If you’ve received an IRS notice saying that they intend to levy your bank accounts if you don’t pay up in 30 days, then it’s time to pay attention. Before the IRS actually issues a levy notice, they’ve usually made a few attempts at contacting you and trying to get a payment. If you’ve received an IRS levy notice, it means that the IRS hasn’t heard from you—they think you’ve been blowing them off (which in many cases is true). If you ignore the levy notice, they’ll just take your money and the law is on their side so you need to act now.
First, the responsible thing is to call them, or hire someone to deal with them for you. (I personally think that if you’ve reached this point, it’s best to hire someone—but remember, I do this for a living, so note that I’m biased.)
There are things you can do to prevent the IRS from going through with the levy. Let’s assume that you really do owe the money:
1. You can set up a payment arrangement–you pay off the IRS on a monthly bill schedule
2.Your situation might qualify you for an offer in compromise (the pennies on the dollar thing you see in TV commercials), or
3. Maybe you’re going through hard times and need to be put into the currently uncollectable status—you still owe, but the IRS quits hounding you until you get a job or your situation changes.
But maybe you don’t really owe the money. That’s the big kicker for me. Usually, if you’re getting IRS levy notices, you do owe them money—or at least part of it, but I have seen several cases where my clients don’t owe the IRS anything! A couple of times I have even gotten them refunds instead. If you didn’t do your taxes, and the IRS did them for you, don’t assume that the IRS did them right. When the IRS does your taxes for you, they automatically put you in the highest tax bracket they can justify and you get no deductions or tax credits that you might have qualified for. (Here’s a hint: if you’ve got kids, the IRS probably did your taxes wrong.) Even if you find that you don’t owe the IRS money—you still have to contact them, let them know the situation, and then you’re going to have to provide proof. Usually your proof is your corrected tax return.
Dealing with the IRS is the best way to get yourself out of levy trouble. But here are a few things that you also might want to consider doing while the threat of a levy is still hanging over your head:
1. Make sure your name is taken off of your kids’ and/or parents’ bank accounts. If you’re on someone else’s bank account, the IRS can and will levy that account too.
2. Don’t keep large amounts in your bank accounts. If you’ve got lots of cash, then maybe you can just pay your debt. But usually, this isn’t an option for most people. If your paycheck is going direct deposit into your bank account, get the money out immediately. You can put your cash onto a prepaid Visa debit card. Once the levy is in place, the IRS can only take the funds that are in your account at the time of the levy, if you get another deposit, that money is accessible. Transfer money in only as you need to make payments out of the account.
IRS levies are serious business. Don’t make the mistake of ignoring them.
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Hello, can you tell me if someone else claimed my kids and they asked me if it was OK to deposit a chunk of the refund in my account to keep their boyfriend from finding out so I agreed even though all the money is theirs but I owe back taxes, can the IRS take that deposit even if its not my refund. it was not a levy I don’t believe the deposit was only partially made in my account, the account received only 700 of the 7,000???
Hi Roger,
I doubt the IRS will release the levy on your bank account now that the levy is in place. Part of it is timing and it’s all tied up in the computers. If your refund hits first, then the IRS will take the refund. But, since the levy is in place, it’s possible that they could take part of your refund and still take money from your bank account.
Now–they’re not supposed to be able to take funds that go into your bank account after the levy is set–supposed to being the operative word. I’ve seen bankers make that mistake and turn funds over to the IRS when they weren’t supposed to So you’re better off staying on top of it.
Another thing–if the IRS does manage to grab you money twice, I’ve also seen them turn the extra money they grab over to the state (if the state had a levy) so you really want to make sure you know who’s getting what.
I think it’s worth your time making a phone call and following up with them so you know exactly what they’re up to.
The IRS Put a levy on my Empty Bank account , for failure to file in 2012
They say I owe them 600.00 , I just filed my taxes today and Have a decent amount
of refund , My question is will they Take what is owed to them from this refund amount and release the levy and send me what is left or Do i have to take further action
Hi Dave,
Yes, I’ve heard of that kind of stuff happening all the time! All the time! Now, the first thing to do is to call the Iowa revenue office and get it straightened out. It could simply be a mistake–oopies, it happens. But–it could be a case of identity theft. and that could be a nightmare. Either way, you don’t want to wait to get that fixed.
