An IRS levy can feel like a financial nightmare. Imagine waking up one morning to find your bank account drained or your paycheck reduced significantly. If you owe back taxes, the IRS has the legal power to take this extreme step in order to collect your unpaid tax debt. While this can be a frightening experience, it’s important to understand how levies work and what you can do to stop them.
What is an IRS Levy?
An IRS levy is a legal seizure of your property or assets to satisfy an outstanding tax debt. Unlike a lien, which is a claim against your property, a levy actually takes your property. This could include funds from your bank account, a portion of your wages, or even physical property like vehicles or real estate.
Here are some common forms of IRS levies:
- Wage Garnishment – The IRS can directly seize a portion of your wages before they even reach you.
- Bank Account Levy – The IRS can freeze your bank account and withdraw funds to cover your tax debt.
- Property Levy – In extreme cases, the IRS can seize and sell your property, such as a car or real estate.
Levies are a serious step, and the IRS typically issues them only after multiple attempts to collect the debt have failed. If you receive a Notice of Levy, it’s a sign that the IRS has taken action and is serious about collecting what you owe.
How to Stop an IRS Levy
While it may seem like there’s no way out once a levy has been imposed, there are several actions you can take to stop or reverse the process.
1. Pay the Debt in Full
The simplest way to stop an IRS levy is to pay the amount owed in full. Once your debt is paid, the levy will be released. However, if you don’t have the financial means to pay your tax debt all at once, there are other options available.
2. Set Up a Payment Plan
If you can’t afford to pay your tax debt in full, the IRS may allow you to set up an Installment Agreement. This allows you to make monthly payments over time, which could be enough to stop the levy from continuing. If you’re already facing a levy, this could be an effective way to resolve your debt.
3. File for Currently Not Collectible (CNC) Status
If paying your tax debt would cause significant financial hardship, you may be able to qualify for Currently Not Collectible (CNC) status. This temporarily suspends collection activities, including levies, until your financial situation improves.
4. Appeal the Levy
In some cases, you may be able to appeal the levy. If you believe the levy was applied in error or there are special circumstances that should prevent it, you can request a Collection Due Process Hearing with the IRS. A tax professional can help guide you through the appeal process.
5. Negotiate an Offer in Compromise
An Offer in Compromise (OIC) is a way to settle your tax debt for less than what you owe. If you can demonstrate that paying the full amount would create an undue hardship, the IRS may accept a lower amount. This is a complex process, but it can be a viable solution to stop a levy.
Why You Should Act Fast
Ignoring an IRS levy can lead to serious consequences. Not only will the IRS continue to seize your assets, but penalties and interest can also add up, making your debt even more difficult to pay off. The longer you wait to take action, the more your financial situation could spiral out of control.
Get Help from McCauley Law Offices
If you’re facing an IRS levy, it’s essential to act quickly to protect your assets and resolve your tax issues. At McCauley Law Offices, we specialize in stopping IRS levies and finding solutions to tax problems. Our experienced team will help you explore all your options and work directly with the IRS to stop the levy before it’s too late.
Call (610) 840-6663 now for a free consultation. Let us help you regain control over your financial future.
