What Help Can You Receive When Facing an IRS Tax Levy?

Graham Snelgrove

Expert Contributor
Last Updated: December 9, 2021

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If you have a tax debt, you need to determine how to handle this tax debt.
An IRS notice of levy is not the end of the world.
When facing a tax levy, you have options, but you should seek professional tax advice.

Do You Need IRS Tax Levy Help?

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1 Do You Need IRS Tax Levy Help?

2 When Is an IRS Tax Levy Issued?

3 What Do You Do If You Receive Notice of an IRS Tax Levy?

4 Are You Eligible for an Offer in Compromise?

5 Would an Installment Agreement Work for You?

6 Could Your IRS Debt Be Declared Uncollectible?

7 Could You Request a Collection Due Process Hearing?

8 Contact Solvable for Help With a Tax Levy

If you have unpaid tax debts, these debts can lead to the IRS issuing a levy. When the IRS issues a tax levy, the agency can take possession of personal property to satisfy the tax debt.

When the IRS issues a notice of levy against you, this action can be frightening. The thought of having money garnished from your paycheck, having your assets seized, or the funds in your bank account being levied can cause you much distress.

Solvable can connect you with tax experts who offer IRS tax levy help to guide you through the process of paying off your debts.

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When Is an IRS Tax Levy Issued?

The IRS will only issue a notice of intent to levy after the following four requirements are met:

What Help Can You Receive When Facing an IRS Tax Levy?

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Your tax has been assessed by the IRS and you have been sent a tax bill.
You refused or failed to pay the tax.
Within a minimum of 30 days before the levy, you were sent a final notice of the intent to levy by the IRS.
You were sent a notice of your right to a hearing.

If you fail to make arrangements to pay the debt, the IRS can levy any income, such as wages, rental income, or accounts receivables. Bank accounts, retirement accounts, or life insurance values can be levied. Property such as a house, car, or boat could also be seized and sold.

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What Do You Do If You Receive Notice of an IRS Tax Levy?

Once you are notified of tax that is past due, you should follow the instructions included with the notice. The easiest way to avoid any further action by the IRS is to pay the tax due if at all possible.

Borrowing money is preferable to encountering the IRS levy process, and any delay can make your situation more intense. You could use a credit card, ask for assistance from family and friends, take out an equity loan, take out a personal loan, or refinance your home.

Even if you don’t have any means of paying the taxes due, don’t ignore the notice. Respond to the notice by telling the IRS that you cannot pay the tax that you owe.

If you are not certain what course of action to take, you are not alone. Many taxpayers are fearful of the IRS, and they may be unaware of the options they have or how to negotiate with the IRS.

First, seek advice about debt relief before the situation becomes critical. In some cases, you may be able to prevent the IRS from issuing an intent to levy before you receive a notice. Possible options available to you include the following:

You could ask for an offer in compromise.
You may qualify for a payment installment agreement.
The debt could be declared “currently not collectible.”
If you disagree with the IRS about your tax debt, you can make a “Request for a Collection Due Process Hearing.”

Are You Eligible for an Offer in Compromise?

If you are unable to pay your full tax debt, or if paying the full amount due would leave you in financial hardship, the IRS may consider an offer in compromise. This offer would allow you to pay less than the full amount of the debt that you owe. Your unique set of circumstances and facts that the IRS would take into consideration could include the following:

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Your ability to pay the debt
Your household income
The amount of expenses you have to pay out
The equity of your assets

An offer in compromise would generally be approved by the IRS if the amount that you offer is the most that the agency could expect to collect from you within a reasonable amount of time. While your request is being considered, the IRS tax levy process will be halted.

The process of filing an offer in compromise can be complicated, and you should consult a tax professional to determine if this decision is the best course of action for you. A tax professional would also be able to assess the likelihood of your request being accepted.

Would an Installment Agreement Work for You?

An installment agreement is a plan between you and the IRS which enables you to pay off your tax debt in monthly installments until your debt is paid in full. During the term of the agreement, the IRS tax levy will be released. As long as you agree to make the monthly payments, you will remain in good standing.

To qualify for an installment agreement, you must have filed your taxes and paid your taxes on time during the previous five years. Your request for an installment agreement will probably be accepted by the IRS if the agency considers that the installment agreement will be the most likely way that the agency will receive payment of your tax debt in full.

Could Your IRS Debt Be Declared Uncollectible?

Under certain circumstances, the IRS could consider your debt as “currently not collectible” for a short- or long-term period. Your debt may be declared as uncollectible if you don’t have any income or assets which are legally subject to levy or if the levy action would cause you financial hardship by preventing you from meeting essential living expenses.

Could You Request a Collection Due Process Hearing?

If you disagree with the IRS about your tax liability, you are entitled to a collection due process (CDP) hearing. After you receive a notice of levy, you can request a CDP hearing with the tax court within 30 days by filing Form 12153. The IRS tax levy process will be suspended during the period of your appeal.

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Contact Solvable for Help With a Tax Levy

If you’ve received a notice of tax levy and you need help dealing with this situation, Solvable can offer you advice about the various options outlined above. Contact us today to learn more about your tax debt relief options.

Graham Snelgrove

Expert Contributor
Last Updated: December 9, 2021

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