What is an IRS Levy?
If you owe the IRS money, you will quickly find out what an IRS levy is, but for those who have not experienced this situation, an IRS levy comes about when the IRS garnishes one’s wages to collect tax debt. This is usually something that happens after various other forms of debt repayment are suggested — the next solution the IRS will hand out is jail, so know that an IRS tax levy is a very serious issue.
When an IRS tax levy is in place, one’s employer is bound to comply, and your own personal situation will not influence the amount the IRS takes out. Even if you have other bills to pay, a family to feed, or other pressing financial concerns, it does not matter. Although the IRS does have to leave you with some funds, an IRS tax levy can greatly impact your finances in a negative way.
Can You Stop an IRS Tax Levy?
If you do the right thing at the right time, yes.
To stop an IRS tax levy, you can first try to avoid it. The IRS must take certain steps to get to the point where they can issue a levy. They must demand repayment for your tax liability, and you must fail to respond in order for the levy to come into play. So, if you are able to respond, do so. You will also have an opportunity to come to an agreement 30 days before the wage garnishment begins, when the IRS has to send you a final notice.
The best thing you can do is pay off your IRS debts as soon as possible, before you every face an IRS tax levy. Pay your taxes on time, and do everything in your power to pay off all debts. If you cannot pay the full amount, try to set up an installment agreement. Be proactive in securing an agreement with the IRS that will avoid liens and levies. An attorney can help you with this.
One major way to stop an IRS levy is to file bankruptcy. This will put a halt to wage garnishment for individuals, but any existing non-dischargeable taxes will not be discharged through a Chapter 7 Bankruptcy, but can be paid off in a Chapter 13 Bankruptcy.
Sometimes the best way to deal with a tax liability is to file a Chapter 13 bankruptcy. In such a filing, you may be able to eliminate assessed penalties, stop interest, and in the end, come out of bankruptcy debt free. Taxes can be either completely eliminated or reduced when you file a bankruptcy.
Talk to an experienced bankruptcy/tax lawyer about your situation with the IRS for the best advice. Call our office today to schedule a free consultation.
This blog is intended as a general discussion of legal issues and not as a statement of fact, legal advice or a legal opinion. No attorney-client relationship is created by this blog. Do not act or rely upon law-related information in this communication without seeking the advice of an attorney licensed to practice in the relevant area.