But computer glitches do happen. I once helped a woman who received an IRS letter where everything was correct until it got the the part where it said she owed over $2 million dollars. I don’t know how it happened, but somehow her social security number got switched with a major corporation and all that company’s income went to her personal income tax. We got it fixed, but you can imagine the shock she got opening that letter.
Hi Rafael,
I need to understand something–you are the one being levied right? So your girl friend put your name on her bank account and now she needs to get her name off of it?
Do you have access to her money? If you do, then the IRS won’t release the money to her. Even if you don’t, since you’re a signer on the account, they’re probably not going to release it.
After the levy is over, she can shut down the account and start over without you on the new account.
I have received a notice to levy from Iowa IRS. I have some comments; the name on the letter is my name (minus any middle initial) and the address is correct. It says I owe over $5000. My problem is that I know I do not owe anything, I have always filed my taxes and never had any issues. After looking this notice over thoroughly I noticed the SSN on this letter is not even close to mine. I have a very common name so my assumption is that somewhere along the line a mistake was made and this was simply sent to the wrong person. Have you ever heard if this kind if thing before? I am very confused as to how they could make a mistake like this since I have lived at my current address for over a decade. And have been filing from this address the entire time. Shouldn’t someone have realized this? Shouldn’t my SSN be attached to this address currently? I am very frustrated by this mess and any advice would be greatly appreciated.
Thanks
My girl put me on her account and now i got levied.. how does she get her name off the account now?? Please help
Hi Ian,
You could just cash the check without depositing it.
hello this is Ian my question is that I have a check that I need to deposit and get the money out so I can get an attorney to stop the levy but I am afraid if I deposit my money that’s when the levee will happen is there any way to avoid thatI would greatly appreciate any advice that you have for me thank you very very much
Hi Beth,
You’re going to be just fine. This is the first time that you were late with a payment. Usually, when the IRS sets up a payment agreement, you can be late three times before they terminate it. You were only late this one time and you already made the payment so you’re fine.
Now, do be careful to not be late in the future. When you pay online, especially if you use EFTPS, you’ll want to pay at least a day in advance. If you’re mailing payments, you’ll want to mail it 10 days in advance because they count the payments on the date they are received, not mailed.
Now, if you owe a lot, and you have a good payment agreement, they seems anxious to cut you off. I had a client how was one day–I’m not exaggerating here, only one day late, but he was late 3 times and they cancelled his agreement. But that was more because he was getting close to the 10 year statute of limitations where the IRS has to drop of the payments. I think they were really trying to prevent him from dropping off that debt.
But you only had one late payment. No worries. Happy New Year!
Hello there, I have a payment arrangement set up with the irs. My first payment was due on Dec 28, 2014, today is Dec 30th, I completely flaked, I payed my payment online though as soon as I realized my error. My husband is very angry with me, he said that they will seize our bank account now? It’s only 2 days late. I’m currently on hold waiting to speak with someine to let them know I paid it and that I’m sorry. Thank you so much!
Hi Joe N.,
Since you set up an installment agreement with the IRS, as long as you are making your payments they are not going to levy your bank account.
And for what it’s worth, I think that setting up your own installment agreement, instead of paying huge bucks to a tax company was the smartest thing you could have done. Some people really need help, but for most people, why would anyone pay more to the tax person than they owe the IRS when they’re still going to pay the IRS anyway? You did good.
Good afternoon I got a letter from the IRS for a levy in my accounts,I went to a tax person ,I was going to end up paying almost twice the amount of money,so what I did was a payment agreement with them,I’m doubtful, do they still going to levy my checking account,let me know please
Thanks a lot.
