How To Stop an IRS Levy

An IRS levy refers to the actual seizing of property authorized by a tax lien. If a federal tax lien is the IRS's authorization to act by seizing property, then the IRS tax levy is the actual act of seizure. So how can you stop an IRS levy?

You're not alone - every year many Americans suffer IRS tax problems that lead to audit, wage garnishment, liens and ultimately tax levy, but not all of them realize that they can find the tax help necessary to get relief in the form of a settlement. The following information and tips will help you find tax relief and legal help, but it could also be valuable to get advice from someone who worked as an IRS revenue officer for over 20 years - check out "Secrets of the IRS Collection Process".

When the IRS does a levy, they bypass the courts and simply seize your property, whether real or personal. The only time the IRS levy will involve the courts is when the IRS seeks the ability to seize property that is within the lien but currently beyond the reach of the IRS levy, such as necessary clothing, textbooks and certain business necessities.

It's true that an IRS levy notice must be issued before an IRS levy is performed. The customary notice period for IRS levies is 30 days. However, once an IRS levy notice is issued, the levy is basically inevitable. Therefore, to stop an IRS levy, you really have to remove the tax lien. Doing so is difficult and it's best to seek professional help in the form of an IRS tax attorney or tax advisor familiar with liens and IRS levies.

1. Pay your back taxes to prevent an IRS levy. This might be the most difficult (I almost wrote "taxing") methods of removing a lien and subsequently stopping any IRS levy, but it is the surest method as well. Even if you haven't filed a tax return in a while, if you pay the back taxes that you owe, the tax lien will be removed within 30 days and, with it, the chance of an IRS levy.
2. Pursue an Offer in Compromise. It really helps to have IRS lawyers help when offering a compromise. Instead of paying the full amount of tax due (especially if you are nowhere near being able to afford it), you can make an Offer in Compromise, proposing a compromise payment to the IRS instead of the full amount they would gain from the IRS levy. Along with the promise to pay the compromise amount of tax, you would also promise to pay your taxes on time for a period of years. If the proposal is well crafted (again, talk to a tax attorney) and the guaranteed amount more appealing to the IRS than the amount they expect to gain after using their own resources to get it, the IRS might accept your offer and you might prevent an IRS levy. Every action, including an IRS levy, carries a certain cost to the IRS.
3. Sometimes the tax lien expires without issuance of a notice of IRS levy. However, the IRS can easily extend the tax lien, which means you could still suffer an IRS levy in the future. Simply waiting and hoping the problem disappears isn't the best solution to your IRS levy concerns.

If you owe back taxes, consult with a tax professional to see if there's a way you can start paying them and reach a tax settlement. For more information about tax liens, since an IRS levy is inextricably linked to the lien, check out our article - "How To Remove a Tax Lien."