internal revenue service sign

Tax levies are somewhat controversial, but they are a way in which the IRS can reclaim delinquent debts that might be owed to them. Tax liability can be a slippery slope for many people, and many ramifications can occur due to this. You need to make sure you understand the stages in the process that will affect you and how you should deal with them.

Understanding how tax levies apply to you and what you need to do to make the most of this is important. Of course, keeping up with tax and other repayments is crucial, but sometimes things make it more challenging to keep up with payments. If you default on tax payments, you could find yourself the subject of an IRS tax levy, and you need to know what this is, how it affects you, and how you can get it released. 

What is a tax levy?

An IRS tax levy is the legal seizure of a taxpayer’s property to satisfy an outstanding debt that has not yet been paid. When a levy is issued, the IRS can collect and seize assets as collateral to help pay for the debt. This includes things like bank accounts, vehicles, real estate, and other personal property and things like retirement income, pension plans, wages, and more. This is generally a step only taken when the IRS feels it has no other choice, and there are usually many conditions that need to be met before the IRS is allowed to collect a levy.

When is a tax levy issued?

One of the critical things that you need to understand as a taxpayer is when a levy can be issued and on what grounds. It’s important to note that this is never the first step in the process, and if a levy has been issued, you will have had multiple warnings about the unpaid debt. There are three requirements that the IRS must meet in full before it can give a levy, and these are

  1. They sent the taxpayer a tax bill (also known as a Notice and Demand for Payment)
  2. The taxpayer did not pay the tax (either could not or would not)
  3. The IRS sent the taxpayer notice that they would be issuing a levy 30 days after the letter. This is typically known as a Final Notice of Intent to Levy and Notice of Your Right to A Hearing. 

Have tax debt? We can help

How to get an IRS levy released

Now, if you as a taxpayer have had a levy issued against you, and the IRS has claimed some of your personal effects or property, you might decide you want to try to claim it back. Now, this is certainly possible, and there are many steps you might be able to take to help you achieve this moving forward. Here are a few of the critical things you can do to help you get an IRS levy released back to you.

  • Pay the IRS in Full

Full payment of the debt owed will prevent and halt all collection activity instantly. However, this is a rigid boat to be in, as most people only find themselves in this position when they cannot afford to repay their debt fully. A payment plan with the IRS might yield the same outcome if you qualify, and this is something you should talk to the IRS about. 

  • Offer in Compromise

An offer in compromise is where you make an offer to settle your tax, but for a smaller amount than you owe. This is a less common step, but certainly, one that can prove to be more effective moving forward. Of course, the higher the offer, the better, and it will depend on finances, so it is essential to work with a professional to help with this, as it is a complex process and involves much paperwork.

  • IRS Payment Plan

This is a common option that many taxpayers with levies choose to go for, and it is a fast and appealing way of sorting the problem out. You can pay in installments to help you make the most of this right now, and there are so many factors that you need to think about with this moving forward, and it is best to sort out these payment installments as soon as you can. We can help you set up an installment agreement today.

  • Expiration of Statute of Limitations

This is a slightly more controversial step, but one that is perfectly legal. The IRS has ten years to collect outstanding tax owed, and once it reaches this market, you are no longer legally obliged to pay the outstanding amount owed. If you can make it to this ten-year expiration date, the IRS cannot continue with any action and must remove the levy.

  • File for Bankruptcy

Again, this is a controversial and sometimes scary concept that fills a lot of people with dread, but it is one way of getting your tax levy released. Filing for bankruptcy causes the court to issue a ‘stay’ that means the IRS must cease collection activity. Of course, this has a hugely negative impact on your credit score, and this is a step that should only be taken under very extreme circumstances. It would not be recommended as a good way of approaching this, but it can be effective in helping with this. Learn more on if declaring bankruptcy will clear your IRS debt.

There are plenty of things that you need to keep in mind when it comes time to work on getting your IRS tax levy released. A tax levy can be a very worrying process to have to deal with and having a plan of action that you can use to help you achieve success is so important moving forward. And you need to have a few ideas in mind for steps you can take to help you achieve this. Following this guide will give you an idea of the steps to take, and our tax debt relief specialists are one phone call or email us to help you with the entire process.

internal revenue service sign

Tax levies are somewhat controversial, but they are a way in which the IRS can reclaim delinquent debts that might be owed to them. Tax liability can be a slippery slope for many people, and many ramifications can occur due to this. You need to make sure you understand the stages in the process that will affect you and how you should deal with them.