Hi Jaime,
That’s a really good question. The basic answer is “probably not”. But, there are a couple of situations where I can go, “maybe……”
Situtation 1: and this is the easier scenario. If the money that you owed the IRS was all just for one year, then what you can do is ask for an — and this is the right phrase to use — “abatement of penalties”.
The IRS will never waive the interest, but they will abate penalties if there was only one offence and you were good about making your payments. This is the easiest solution and what you do is call the IRS the old 1 800 829-1040 and get put on hold forever and passed around a bit. But once you get to the right area, you say you’ve paid your bill and would like the “abate the penalties”.
Now, if you’re paying off several years of back taxes, you’re unlikely to get an abatement, but for one year, they should just do it. They actually have a rule about abating for one year.
Now, let’s say you owed for 5 years and have finally paid off the main tax part. That’s much harder. (They really want their money.) If the amount of penalties and interest is substantial, it might be worth you doing an offer in compromise for the balance. Now, I’ve only gotten away with this once, but I’m telling you in case you want to try.
The situation that I had worked on, the man had several years of back taxes that he had been paying on for quite some time. The debt was actually going to “drop off” (meaning that after 10 years, the IRS drops the debt. And they were going after the man like crazy. (He had been in a payment agreement and he had made three late payments – the payments were only one day late but the IRS decided to rescind his agreement and go after him.) I’m just giving you the back story there because this was an unusual offer in compromise
Anyway, what we did was make an offer based not on what he could pay (he had been denied an offer years before because he made too much money) but we based the offer on the fact that the entire tax bill had been paid and that the case had stretched out so long. Plus, my client had been an ideal taxpayer ever since getting into a payment program. His taxes were always filed on time, he never had a balance due that wasn’t paid. He had a really good track record (after the initial tax problem.)
So I’m telling you that in case that might be a solution for you. The IRS does not like to give an Offer in Compromise to people who can afford to pay the tax, but they have been known to make an exception if you’ve got a special circumstance. But I want to give you fair warning that an OIC is a long shot. Try the abatement first.
I keep getting fees and penalties on taxes I owe which keep increasing my amount, but by now I have paid off more than the original amount. would the IRS consider the matter paid off if I show that I have paid more than the original amount?
Hi Sheila,
It’s always hard giving advice on a situation when I don’t have all the paperwork, but I’m going to go out on a limb and make a guess based on what I’ve seen happen with other people I apologize if I’m way off base, but here’s what I think is going on
I think that when you had that problem with the IRS from before in 2009–that got fixed, you’re right about that. But when your tax return got changed with the IRS, they notified the state that there were changes, and you never filed an amended return to correct the state.
So you’re right about being all good with the IRS–but the state is still wrong. And the state believes you owe them money and that’s why they’re levying your account.
So, the IRS says there are no red flags–there aren’t any with the IRS because you took care of that. The state is a whole different agency I see this happen all the time.
No I don’t know what the original problem was–was there income that wasn’t reported, did your filing status change? I don’t know. But whatever it was that changed on your federal return also changed on the state return. And the state tends to be slower about sending out those notices than the IRS is.
My advice is to keep in contact with the state. Let them know that you are working to resolve the issue. Whether it’s getting them the documentation they need or making a payment or whatever. The state is less likely to levy you if you’re in contact with them.
But if they’ve already threatened to levy, you might want to pull your money out except for paying bills, just to be safe. Sorry.
I got notice from the State saying I owed from 2009? I called the state and they said they received something from the IRS, and I had to call them so I did. The IRS figured out that I did owe from 2009 however was paid off in FULL in 2011. PLEASE NOTE THAT WAS A MISTAKE DONE BY MY TAX PERSON AND NOW FIXED.
I asked if was there anything else due they said no and couldn’t understand why the State was just now trying to Levy my account? I’ve filed my taxes every single year with absolutely NO RED FLAGS! The IRS is sending all the proper documentation to provide to the State, but what a complete nightmare this has been!
I don’t want this to happen again, so do you suggest I just pull all money out of my account and just keep whatever for bills in there?
Hi Alex,
Start talking to the IRS. That’s the most important thing. They don’t go after IRA money (it’s not in their best interests moneywise) but once it’s in your checking account it’s fair game.
