How to Fight an IRS Tax Levy
by ELIZABETH CHECKLEYWhether you call it a wage levy, a wage garnishment, or a tax levy, the bottom line is that the problem can’t be ignored! If you’ve reached this point, you’ve probably exhausted most other avenues available, so you should consider getting some professional help if you want to minimize the disruption to your life. The IRS will usually place a tax levy on your wages if you either fail to respond to a request for tax payment, or don’t stick to payment plans that you’ve already set up. Either way, the IRS is able to garnish your wages, seize assets or bank accounts, or even take government payments such as social security and disability. Yikes!
How to Get Help With A Tax Levy
- It’s important to first understand why the IRS is placing a tax levy on your wages. Generally, three requirements must be met before this can happen: You were sent a Notice and Demand for Payment, you neglected/didn’t pay the tax, and you were sent a Final Notice of Intent to Levy and Notice of Your Right to A Hearing at least 30 days before the levy took effect.
- If you’ve received one of the following notices, you are entitled to a Collection Due Process (CDP) hearing:
- Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320.
- Final Notice - Notice of Intent to Levy and Notice of Your Right to a Hearing.
- Notice of Jeopardy Levy and Right of Appeal.
- Notice of Levy on Your State Tax Refund – Notice of Your Right to a Hearing.
While it’s possible for you to represent yourself, it’s not recommended for most people. These are some complex issues, and it’s important that you’ve got the proper help. IRS Enrolled Agents, CPAs, and attorneys can be hired to help you. If you choose not to appear with them at hearings, make sure that you fill out Form 2848: Power of Attorney and Declaration of Representative. - If you’ve received one of the following notices, you are entitled to a Collection Appeals Program (CAP):
- Before or after the IRS files a Notice of Federal Tax Lien.
- Before or after the IRS levies or seizes your property.
- Termination of an installment agreement.
- Rejection of an installment agreement.
CAP assumes that you are not challenging the existence or amount of your tax liability. You can appeal a seizure of property or a rejection/termination of an installment agreement for paying a debt. Call the IRS at the number on the notice and be ready to explain what action you disagree with, along with why you disagree, and a possible solution to the problem. It’s important to show the agent that you’ve got a game plan for fixing the situation, and are willing to work with them. If you can’t come to an amicable agreement, ask to be referred to a manager. If you still can’t reach an agreement, the case is automatically forwarded to Appeals for review.
If you’ve been contacted by a Revenue Officer and cannot reach a conclusion, request a conference with a Collection manager. If this doesn’t resolve the disagreement, complete Form 9423: Collection Appeal Request. - If you’ve got a low income, there are taxpayer clinics that may be able to help for free or a nominal cost. Check out IRS Publication 4134: Low Income Taxpayer Clinic List for more information.
- If you’ve already tried the above options, and are still having problems with the IRS, it may be worth trying the Taxpayer Advocate Service. This is an independent organization within the IRS that is responsible for assisting taxpayers. To see if you are eligible for assistance, contact the Taxpayer Advocate Service at 1 (877) 777-4778. See IRS Topic 104.
Common Problems
- Not taking the IRS notices seriously enough.
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