If you have financial problems, tax debt is a double whammy. Difficulty in paying that debt is one problem. But things could get even worse if the IRS were to garnish your wages or levy against your bank account.
Is the IRS allowed to do this? In this post, we will address that question.
The short answer is that, if seizing your paycheck or funds from your bank account would cause immediate financial hardship, the IRS may have to back off on its levy action. The agency says as much on its Web page about the levy process.
You probably have questions about what constitutes undue financial hardship. We encourage you to talk with a knowledgeable attorney at our firm about this – and how to deal with the IRS.
In the short term, the goal should be to get the IRS to release its levy.
To be sure, a levy release does not mean you are out of the woods completely. You will still need to negotiate with the IRS about how you will resolve the tax debt you owe.
For example, it may be necessary to work out a payment plan to get the balance of your tax debt taken care of over time. You could also consider making an offer in compromise (OIC), seeking to settle your debt for less than the full amount owed.
Throughout the process, a skilled tax lawyer at our firm can guide you in the appropriate steps. Please visit our page on levy and garnishment for more information.