Call them, set up a date to have your taxes finished by. Get them done. Set up a system for paying–or maybe you’re currently uncollectable. Sounds like you’ve got some financial problems They might actually listen and they might actually be willing to leave you alone for awhile so you can get back on your feet.
But you’ve got to make the call first.
Does the IRS take a 401k distribution check before I would get it? I am currently waiting on my 401k distribution check. I owe the IRS $6k from 5 years ago. Of course I want to pay off the IRS but at this point I’m just trying to save my house. Will the IRS intercept my check before I ever see it?
I haven’t done my taxes in the past 5 years. 6 years ago I owed around $3k, so the following year I didn’t do my taxes for fear the IRS would then have all my employment info and easily garnish my wages. Fast fwd to now, the IRS has contacted me once about the back taxes from the last year I did my taxes (est $5k owed). Now, last week I had to pull from a 401k to save my house. The check should be showing up any day now but I am concerned the IRS will intercept the funds and I may end up homeless. Of course I need to file the past years taxes, should I file now while 401k check in transit, or start communication with IRS before filing? Bigger question, is it likely the IRS already has dibs on the 401k distribution check I’m anticipating?
Any answers are appreciated!! Million thx!
Hi Tanya,
Since you’ve got an installment agreement in place and you’ve been making payments, I think you’re safe. The money you got out of your pension should have no affect on your payment agreement, and since you’ve made your payments–the IRS won’t bother trying to take the money.
Now don’t stop making the payments–otherwise your bank account becomes a sitting duck, But it sounds to me like you’re doing the right things.
Hi.
I owe 9,000 in back taxes from 2011 and 2012. Even though I’m receiving unemployment for the first time I called the IRS in June and made payment arrangements. Every month they take money out of my account as per our arrangement. My question I received a surprise notice from my first employer twenty years ago that I have an option to cash out my pension. I decided to roll most of it over however I took portion for myself because I am struggling to stay afloat. I pay the its each month will they take the portion I decide to keep for myself even though I don’t have a levy notice? I haven’t missed a payment.
Cory,
Dude. I hear what you’re saying, but sometimes you need to understand how the IRS hears it too. It also helps to understand what they mean. When the IRS tells you they’re going to file your taxes for you– that’s a threat. That’s not a favor.
I’m guessing that they looked and saw that you didn’t owe for those years, so they don’t file if you don’t owe. The IRS only files if you do owe.
Why? Because, if you get into trouble later–they can yank your chain for not filing!
So you should have a refund for this year? And you want your money? Then file those returns. It’s possible you could get your money eventually, but they’re in no hurry. And their attitude is, “Hey, if he doesn’t feel like filing, then we don’t feel like sending a refund.”
Hi Jo,
I’ve never had to do that with NYS but I have done that with Missouri. You’ll want to call NY and talk to them. Explain the situation. Make sure you have access to a fax machine. They will probably want documentation like the last three months of bank statements and copies of your daughter’s pay stubs showing that the money deposited is hers and not her dads.
Good luck.
Hi Kevin,
I haven’t seen your returns. I can’t tell you if they’ll pass or not. When trying to figure out the amount on an installment agreement, take the amount of the debt and divide by 72. (That’s for debts at $25K or below.) So, if you get your debt down to $25,000 then your monthly payment would be $350. (Technically $347.22 but I like to round to a round number.)
Ok so I didn’t file for three years in 2008 09 and 10. Last year I had a notice sent saying since I had a refund they would hold until i filed for those years and if I didn’t file it would be filed for me. I ended up getting my refund in late sept. This year I filed and I got the same notice for the same years. Do and now I still don’t have my refund. I thought they filed for me last year and if I owed they would deduct it from my refund I got last year. Should I call them?
My minor child had her account frozen by NYS for a tax levy. Her father is on the account. The account was never used by her father. She receives direct deposit of her paycheck and there is only one debit card issued. The only deposits made to the account were from direct deposits. She was unable to stop the last deposit from going in. The levy was issued about a week before the deposit.Her account is still frozen and shows a balance but zero available. Can they take additional deposits after the levy?
