So you tried to use your ATM, and voila, no moola! Money is gone!!
If the IRS or the state had issued a “Bank Levy”, it is usually due to unpaid back taxes.
To effectively stop and release your IRS or state tax levy, you must show a sense of urgency and act as soon as possible. This is because once the tax agency freezes your bank account, you only have 21 days before the bank hands over your funds to them. You must come up with an acceptable resolution with the IRS or the state during these few days. Even if they do not seize your funds from your bank accounts and do not collect the entire amount of taxes owed, they will levy again and look for new funds that appear in your bank account later. That is why, it is important to pay off your taxes or to come up with some kind of agreement with the IRS or the state in order to prevent them from seizing current and future funds.Ways to stop IRS or state bank levy
There are few ways that can help you release or stop the IRS bank levy on your bank accounts. These are:
Paying the IRS or state in full: Once the tax agency receives the funds to pay for the entire tax amount owed, they will immediately stop the bank levy and give you a full levy release. The reason why most people fall into such bank levy situations is because they're not able to pay back the taxes owed completely. In such cases, you must think out-of-the-box and try to make the necessary resolution.
Securing an IRS payment plan: In situations where an individual or a business taxpayer is not able to pay the taxes owed as a lump sum payment, opting for an IRS payment plan is considered a good option. Payment plans by IRS allow you to pay back the taxes in monthly installments over a certain period of time. And once your payment plan is accepted by the IRS, they will release your levies.
Getting declared as financial hardship: Usually, the IRS does not want to collect taxes from individuals who will not have enough money to feed their families after making the payments. But they will still continue to collect funds if this has not been proven. Often, in cases when taxpayers can prove that their financial situation is bad enough, collections are temporarily paused for months and up to years as CNC currently non collectible.
Securing an Offer in Compromise: Filing for an offer in compromise is a method that allows settling your taxes for less than the entire tax amount you owe. But the IRS is often very selective about who qualifies for this settlement method. Once the offer is filed, all collection activities, including levies, will stop while your case is being reviewed.
Consulting a tax professional: When dealing with IRS bank levy issues, it is highly recommended that you seek the help of a tax professional, EA enrolled agent, CPA or attorney to effectively settle for the lowest amount allowed by law.
We assist our clients in effectively resolving their tax problems on their terms, and not based on the tax agency’s unrealistic demands. Call us today at 1-877-78TAXES [1-877-788-2937].