OBVIOUSLY, the easiest way in stopping the IRS from seizing your property or rights to property is by paying the taxes you owe. In today’s economy, however, it is not surprising if taxpayers could not afford to fully pay outstanding tax liabilities. In its notices, the IRS aggressively demands that taxes owed are paid in full by the defaulting taxpayers.
In my previous article, I explained the different collection activities or tools being used by the IRS to collect unpaid taxes. The most drastic of these is the levy or seizure of the taxpayer’s property or rights to property; the IRS can seize wages, commissions, bank deposits, tax refunds, cars or even a house.
If you’re one of those unfortunate taxpayers facing an imminent levy or seizure, don’t despair as it is not the end of the world. As aggressive as the IRS is in collecting unpaid taxes as mandated by the US Tax Code, the same Tax Code provides remedies on how to prevent, stop or release garnishments, levies and other collection activities.
Should a taxpayer fail to pay taxes when due (usually at the time of filing tax returns or at the time set after an audit becomes final), the IRS will issue tax assessments and send a bill. In the event a taxpayer fails to pay within the required period, the IRS will send a Notice of Intent to Seize Property which will eventually lead to a final notice if the taxes due are still unpaid after 10 days from the date of the notice.
The final notice is the warning that the IRS will levy or seize your property, generally after 30 days, if within the said period you still fail to settle your tax debts. A tax professional can help you prevent this from happening by negotiating settlements with the IRS; this will effectively stop any impending collection activity.
Among other things, a tax professional can initiate on your behalf a so-called Collection Due Process Hearing to review any proposed collection action or negotiate an affordable installment agreement (IA), which will allow you to pay the taxes you owe over a period of time; file an application for an offer in compromise (OIC), which will allow you to pay the taxes you owe at a reduced and much smaller amount; or suspend collection of the taxes you owe for a period of time until such time you are able to pay them in full or via an IA or OIC.
Under any of the above actions to be undertaken by a tax professional, collection actions will stop and provide you with much needed respite from stressful enforcement actions by the IRS. Also, if a levy, wage garnishment or any other collection action, such as a federal tax lien, has already been undertaken or issued, your tax professional can also work for their release or removal.
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Edgardo M. Lopez is an attorney licensed to practice in the Internal Revenue Service and the United States Tax Court. He has been an attorney for 25 years and he is a member of the American Society of Tax Problem Solvers.