July 19, 2020

Will an Offer in Compromise Stop a Levy? | Tax Levy | Legacy Tax & Resolution Services

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Will an Offer in Compromise Stop a Levy? | Tax Levy | Legacy Tax & Resolution Services

HOW TO STOP AN IRS LEVY WITH AN OFFER IN COMPROMISE

At least once a week one of our Tax Attorneys or Certified Tax Resolution Specialists speaks to a panicked taxpayer asking us how to avoid, stop or prevent an IRS levy. There are several ways to stop a tax levy, but one of the most effective way is by file an Offer in Compromise (IRS tax settlement). When our tax professionals receive a call because of an IRS levy, it’s often an emergency-type situation. People need the tax levy lifted (stopped and released) quickly because they cannot pay their bills with the paycheck the IRS is allowing them to keep.

A Little Background- IRS Garnishment-Tax Levy or IRS Levy- Tax Garnishment

Remember, an IRS levy is when the IRS actually takes collection action against you by attempting to take money or assets. This usually comes in the form of a seize of your wages, your paycheck and or your bank account(s). The IRS usually seizes by either wage garnishment or a bank levy. The key difference between an IRS garnishment that seizes your wages and a bank levy is that the wage garnishment is continuous. This means that the IRS files the paperwork one time, sends it to your employer. You get call into your bosses office and they tell you they will be send a major portion of you paycheck to the IRS until the debt is paid in full.

So, what is a Bank Levy?

A bank levy is just what you would expect; they take the money out of your bank account. It is not continuous levy, like the Wage Garnishment, meaning when the levy hits your bank account, the IRS will seize the money in the bank account on that day. This is often referred to as a one-time levy. This can be a little misleading because the IRS can file multiple bank levies because they would be abusive, even for the IRS. You have 21 days from the date the IRS executes the bank levy to convince the IRS, to release the money. The bank will not release the fund unless they get an order from the IRS.

THE TAX PROFESSIONALS AT LEGACY TAX & RESOLUTION SERVICES ROUTINELY HAVE AN IRS GARNISHMENT STOPPED AND RELEASED IN ONE DAY.

The best way to avoid an IRS levy is to get compliant and come up with a plan to solve your tax problem once and for all. However, in the real world, of course, a tax levy happens all the time and people come call our tax professionals when they are missing their paycheck.

Offer in Compromise - Tax Settlement

IRS SETTLEMENT – OFFER IN COMPROMISE

One of the best ways to stop an IRS levy is to submit an Offer in Compromise. Conceptually, the idea of an Offer in Compromise is very simple, you apply to settle with the IRS for less than the full amount. In reality, an Offer in Compromise is anything but simple! There is an awful lot of detail involved and if you don’t do it just right, the Internal Revenue Service will reject or simple return your Offer in Compromise submission. The IRS hopes that you will get discouraged and just give up.

Pros of an Offer in Compromise application:

While the Offer in Compromise (OIC) application is open, the IRS will not execute an IRS Levy/ Tax Levy against the property or rights to property of a taxpayer.

Once the IRS decides that your Offer in Compromise is processable, the IRS must stop a collection actions such as Tax Levy or IRS Levy or IRS Bank Levy and IRS Wage Levy (Garnishment) actions under §6331.

After the Offer in Compromise (OIC) application has rejected, the IRS will not proceed with collections for 30 days immediately following the rejection and for any period when a timely filed appeal from the rejection is being considered by Appeals.

Is an Offer in Compromise- IRS Settlement Worth The Effort?

In the short term, it can and will stop the IRS levy. And in the long term, it can actually settle your entire tax debt for less than what you owe. In other words, you could substantially reduce your tax debt.

Keep in mind that the success rate for someone attempting this on their own is significantly less that an experience Tax Attorney or Certified Tax Resolution Specialist. On average, it will take 10 to 12 months to complete. Our average acceptance rate for an Offer in Compromise is 96%. The average acceptance rate for all OIC currently at 42%. Why is our acceptance rate more than twice the national average? Experience and a superior screening process!. We only accept Offer in Compromise cases when we know we can be successful. Other firms will file an OIC for anyone who pays them, even if there is no hope for success.

THAT’S WHY YOU NEED TO CALL Legacy Tax & Resolution Services – 855-829-5877

OUR TAX PROFESSIONALS HAVE SOME “TRICKS UP OUR SLEEVE” THAT WILL STOP THE IRS LEVY PRIOR TO THE OFFER IN COMPROMISE SUBMISSION. THIS WILL PROVIDE THE NECESSARY “STRESS FREE” TIME TO PUT TOGETHER YOUR OFFER IN COMPROMISE.

Our team doesn’t rely on just on the Offer in Compromise to stop the tax levy. We have other procedures to accomplish that. Once the Offer in Compromise is submitted, it will enforce a stay on collections. The tax levy is stopped once the settlement offer is “accepted for processing.”

LEGACY TAX & RESOLUTION SERVICES, LLC

855-829-5877

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