How to Prevent a Tax Levy
If you ever received a notice of levy or you might suspect the possibility of a levy taking effect in the near future, then it is important to act as soon as you can in order to prevent the IRS from seizing any of your assets. It is best to understand that the IRS does not want to have to levy anyone’s assets, however it is one of the last resorts in collecting unpaid tax. The main purpose of a levy is to scare and somehow force those uncooperative tax payers into paying what they owe. However, if you cooperate with the IRS by filing returns on time and paying your taxes, you can avoid a tax levy in Houston, TX.
There are several ways you can prevent a levy, but this is completely up to your tax situation and your financial being. To further understand the truth about tax levy, below are a few methods that can be used to pay the IRS or settle the taxes that you owe before it is too late.
- Pay the IRS in full: This is the most obvious way in order to prevent a tax levy in Houston, TX. When you pay the IRS in full, they will stop looking for ways to collect from you and they will no longer consider the levy. If you do not have enough funds to pay in full, you may want to consider borrowing from family, friends, selling your assets, or paying through credit card. If this is hard to do, you can consider other options.
- Explain to the IRS that the property seizure was not appropriate for your situation: Unfortunately, it can be a hassle to reverse tax levy property seizures, but if you believe that the seizure is inappropriate, then it is necessary to act on it immediately. Explain to the IRS that you have an alternative plan that will assure them that they will be receiving the payment soon.
- Installment agreement: An installment agreement is one of the most common ways of tax settlement. The IRS cannot impose a property seizure as a result of a tax levy if you have proposed this. With this, you will be able to pay your taxes over a period of time. Plus, you will be considered in good standing with the IRS as long as you continue to pay your dues monthly.
- Partial payment agreement: This is similar to an installment agreement, but the difference is that under a partial payment agreement, the payments are much smaller and the total amount that is paid will be under a certain percentage of the tax amount.
- Offer in compromise: This settlement immediately halts the collection action until it is reviewed. This will allow you to settle the tax debt owed for less than the original amount. However, this option is usually available to taxpayers that meet a strict set of requirements and can fully prove to the IRS that the attempts to collect the full amount can cause serious financial burden.
- Keep your taxes under $5,000: If you keep your bill under $5,000 or less, you will be at a better standing since the IRS cannot do a tax levy property seizure with that amount.
If you think you are at risk of a tax levy in Houston, TX, it is important to consider a few of these methods to stay out of trouble. The IRS has some harsh collection mechanisms that can financially hurt you. However, if you find yourself in this position, it is highly suggested you hire a tax relief professional to help you resolve your problem and act as soon as possible. If you are in need of tax consulting or tax collection and solutions, allow Bobino Tax Consulting Services to help you out. For more information, call 832-483-2791.