I have read earlier posts that if the person the levy was intended for calls, it’s a possibility of having the funds released. But what if they won’t make the call? Can the minor call and try to plead her case? Would it be wise to gather all the documentations and mail it? The money is currently still in the account but frozen. A review of the account would very clearly show the money was the child’s and not the father’s.
Thanks Jan! Actually there was no balance but there was also no refund. One of my issues is that because it was so long ago I don’t think i have much supporting documentation for the returns and that concerns me as well. What are the chances the IRS does not accept the return and would they tell me anything in the meantime. If i pay down the amount to get it to 25k what would my streamlined payment be. Thanks again for all your help.
Hi Kevin,
The good thing is that you’re doing the right things. You filed the returns and you’re keeping in touch with the IRS.
Now the IRS won’t take the money from your 401(k)–not even if you beg. Why? Because, if they levy your 401(k) then you don’t have to pay the 10% penalty. But if you take the money out of your 401(k) to pay them, then YOU do pay the 10% penalty. See why they won’t levy that? Yes, it stinks.
Now it’s going to take at least 6 months for them to process those returns. They won’t be automatically audited, but they will go through a bit more scrutiny than a timely e-filed return. That said, if the IRS accepts the returns it’s highly unlikely they ever will get audited because they went through the extra scrutiny in the first place.
So, you’ve got a couple of options. You could make an installment agreement based upon the $29,000 debt–that would cost you a little over $400 a month depending upon exactly how much debt there is. If you can pay the debt down to $25,000 you can do a streamline agreement and not have to file any extra paperwork.
The $400 a month is pretty steep. And if you’re not going to owe the $29,000 you wouldn’t have to pay that much–it’s just that you’re waiting 6 months to get that cleared up.
You could fill out a form 433f – a collection information statement, and submit it to get the IRS to give you a lower month payment. Here’s a link to see what it is: http://www.irs.gov/pub/irs-pdf/f433f.pdf
Since you’re doing a good job of keeping on top of the IRS, you might just ask if they’ll let you set up an installment agreement based upon the revised returns balances. I find that they’re much more cooperative with people are are responding to them. Granted, you’ve got that time lag when you weren’t accessible because of your move, but you’ve been keeping up lately. It’s worth a shot. I’ve had some mixed success with that.
But most important–now that you’ve got everything caught up, it’s important to keep up with your filing and tax payments. If you file late or don’t pay your taxes on time, it will automatically cancel your installment agreement.
And one more thing–I recommend having the IRS do a direct debit for your installment payment. That way you’re never late. The IRS is really nasty about late payments and they will cancel your agreement and demand full payment. (And that could trigger liens and/or levies and that’s what you’re trying to avoid.)
Hi Jan, last month i received a collection call from the IRS stating I owed money. I had moved years before and did not receive any mail correspondence from the IRS related to SFR assesstments that filed on my behalf for 07, 08, and 09. These assessments resulted in a 29k tax bill which is much different than my return would have been. Since identifying the issue i have filed the years in question and have talked to the IRS every week to determine the current status to make sure i’m in compliance. Could you explain what the process is to process my reconsideration returns and what i should expect to here from the IRS when this is completed. Are these returns automatically audited since they have made an assessment and determined a bill or are the returns processed in much like a normal return. I’m curious about this because it has made me extremely nervous going through this process. Also, if the IRS amount stays the same and i can’t afford to pay can i request they levy the balance from my 401k? Will this 401k levy ruin my credit? Should i just try to make monthly payment arrangements? I can’t afford for my bank account to be levied since my job includes having a expense account that reimbursements for me to pay off the credit card companies are directly attached to it. Thanks for you help!
Hi Judy,
Your bank should still be able to cash a payroll check even if there is a levy on your bank account. I’m thinking this is not an IRS issue.
That said, try taking the check to another bank or check cashing place and see what happens there.
