Can a tax levy be reversed or stopped?
When taxpayers fail to satisfy the back taxes owed by them to state authorities, IRS gains ample power to initiate a harsh mechanism for covering the pending bill. In tax debt cases, IRS gets the right to go far beyond all their general rights for collecting the money owed by the taxpayer. They place a tax levy on the property or assets of the taxpayer and can go as far as levying bank or investment accounts, wages, social security, pensions, insurances and other assets. Before resorting to this process, IRS sends several notices to the taxpayer for bringing attention to the amount owed. In order to make the best use of your time for accumulating funds and avoiding seizure of your assets, it is important to understand the legal meaning of tax levy.
Tax levy explained
Tax levy is generally the last option that IRS resorts to for collecting the owed amount from taxpayers. They start by sending the pending bill to the debtor a few times before initiating the collection process. The taxpayer initially receives a “Notice and Demand for Payment” after tax assessment and a short time gap for making the payment. When the person fails to submit the owed amount, IRS sends a “Final Notice of Intent to Levy and Notice of Your Right to A Hearing”. As per the 1998 IRS Restructuring and Reform Act, if the taxpayer fails to take a suitable action within 30 days of receiving the final notice, IRS gets the right to initiate tax levy process in form of asset seizure, wage garnishment, property seizure, passport revoking, and bank levy.
How to stop a tax levy?
In case of tax levy, timing is crucial. Stopping such procedures demands swift action on behalf of the taxpayer or the person’s representatives. In order to avoid property seizure, extreme caution must be paid for finding a long-term solution of the problem. If you are facing a similar condition, you can opt for one of the following arrangements:-
- Request for an installation plan
- Submit an offer in compromise
- Prove financial hardship
- Request a Collection Due Process Hearing
Can a tax levy be reversed?
For all those who owe a certain amount of tax debts, fortunately there is a provision to reverse a tax levy. If you have failed to pay the back taxes owed to the taxing authorities, you will get a very short span of time to secure your assets again. It is mandatory for IRS to provide a legal notice and an appropriate time gap to the taxpayer for arranging the funds. In such cases, you can work out with professionals and explore your options for reversing tax levy.
The Landis Tax Group, P.C is a highly regarded firm of tax attorneys experienced in IRS matters. If you need any guidance for handling tax levy related issues, get in touch with us.