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If a taxpayer repeatedly fails to satisfy a tax debt, one of the options the IRS has is to place a levy on their assets. This could apply to your financial accounts or actual property – but either way, it can make life difficult until the debt is satisfied. For help in getting your financial affairs in order, speak with our tax levy release attorney about how you could resolve an IRS levy in Washington DC.
Taxpayers can stop a tax levy after receiving a notification from the IRS by providing a collection alternative, which could be an installment agreement, Offer in Compromise, or Currently Not Collectible status. Taxpayers are eligible for an individual online payment plan if their debt is under $50,000 and businesses are eligible if their debt is under $25,000.
Installment agreement plans are available when the taxpayer is in current compliance, which means they filed their other tax returns and they have made payments on their most recent tax return.
An Offer in Compromise is essentially a chance to settle the tax debt for less than the amount due. Typically, the reasonable collection potential for the taxpayer is less than the amount due over the collection statute of limitations. The IRS applies a formula, and if it does not look like the taxpayer can fully pay the debt, the IRS will not try to drag this dispute out for 10 years. They are looking to get paid as soon as possible; and in some cases, they take a discount and accept a lesser amount.
Stopping a levy once it has been issued will be challenging because the IRS has gone through all the legal steps to notify the taxpayer of the issue and feels it has no other choice but to use this method. The first step would be to contact the IRS to make payment arrangements or prove that the levy is causing immediate economic hardship. A tax lawyer can take a measured look at the situation and determine which option for resolution will be successful.
Similar to the IRS, the Washington DC government also has the power to place a levy on all taxpayers, pursuant to the DC Code 4471.
An in-business trust fund express installment agreement is a streamlined plan for businesses with trust fund debt, which is an employment tax debt.
In order to qualify for an in-business trust fund express installment agreement, the tax debt has to be no more than $25,000. Full payment must be made either within 24 months or by the collection statute expiration date, whichever occurs earlier. If the amount is between $10,000 to $25,000, a direct debit installment agreement will be required, and the taxpayer should be current in filing compliance and have made payments on their recent tax returns.
A collection hold is an administrative action granted by the IRS, usually in the form of a temporary delay of the collection process. It could be a period of up to nine weeks, but during that collection hold, they cannot issue a tax levy. They still have the right to file a Notice of Federal Tax Lien.
An attorney can help a taxpayer stop their IRS levy by requesting and securing a collection hold and resolving the underlying tax debt with an installment agreement or Offer in Compromise. Once retained, the lawyer will take over communication with the IRS.
Anyone who owes significant tax debt should contact Pontius Tax Law about resolving an IRS levy in Washington DC.
Pontius Tax Law, PLLC is a tax law firm that strives to resolve sensitive tax problems through trust, dedication and value. The law firm was founded by John Pontius with offices in Washington, DC, Rockville, MD, Bethesda, MD, Fairfax, VA, and Alexandria, VA. Mr. Pontius represents individual and business clients with sensitive and serious tax matters before the Internal Revenue Service and state taxing authorities. His client base is local, national, and international.
Over the course of his career, Mr. Pontius has represented businesses and individuals with complex tax issues in the following areas: FBAR examinations, offshore and domestic disclosures, FATCA, FIRPTA, tax planning, unfiled tax returns, release of tax liens and levies, trust fund recovery penalty, IRS and state audit examinations, as well as appeals, penalty abatement, U.S. Tax Court litigation, along with defense of tax fraud and evasion. If you require assistance from a tax lawyer, contact Mr. Pontius to discuss your situation.
