No one wants to deal IRS wage levy; all of your pay is taken and you could be living without a paycheck. All of the money you need to live your life on a day-to-day basis is taken out of your bank accounts.
Another big problem is that your employer will be upset that you’ve got an IRS problem. Yes, an IRS wage levy could mean some problems at your work place.
Obviously, you need to do something about it urgently, but what? How exactly should you go about getting your IRS levy released?
There are two ways that you can quickly get this resolved and start working towards and IRS debt free life.
A Bankruptcy Filing Can Stop the IRS Immediately
Filing bankruptcy will result in an immediate release of an IRS levy, no matter the situation. Under bankruptcy law, you will not have to file IRS disclosures nor will you be required to negotiate with the IRS in order to release the levy. What will happen is called a “stay” on collection actions by all creditors, including the IRS. Despite many being opposed to filing bankruptcy, it is a very viable option and can provide an immediate solution, which is needed during an IRS wage levy
An IRS Streamlined Installment Agreement Can Also Stop the Wage Levy
You will qualify for a repayment agreement with no financial disclosures if you owe the IRS $25,000 dollars or less (sometimes even less than $50,000). When you file for this agreement the IRS immediately releases its levy against you, which makes the levy agreement process much quicker and totally eliminates the negotiation process which can take a lot of time. The installment agreement requires payment of your taxes within 60 months of the filing. If you owe more than $25,000 dollars you can pay off the amount down to $25,000 so that you can qualify for a streamlined installment agreement.
Streamlined installment agreements can be very beneficial because your monthly payment will more often than not be less than if you gave the IRS your living expenses and income. Because of the terms of the agreement ($50,000/72 months) the most you will be paying monthly is around $700. The IRS will make a calculation of what you should pay without having to submit any financial disclosures and you can pay more than this calculation to pay off the IRS debt sooner.
One problem with an IRS installment agreement is that all tax returns must have been filed in order to qualify. My office has even had cases in which we have called the IRS over the phone and faxed them recently-prepared returns in order to qualify for an installment agreement, and thereby stop the wage levy.
Other Ways to Suspend a Wage Levy
If you file an offer in compromise or innocent spouse claim it can also result in a release of your levy. Despite not being as concrete as filing bankruptcy or streamlined installment agreement, the law requires the IRS to suspend collection when an innocent spouse claim or compromise is filed. Although this essentially means that the IRS can not send out more levies, – not actually releasing your current ones- the IRS will often release your current levies when either claim is filed.
IRS tax levies can not be pushed away and you must deal with them urgently. Becoming educated on your options is a good step towards understanding how to fix these issues. Hopefully, by following these guidelines you can find a plan that is fit for you and will help you achieve an IRS debt-free life.