collect the entire amount of outstanding tax debts they will levy again in the near future once more funds appear in the bank account. If you want to prevent the IRS from seizing your funds it is important to pay off your taxes or come to some other form of agreement.
Ways to Release/Stop an IRS Bank Levy
Once the IRS has received the funds to pay off the entire tax amount owed they will immediately halt the bank levy and you will be back into good standing with the IRS. The reason most people get into the situation of a bank levy is because they couldn’t pay their taxes in full. If this is the case you can think outside of the box a bit in order to pay for the taxes owed. Say you know that bonus from work is coming but you just haven’t received it yet and by the time you receive it the IRS will have already levied your bank account. In this case it could be a good idea to borrow from family or friends temporarily until you will get that extra money. Or maybe you have an old car sitting in the garage that you haven’t touched in years and you know it is a classic and worth some decent money, this could be a good time to consider selling it in order to come up with some funds to stop the IRS.
The most common way for individuals to pay back taxes when they can’t afford a lump sum payment is to pay back through an IRS payment plan. The most common form of payment plan is an installment agreement. With an installment agreement you will be able to pay back the taxes owed in monthly increments over a period of time. Once your payment plan has been accepted by the IRS you will be considered in good standing with the IRS. It is likely the IRS will accept your payment plan if you can show you can afford to make the monthly payments and you don’t have a history of defaulting on these types of agreements.
The one thing to note about the IRS is that they do not want to collect from individuals if it were to leave them without enough money to feed their family or put a roof over their head but will continue their collection mechanisms even if this were the case unless it is proven to them. Many times collections can be temporarily paused for months and up to years if a taxpayer can prove that their financial situation is bad enough that it would be unfair for the IRS to collect.
An offer in compromise is a method that allows a taxpayer to settle their taxes for less than the total amount owed. The IRS is very selective about who qualifies for this settlement program. People who are being faced with bank levies tend to qualify for these types of agreements. If you want to consider this form of settlement it is a good idea to talk with an offer in compromise professional to see if you will qualify. Once you file for an offer in compromise it will stop collection actions while your case is reviewed.
When dealing with an IRS bank levy it is highly suggested that you use a tax professional to help. Normally when resolving problems with the IRS they are willing to work with the taxpayer but the problem with resolving a bank levy is that it is very late in the IRS collection process and the IRS has already lost trust in you and has determined that you are unwilling to work with them on coming to an agreement. Once you hire a tax professional to resolve your problem on your behalf this shows the IRS that you actually are willing to resolve your tax problem and they will be more willing to come to a fair resolution, rather than enforcing the bank levy.
No matter which way you choose it is important to act quickly to prevent IRS seizure. If you are unsure about the best method to use it is always a good idea to consult with a tax professional.
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