If you think
that the money in the bank account is going to be safe from the IRS, then you are
completely wrong. It is a nightmare situation – You’re at the ATM. To your
great shock, you aren't able to withdraw the cash. Your balance shows negative.
You rush to the bank only to find that your account is under IRS bank levy and
you receive a copy of levy notice letter from them. You are totally shattered.
Do not think
that you cannot come out of this levy. As a tax attorney, I can assure that for
each and every tax problem, there is a solution. In-fact, there's no such thing
as a hopeless tax case. The next few paragraphs will tell you how.
1. The
Internal Revenue Service has enforced a levy but the cash in your account will
not go immediately to the government. The
bank will freeze your money for a three week period from the date of levy after
which only it will be transferred to the IRS. So within this time period, you
need to do the negotiations with the IRS and request for the money to be
returned to your bank-account. This is called as levy release.
2. The IRS
could possibly ask various details such as your previous tax returns, the amount
withheld from your salary for income tax and also your estimated tax payments.
There are exceptions to the regular practices, so the IRS employee is not the
last word.
3. You will
need to complete a form which IRS uses to capture your financial situation.
This form is referred to as Collection Information Statement and from this the
IRS will know exactly how to garnish you in the future, including other bank accounts
and the wages. So utmost care has to be taken about the information you are
going to provide to the IRS.
4. In case
your application is denied, you have the right to appeal against IRS
enforcement actions. There are two main appeal processes- Collection Appeals
Program or CAP and Collection Due Process. Most IRS actions related to tax collection
can be appealed with the CAP process. Not only that, Collection Appeals Program
provides taxpayer a higher success rate when compared to other programs like Audit
Appeals, Offer in Compromise and Collection Due Process. You know what, IRS
publishes a rule book called Internal Revenue Manual (IRM) to guide their
agents and it gets regularly updated by the federal government. But IRS
employees has a hard time with this book since it is very complicated and many
times, they miss to follow the rules exactly right during the tax collection process.
Here we use this effectively to win the
CAP appeal by pinpointing the mistakes and the rules that was not followed by
the IRS agents to the appeals officer. When it is shown with supported documents, the
appeal officer will reverse the IRS levy enforcement and your garnishment gets released.
5. You got a
garnishment relief. However it doesn’t mean you can relax yourself forever since
a levy release is often temporary. It is just a start of your representation.
It's best to immediately begin work towards getting a permanent solution. Every
cloud has a silver lining so it's time for you to analyze the choices available. To
stop the bank levy permanently, settle your tax debts as soon as possible or
take the alternate steps that is available to you. Otherwise, don' get
surprised to see many more IRS garnishments on your hard earned money.
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