An IRS levy is an aggressive action by the IRS to seize certain possessions. "A Notice of Intent to Levy" is the last notice in a series of notices sent out by the IRS. This is a thirty day notice letting you know, that if you do not respond within that time period the IRS plans to levy specific assets. The IRS will generally send out either a wage levy or a bank levy, although they can levy almost any personal assets with only a few exceptions.
A Levy On Wages
An IRS wage levy is a ongoing levy and one of the most common forms of IRS levy. The employer is instructed tohold a certain amount of the taxpayer's wages, generally the greater part of it. The IRS is required to leave the personal exemption and the standard exemption amounts depending on the number of dependents and filing status.
Levy On A Bank Account
A bank levy is a onetime levy where the IRS seizes what is in the bank accounts the day the levy is provided. Before sending the funds in the account to the IRS the bank must hold them for 21 days. If the levy is not released during this time the bank will send the funds in the account to the IRS. A bank levy is a challenging levy to have released unless the taxpayer can show an extreme hardship (can't pay rent or mortgage, utilities will be shut off, or that the essential food or medical needs for the family will be disrupted).
To avoid a levy it is important to respond to the IRS notices and to take proper steps or have counsel before the IRS.
How to have a levy released
An IRS levy will have to be released by either an Installment Agreement or hardship, but the taxpayer can move on to submit an Offer in Compromise if they meet the criteria, to resolve the tax balance due.
Also, compliance in the filing of tax returns is required before a levy will be released.
Stop IRS levy action with the following:
1. Pay the debt - For many taxpayers this is not an option as they do not possess the money to pay the tax liability
2. Installment Agreement - A payment plan paid in monthly installments to pay the tax liability.
3. Hardship case - This is where the IRS will put the case in a temporary hardship due to severe circumstances or lack of financial ability to pay anything.
4. Offer In Compromise - Settlement with the IRS based mainly on assets and ability to pay. This in and of itself will not release a levy.
An individual can appeal the levy and the IRS will usually suspend the collection process while the appeal is pending. If the Appeal is successful, the levy will be released. However, it is my experience that very few individuals win in the Appeals process because they do non establish why the IRS was wrong to place the levy or why it should be released.
Cynthia Kuhne has been helping individuals solve their tax problems effectively for over 16 years. She is a licensed Enrolled Agent with both the experience and knowledge to stop IRS levy action rapidly. She is the founder and president of CKTax Inc., a full service tax relief company with an "A+" BBB record. If the IRS has attached a levy to your assets, is about to, or you just have a tough tax problem, visit http://www.cktax.com or call 888-894-2005 now.
Article Source: http://EzineArticles.com/?expert=Cynthia_Kuhne
