Reducing, resolving, or settling IRS tax liens or bank levies can be complex, but there are several strategies and options available depending on your specific situation:
IRS Tax Liens
Payment in Full
Paying off your tax debt in full will typically result in the IRS releasing the tax lien. Once paid, request a Certificate of Release of Federal Tax Lien (Form 668(Z)) from the IRS, which notifies credit agencies that the lien has been satisfied. We can assist you with this.
Installment Agreement
If you can’t pay the full amount immediately, you can request an installment agreement. This allows you to pay off your tax debt over time. Once you enter into an installment agreement, the IRS may consider withdrawing the tax lien from public records under certain conditions.
Offer in Compromise (OIC)
Qualifying for an OIC allows you to settle your tax debt for less than the full amount owed. If accepted, the IRS may withdraw the tax lien once the compromised amount is paid.
Discharge of Property
You can apply for a Certificate of Discharge of Federal Tax Lien (Form 14135) if selling property will result in paying off the IRS lien. This allows the property to be sold free of the IRS lien.
Subordination
Requesting a Certificate of Subordination (Form 14134) allows other creditors to move ahead of the IRS in priority for claiming assets. This can be useful when applying for loans or mortgages.
IRS Bank Levies
Release of Levy
If the IRS has levied your bank account, you can request a release of levy if you believe the levy creates economic hardship or if the IRS made an error. Contact the IRS immediately to discuss your options.
Installment Agreement
Similar to tax liens, entering into an installment agreement can help prevent future bank levies by showing the IRS you’re making an effort to pay your taxes.
Offer in Compromise (OIC)
An OIC can also be used to settle your tax debt and potentially prevent future levies.
Currently Not Collectible (CNC)
If you can prove to the IRS that you’re experiencing financial hardship and are unable to pay your tax debt, they may place your account in Currently Not Collectible status. This doesn’t resolve the debt, but it temporarily suspends collection actions, including levies.
Bankruptcy
In some cases, filing for bankruptcy may halt IRS collection activities, including levies. However, this is a complex legal process and should be considered carefully with the guidance of a bankruptcy attorney.
Steps to Take
Contact the IRS
Communicate with the IRS as soon as possible to discuss your options. They may be willing to work with you to find a solution that fits your financial situation.
Seek Professional Help
Consider getting help from us. You can also consult with another tax professional, such as a CPA or tax attorney, who has experience dealing with IRS liens and levies. We can provide guidance, negotiate on your behalf, and help you navigate the complexities of tax resolution.
Stay Compliant
Whatever option you pursue, make sure to stay compliant with IRS requirements moving forward. This includes filing your taxes on time and making agreed-upon payments.
Dealing with IRS tax liens and bank levies can be stressful, but understanding your options and taking proactive steps can help you resolve these issues effectively.