Or, ask to talk with your personal banker. (You might not have a personal banker but your bank likes to say they have personal bankers.) Get an explanation of the error code. My bank gave me a horrible time a few weeks ago because a client wrote a check to Janice Roberg instead of Roberg Tax Solutions. You would have thought I was a bank robber. So your error code might have nothing to do with the IRS.
Hi Virginia,
So when you went to the IRS tax office didn’t they get everything fixed for you then? They should have. And you should be getting your refund check.
But–it sounds like you may still have an issue. I recommend going in person and making sure that the garnish is released and that your refund is being processed. If they aren’t doing that–then you need to find out why.
But I think you’re doing the right things and can probably handle it on your own without having to hire someone. You sound like you’re doing the right things. If you’re getting nowhere, then hire help, but don’t waste your money unless you’re really not getting anywhere. You seem like you’re on top of this.
Hi Virginia,
The answer should be yes. SHOULD BE yes. But–this happened to a client of mine–the IRS over garnished and since the state also had a lien on her the IRS took the over garnishment and gave it to the state even though the state wasn’t garnishing.
Technically, the IRS was within their rights to do that as far as the law is concerned, but I think it was a really tacky thing to do.
So, if you’ve got any other outstanding debt out there, you could still lose out.
What you need to do is make sure that the IRS releases the garnish as soon as they’ve gotten their last amount of money to make sure they don’t go giving it to another agency.
I owe money to the IRS and recently went to the bank to cash my paycheck – the bank on which it was drawn. Some error code came up and the bank said they would have to investigate. Could that be the IRS?
I had a levy tax and I was 100% sure I dont owe any taxes because when I filed my taxes this march 2014 I did went to IRs and they confirmed that all my taxew are updated. Untill this aug 14 they took half of my paycheck for tax levy and went to the IRs local office they told me its a mistake they use a 2 year old notice . How do ivget back my money that they garnish for a mistake? Thank you.
Does IRs give your money back if they over garnish?
Hi Ingrid,
I do taxes, I’m not an attorney or a social worker so I am not allowed to give advice on child support. I’m sorry.
Hi Steve,
The IRS can levy your Social Security, they can take 15%.
Hi Shannon,
it sounds like something got missed in your original agreement or else you had a balance due with a recent return and you didn’t pay that off.
Instead of paying someone a bunch of money to set up a new agreement, try contacting the IRS yourself, explain the problem, and ask to get the new amount rolled into your current agreement. They might say no, but you never know unless you ask.
Most likely, they’ll up the monthly amount a bit.
Now the most important thing is to make sure that you’re either withholding enough, or making estimated tax payments so that you don’t owe again next year so that this doesn’t happen to you.
But at least give calling the IRS a chance. Some of them are actually nice and can be really helpful–and it will save you a bunch of money.
Hi Raven,
If you contact the IRS and you have an installment agreement set up, they should not levy your bank account. But, if you don’t make the payments, they can.
I had a question about “past due arrears owed on child support” (the current support order is paid 100% and currently is 600 dollars a month) So my fiancé just received a letter stating that they are going to place a “Bank Levy” on his account. He has a good job and has direct deposit set up on his paychecks biweekly. He checked his account today and his account is negative 34,823.00 (what he owes in arrears) so my question is after he puts a stop to his direct deposits are they allowed to take his paychecks or not? We are filing paperwork so that he will be able to modify his current support amount (600 monthly) to less so that he will be able to make a payment plan to pay on this past due arrears balance. We have a family of our own to support and need to be prepared to what is next. Oh by the way this is in the state of Massachusetts and either of the parents do not live in this state anymore. What can we do? We need help!
Can the IRS – or will the IRS attach my Social Security? I’ve heard yes and no! If the answer is Yes, do they take the entire amount or portion of the total amount?
i know that the California Franchise Tax Board can Not attach Social Security if the past 2 months do not exceed the total amount owed.
Thank you…..
