How To Stop An IRS Levy

When the IRS is about to levy your assets, you should look for any possible opportunities to stop or delay the levy. Once the levy happens, it’s very difficult to get that property back, but there are several ways to stop a levy before it takes place.

Consider any of these 5 ways to stop an IRS levy and consult a tax attorney to determine which strategy works best for your situation.

1.) Pay In Full

You can stop all IRS collection actions by paying your outstanding tax debt in full, including your back taxes, penalties, and interest. If you don’t have the money on hand, you may be able to sell some assets, borrow against your home, or borrow the money from friends and family.

2.) Request A Payment Plan

The IRS won’t levy your assets if you are making monthly payments as part of an installment agreement. You’ll also be required to file all required tax returns and pay all current tax obligations, such as estimated tax payments.

As a bonus, the IRS will generally delay a pending levy while they are considering your installment agreement request.

3.)  Submit An Offer In Compromise

If you have little disposable income, minimal assets to sell or borrow against, and your financial situation is unlikely to change in the near future, you should consider submitting an Offer in Compromise. The amount of your offer is based on your financial situation. In some cases, you can settle your tax debt for pennies on the dollar.

As with an installment agreement request, the IRS will typically halt collection activities while they are considering your Offer in Compromise.

4.)  Ask For Currently-Not-Collectible Status

Currently Not Collectible (CNC) status is not a tax settlement strategy because it only provides a temporary stay against IRS collections. However, if you just need a little more time to come up with the money you owe, CNC status could do the trick.

If you still can’t pay the IRS after being placed in CNC status for a while, consider your other tax resolution options.

5.)  Request A Collection Due Process (CDP) Hearing

The last notice you’ll get before your assets are levied is a Notice of Intent to Levy. This notice informs you of your right to request a Collection Due Process (CDP) hearing.

You have 30 days to request a CDP hearing, and doing so allows you to delay the levy. The IRS won’t levy your assets until you’ve had your hearing. Even after the hearing takes place, you have the right to appeal most decisions to the U.S. Tax Court.

However, you need to request the CDP hearing by the deadline to preserve these rights. Contact a tax attorney immediately if you receive a notice informing you that your assets will be levied.

Have questions? Contact Venar Ayar.