Understanding how tax levies apply to you and what you need to do to make the most of this is important. Of course, keeping up with tax and other repayments is crucial, but sometimes things make it more challenging to keep up with payments. If you default on tax payments, you could find yourself the subject of an IRS tax levy, and you need to know what this is, how it affects you, and how you can get it released. 

What is a tax levy?

An IRS tax levy is the legal seizure of a taxpayer’s property to satisfy an outstanding debt that has not yet been paid. When a levy is issued, the IRS can collect and seize assets as collateral to help pay for the debt. This includes things like bank accounts, vehicles, real estate, and other personal property and things like retirement income, pension plans, wages, and more. This is generally a step only taken when the IRS feels it has no other choice, and there are usually many conditions that need to be met before the IRS is allowed to collect a levy.

When is a tax levy issued?

One of the critical things that you need to understand as a taxpayer is when a levy can be issued and on what grounds. It’s important to note that this is never the first step in the process, and if a levy has been issued, you will have had multiple warnings about the unpaid debt. There are three requirements that the IRS must meet in full before it can give a levy, and these are

  1. They sent the taxpayer a tax bill (also known as a Notice and Demand for Payment)
  2. The taxpayer did not pay the tax (either could not or would not)
  3. The IRS sent the taxpayer notice that they would be issuing a levy 30 days after the letter. This is typically known as a Final Notice of Intent to Levy and Notice of Your Right to A Hearing. 

Have tax debt? We can help

How to get an IRS levy released

Now, if you as a taxpayer have had a levy issued against you, and the IRS has claimed some of your personal effects or property, you might decide you want to try to claim it back. Now, this is certainly possible, and there are many steps you might be able to take to help you achieve this moving forward. Here are a few of the critical things you can do to help you get an IRS levy released back to you.

  • Pay the IRS in Full

Full payment of the debt owed will prevent and halt all collection activity instantly. However, this is a rigid boat to be in, as most people only find themselves in this position when they cannot afford to repay their debt fully. A payment plan with the IRS might yield the same outcome if you qualify, and this is something you should talk to the IRS about. 

  • Offer in Compromise

An offer in compromise is where you make an offer to settle your tax, but for a smaller amount than you owe. This is a less common step, but certainly, one that can prove to be more effective moving forward. Of course, the higher the offer, the better, and it will depend on finances, so it is essential to work with a professional to help with this, as it is a complex process and involves much paperwork.

  • IRS Payment Plan

This is a common option that many taxpayers with levies choose to go for, and it is a fast and appealing way of sorting the problem out. You can pay in installments to help you make the most of this right now, and there are so many factors that you need to think about with this moving forward, and it is best to sort out these payment installments as soon as you can. We can help you set up an installment agreement today.

  • Expiration of Statute of Limitations

This is a slightly more controversial step, but one that is perfectly legal. The IRS has ten years to collect outstanding tax owed, and once it reaches this market, you are no longer legally obliged to pay the outstanding amount owed. If you can make it to this ten-year expiration date, the IRS cannot continue with any action and must remove the levy.

  • File for Bankruptcy

Again, this is a controversial and sometimes scary concept that fills a lot of people with dread, but it is one way of getting your tax levy released. Filing for bankruptcy causes the court to issue a ‘stay’ that means the IRS must cease collection activity. Of course, this has a hugely negative impact on your credit score, and this is a step that should only be taken under very extreme circumstances. It would not be recommended as a good way of approaching this, but it can be effective in helping with this. Learn more on if declaring bankruptcy will clear your IRS debt.

There are plenty of things that you need to keep in mind when it comes time to work on getting your IRS tax levy released. A tax levy can be a very worrying process to have to deal with and having a plan of action that you can use to help you achieve success is so important moving forward. And you need to have a few ideas in mind for steps you can take to help you achieve this. Following this guide will give you an idea of the steps to take, and our tax debt relief specialists are one phone call or email us to help you with the entire process.