PRACTICE CORNER FROM THE CASE RESOLUTION: The 6 Secrets to Getting an IRS Levy Released
The IRS releases thousands of levies every day. Below is “The Checklist” of what to do to be a hero to your client. The IRS levied and/or garnished over 446,000 taxpayer bank accounts or paychecks last year alone. A levy is the physical seizure of a taxpayer’s property or rights to property in order to satisfy a tax debt. A levy generally occurs when the taxpayer has ignored all previous notices to resolve the debt and the IRS has waited long enough and inflicts serious harm by taking the taxpayer’s income or assets, leaving them very little to live on. An IRS levy can be devastating to the person on the receiving end. The IRS is allowed by law to take up to 90 percent of the taxpayer’s net pay to satisfy the debt. Contacting the IRS immediately to request a release of the levy is paramount in resolving your client’s tax liability. After the client signs your bulletproof engagement letter and has paid you based on a value pricing fee schedule, it’s time to get busy! The Checklist: 1. File and register your power of attorney, Form 2848. 2. Obtain and review IRS transcripts and the record of account. 3. Make sure all legally required tax returns are filed and are reflected as such on the tax transcripts. 4. Complete Form 433-F or Form 433-A (if a business, complete Form 433-B) if you are requesting a release under financial hardship. 5. Contact the phone number on the levy notice. 6. Request a full release of the levy and negotiate a properly structured installment agreement, or a partial pay installment agreement or a currently not collectible (CNC) status.
Here are the most common reasons the IRS accepts for removing a levy: • If the IRS releases the levy, it will help you pay your current taxes. • The levy creates an economic hardship preventing you from paying for housing, utilities, food, transportation, or health care. (These are all basic or reasonable living expenses.) • The 10-year collection period expired prior to the levy being issued. • You already paid the amount you owe. • You are entering into an Installment Agreement or CNC. • The seizure was in error. • The IRS was negligent in following their own procedures. • The IRS wrongfully seized your property (you are not the taxpayer that owes the money to the IRS). Here’s to your success,
–Michael Rozbruch
888.670.0303 • 3
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