Tips for Stopping a Tax Levy
The levy that frequently causes a tax debtor to reach out to a knowledgeable tax attorney is the notice of intent to levy. The agency informs the taxpayer that they will be taking the final step to collect a tax debt directly from a third party by taking the debtor’s investments, wages, or other funds due to him or her. The IRS has the opportunity to take as many of the funds necessary to satisfy the debt or the major portion of a paycheck, which makes it all the more important for a tax debtor to hire an experienced attorney to stop that garnishment or seizure.
One of the most effective means of doing this is by using a collection due process hearing. This means the IRS discontinues the levy pending discussions with the IRS on alternatives to collecting the tax. This gives the client some time, up to 90 days, in order to identify defenses and alternatives to the tax debt.
Many people are tempted to ignore notices from the IRS because the recipient feels anxiety about being in over their head with a tax problem. You may be able to diminish the consequences or avoid problems by hiring a tax lawyer as soon as you get such a notice, however. Furthermore, hiring a lawyer means that this attorney can serve as the communication go-between with you and the IRS. Make sure you take this situation seriously.
In the event that the hearing is requested after the deadline, the IRS will usually give the tax debtor an equivalent hearing and although they are not required to suspend the levy action, they do have the informal policy of doing so. Collection action can be stopped including a tax levy with the automatic stay of bankruptcy, however, this is only a temporary measure as many tax debts cannot be discharged through bankruptcy. In any case, consulting with an experienced attorney is extremely valuable if you find yourself in this situation. Finding a tax lawyer well in advance of receiving these kinds of notices is strongly recommended, because you will be more aware of the opportunities available to you.