| Tori D. from San Diego wrote me with a case where | | | | more complicated. You'll have to go through full |
| she is being garnished at work and it's only leaving her | | | | financial disclosure and prove to the IRS (1) that the |
| a few hundred dollars a month to live off of. | | | | levy is creating an undue financial hardship, and (2) that |
| OUCH! This is one of the worst things that can happen | | | | you can either afford to pay nothing right now or that |
| when you owe the IRS back taxes. Many of the | | | | you can pay a reduced amount monthly. |
| taxpayers I have come across usually have a false | | | | If you can't pay anything right now and can prove it, |
| sense of security when it comes to the IRS because | | | | ask for a "Currently Not Collectible" status. This means |
| they think "hey, I don't own anything so they have | | | | the IRS will release the levy and leave you alone, |
| nothing to take. I'm safe." That is an illusion. | | | | usually for six to twelve months. (Ask for this CNC |
| You see, while the IRS certainly does have the power | | | | status even if you owe the IRS less than $25,000 and |
| to take your car or house, they don't like to do it. It's | | | | can't afford to pay the Streamlined Installment |
| too much work. The upfront paperwork is a nightmare | | | | Agreement"). |
| for the agents, then they have to go through the | | | | Any of these options will release the levy, but make |
| seizure process, and then the auction process, and | | | | sure you ask for a copy of the Release of Levy |
| then no one pays full fair market value for anything at | | | | document and fax it directly to your bank or payroll |
| an IRS auction, so they end up with a lot less money. | | | | department as soon as you get it. |
| Many times it's just not worth it for the agent. | | | | There is also a kind of "trick" for getting the levy |
| But you don't have to auction off cash. And cash | | | | released. But only do this if you plan on going through |
| usually comes from bank accounts and paychecks. | | | | with it. |
| That's where some people make a mistake. If you | | | | Quickly put together an Offer in Compromise (Form |
| have a job, or even are a subcontractor, the IRS can | | | | 656) and the accompanying financial disclosure forms |
| (and usually will) take your money. And yes, they will | | | | (Forms 433-A and 433-B). Then, fill out Form 911 |
| do it even if it leaves you nothing to live off of. | | | | (Request for Taxpayer Advocate Service |
| So if this happens to you, how can you get the levy | | | | Assistance) and state on the form that the levy is |
| lifted? | | | | causing you and undue hardship and that you would |
| SOLUTION: First, you need to make sure all of your | | | | like to get this Offer in Compromise submitted ASAP |
| tax returns (Forms 1040) are filed with the IRS. The | | | | to stop it. |
| IRS cannot by law lift a levy if there are any missing | | | | You see, as soon as the Offer in Compromise is |
| returns. It's ok if you owe for the missing years. You | | | | submitted the IRS will typically release the levy, but you |
| don't have to pay on them. . . just get them filed. | | | | need the Taxpayer Advocates office to help you |
| Next it depends on whether you owe more or less | | | | expedite this. Do NOT do this unless you believe you |
| than $25,000. If less, set up a Streamlined Installment | | | | have a legitimate chance of getting an Offer in |
| Agreement. | | | | Compromise accepted. |
| If you owe more than $25,000 then it will be much | | | | Good luck. |