SJ
I got some trouble with the irs.. I hired someone they took our money and got us a payment arrangement and were paying it and it s for 4 yr from 2003, ,2004, 2005 and 2006 where we had a business that was not keot up right but we closed it . Now we have been paying this arrangement and now this new thing came in the mail stating civpen for more money they state for some reason was not included in the arrangement we have. I do nt want to lose what wehave we barely make it as it is and we dont have anymore money to hire someone again should we file bankruptcy or is that the irs’s fault for not including them in the agreement. Because we haev nothing but our home and they already have a lean on it.. I am so worried..
Hi JT,
First, if you’re on non-collectible status with a statute of limitations coming up–you never want to stir up the hornets nest by not having your taxes filed.
Okay, that’s said. So, they’re on to you and you’ve got to start over. First, you be the one to contact the IRS, not the other way around. Don’t wait for them, you know you’re on the list.
First, call them and see if you can get back on currently uncollectable. My guess is the answer is no, because you say you’ve got income now.
If you are anywhere near the statute of limitations, they are going to try to pressure you into huge monthly installments. You get around that by filling out a 433A form showing them your current income and expense situation and that’s how you reduce the payment.
If you try to make an offer in compromise, it will extend the statute of limitations–so, if your balance due is set to expire in December of 2017 right now, then the IRS will extend the collection date for the debt for as long as your case in in the OIC office (which can take a whole year.)
Another thing about an OIC. Let’s say you file it, it gets accepted, and you pay. Then two years later you forget to file your taxes. Boom! All of the debt you owed comes rolling back in plus penalties and interest.
OIC is not always a good option for someone with a history of not filing returns. Just saying.
The fact that you have a new bank account doesn’t affect the IRS’s right to levy. They only have to issue the notice once and the right to seize is open. And, remember, they know everything when it comes to things like bank accounts. You will call, they will ask about your bank account, but they already know. It’s shocking what they know.
I would like to say they would issue you a new levy notice, but I can’t guarantee it. I would think they would, I mean it’s been seven years, but better to be safe than sorry. Call them right away and get things squared. Go for the lowest possible payment that you can get and let the statute of limitations get you through this.
When you set up your installment agreement, use the direct debit option and never be late on a payment because the closer you get to the CSED date, the more antsy they’ll get and the enforcement actions will be stiffer.
wow jan, thank you for so much info. going strong for a couple years now!
I did hope you could provide some insight on my situation.
I have old tax debt from 2003, 2004. I got up to compliance in 2007 by filing my old returns and was set for non-collectible status at that time.
I noticed through an online transcript that I’m set to be on collectible status this month (I hope this is triggered because they had no return in 2012 but maybe its my 2014 income that caused it).
I will try filling out the form to be set to non-collectible again but if that’s not an option what might I expect right away?
I was levied once before, probably in 2007 on a checking account. Can they levy again anytime without notice now (on accounts that didn’t even exist in 2007).
Since they may have to forfeit their balance soon will they be terribly aggressive (ie levy wages?)
I did a little research on wage levies in Illinois and it seems that they would get a terribly small amount from me, barely $2000 of the $25,000 debt over 3 years (they should expire from statute of limitations then). Would an offer in compromise even be worth looking into? If they look at it under those terms, I would pay them at amount right now.
I’m afraid they are going to try to pressure me into making large monthly payments and extending or suspending the statute of limitations so I could just pay off forever.
I do feel ashamed and embarrassed about using the law to my advantage and trying to just let it dissolve but this debt has been a constant shadow and I can’t wait for it to be over.
thanks for your time.
jt
Hi Terry,
When you get a letter from the IRS saying you have 10 days to do something before they levy your bank account, the best thing to do is call the IRS. They want to hear from you. They want to know how you’re going to pay them.
Now, if your name is not on your wife’s bank account, they shouldn’t be able to grab it–but make sure it’s not on there. I’ve seen the IRS grab adult children’s bank accounts because their parent’s names were on there but it was forgotten. I’m concerned that your paycheck is being direct deposited to an account that doesn’t have your name on it. But in some states that is legal.
You say you have $1000 of the 1800 save up already. You could set up a payment agreement for about $125 a month which would include your $7000 of current debt. That would get the IRS off your back and you’ve got money in the bank to start paying.
