Being a Former IRS Agent Revenue Officer I know how to get levy releases quickly. The following is the information you need to know about the process. You should always work with a tax professional to get the best possible deal with the IRS. Experience pays off.
You can get Immediate Releases of IRS Tax Levies as long as the IRS criterion are met. The two basic criterion are all tax returns filed and up to date and a documented financial statement, 433F.
It is much easier than people think to get IRS Releases of both Bank Levies and Wage Garnishments, as long as you know what you are doing. The average professional tax firm will charge between $2500 – $3500 to get your bank or wage garnishment released as well as get your case closed and off of the IRS enforcement computer.
Here are some things to consider.
IRS does not want to levy. The IRS sends out series of four notices to the taxpayers letting them know of their intentions to levy. However most taxpayers to do respond. There are many cases where the taxpayers moved or never got the IRS notices. After IRS sends out the fourth notice, IRS sends out levy notices to a levy source they have on record. Those sources are usually a bank account or wage information.The IRS gets there levy information from the taxpayers themselves. You give them the levy information on your tax return, interest income from a bank source or your W-2. The IRS very rarely dragnets the banks in your living area.
The two most common levies:
A IRS Bank Levy, 668A is sent to at Bank or Financial Institution. The Bank will hold the funds for a period of 21 days. Your money sits in your account frozen and not yet turned over to the Internal Revenue Service. The IRS gives you a 21 day period to rectify the problem so you get to keep your money.
A IRS Wage Garnishment 668W is sent to your employer. Your next pay check goes to the IRS minus some basis exempt money. Your wages continues to be garnished until the levy is released.
How the release process works:
IRS will require that all your tax returns are filed and up to date. You will have make sure you can fax and send to IRS any tax returns not filed. IRS will not usually release the levy until this happens.This is their leverage to make you file.
IRS will want a documented 433F financial statement. Once IRS reviews the financial statement, 433F, they will decide on how your case will be closed.
How cases are closed:
Settlement agreements can be in different forms:
a. Hardship Settlements. Cases usually go into a 3 year suspended status because of an inability to pay. This is also called currently noncollectable. Your case will go into a hardship status because you do not have the income coming in to meet your current expenses. The IRS will use the National Standards Program to assess hardship.
b. Payment Agreements. Cases can be closed with agreed upon monthly installment payments to the IRS.
c. Offer in Compromise. There are three types of OICs:
The IRS may accept an Offer in Compromise based on three grounds:
1. Doubt as to Collectibility – Doubt exists that the taxpayer could ever pay the full amount of tax liability owed within the remainder of the statutory period for collection.
2. Doubt as to Liability – A legitimate doubt exists that the assessed tax liability is correct. Possible reasons to submit a doubt as to liability offer include:
(1) the examiner made a mistake interpreting the law,
(2) the examiner failed to consider the taxpayer’s evidence or
(3) the taxpayer has new evidence.
3. Effective Tax Administration / Exceptional Circumstances – There is no doubt that the tax is correct and there is potential to collect the full amount of the tax owed, but an exceptional circumstance exists that would allow the IRS to consider an OIC. To be eligible for compromise on this basis, a taxpayer must demonstrate that the collection of the tax would create an economic hardship or would be unfair and inequitable.