Also, I’d make sure you were withholding more or making estimated tax payments so you don’t fall behind for 2014.
Hi Naeteeri,
I’m sorry for the loss of your sister. It must be so difficult for you to try to deal with all this and her death at the same time.
One of the questions on the Offer In Compromise forms is: Are you the beneficiary of an estate? So the answer is yes. So if your CPA hasn’t turned in the paperwork yet, then you’ll need to answer truthfully. And standing to inherit $240,000 would basically make you lose the offer.
That said, if the IRS already has the paperwork, then the issue would be where do they stand with it? I know that I worked on one offer and quite frankly,I think the IRS took so long to handle it because they figured my client was going to come into money and they wanted to see what would happen. (He didn’t and we closed he deal, but it took much longer than any other offer I ever worked on.)
So, if you haven’t filed you–you’ll need to mention the will. If you’ve already filed, then it depends upon if the IRS is going to ask you for more information or not. You have to tell the truth.
On the plus side, with $240,000 you can afford to pay off the $90,000 IRS debt. I know I’m not sounding helpful, but the Offer in Compromise is for people who cannot afford to pay, not for people who just don’t feel like paying. With $240,000–you’ve got enough money to pay your debt.
About transferring the money to your son. That would be a reportable “gift” and you’d need to file a gift tax return (no tax on it, just a reporting requirement.) To which the IRS would then see that you had $240,000 to give away when you should have been paying them.
You might need to sit down with your CPA to rethink your strategy.
Hi Sheila,
Bottom line, you need to get that 2009 filed right away.
Now, usually the IRS is very happy to accept “voluntary payments” but that doesn’t mean they can’t still go in and levy.
When you talked to them, did that give you a date to get that filed? Usually, I’ll call and they’ll say “we won’t do any further actions until such and such a date.” Did they do that for you? If not, call them back and get a firm deadline.
Then, make sure you get those taxes done and turned in before the deadline. Don’t just mail them in, get the IRS on the phone and say, “I’ve got these taxes, I’m going to fax them to you, not let’s get our payment arrangement done.
Since you’re going to have a refund (which you won’t get because it’s a 2009 return) they won’t be adding any additional tax to the balance due so they can process your payment arrangement.
Now since you’ve had balance dues for three years in a row, you should either start making estimated tax payments or withholding more (depending upon your circumstances.) It’s okay if you have a small balance due on April 15th that you can pay off immediately, but you don’t want to have any huge balances again which require payment agreements. It’s time to pull yourself off their radar.
If you haven’t received those 2009 documents yet, you might be able to get them yourself online. Here’s the link: http://www.irs.gov/Individuals/Get-Transcript
What you’re looking for is the “wage and income transcript”. I say “may” because in order to register you have to answer a bunch of questions about yourself and you might not know the answers. Example: you have a bank account at XYZ bank, what year did you open the account? The questions are tough to prevent identity theft, but they are tough.
I owe fed. taxes for 2010, 2011, 2012. The IRS says they did not receive tax forms
for 2009, I’m not sure what happened it was the only year they owed me $200.
My bank account was levied only a small amount of money was taken because I was running late to make my deposit. The IRS will not allow me to make payment arrangements until they receive the 2009 forms. If I just start sending payments on each year that I owe will that hold off further action? I owe about $11,000 total and can probably have it paid in full in about 12 weeks. The IRS is sending me info. to get 2009 filed again. We had a fire in 2011 and I think my copies were lost then because I have been unable to locate them.
Thanks for any suggestions
My CPA is trying to negotiate an OIC for about $90,000 in back taxes.
My sister passed away recently and it looks like I might be in line to inherit her estate valued at $240,000. She died without a will in California which means it will take about 9 months for probate to sort out.
If the OIC is settled, should I be worried about getting the inheritance and the IRS trying to take it? If the OIC is still pending when probate is finished, can I sign over any inheritance I may be entitled to to my son without the IRS taking it?
Thanks in advance for your guidance.