Liv Worthington has worked in the debt management field for many years. She also advises clients with IRS back taxes who are facing an IRS tax levy or bank levy and need a fast tax solution.
Posts tagged ‘Levy’
This is the IRS’s forced collection method where they will sell your possessions in order to fulfill your tax debts. An IRS tax levy is the most lethal of all IRS collection methods. With a levy, the IRS
It’s important you do not to ignore IRS back taxes for long. When IRS collection notices are ignored, the IRS has to resort to collecting from taxpayers by force. They do this with their dreaded IRS tax levy. By law, the Internal Revenue Service has the right to issue an IRS tax levy on you. This means it’s completely legal for the IRS to levy your bank accounts, issue wage garnishments, and even seize your assets in extreme cases.The most common IRS tax levy collection tools are the IRS bank levy and the IRS wage levy. If you receive notice from the IRS that either Tax Levy is going to be issued on you, you need to act fast. Your income and bank account funds are at stake and the matter is now extremely urgent! IRS Bank Levy: The IRS bank levy is an extremely harmful way to collect IRS back taxes. All of the money you scrimped and saved can be gone in and instant. Here’s what happens when the IRS Issues a bank levy:1. First, the IRS freezes your bank account.2. They give you 21 days to contact them and explain why you should receive the money. If you do not comply, the IRS will keep all of the money in your account for good.If you received a Notice of Intent to Levy from the IRS, it’s imperative to act fast and get your tax debt taken care of. It’s a smart idea to consider professional help at this point. Timing is crucial and a tax professional has a better chance of negotiating with the IRS and getting the bank levy removed in the short 21 day time frame. Remember that once the IRS seizes your account funds with the bank levy, you will not be able to get them back. IRS Wage Levy: The IRS wage levy is another brutal method used to collect IRS back taxes. It’s also known as wage garnishment. Basically, the IRS can take a percentage of your paycheck until your tax debt is paid in full, or until the statute of limitations on your tax debt expires. You do not want the IRS to seize money from your paycheck for years. Remember, they can seize up to 70% of your paycheck. It’s important to work fast to find a better solution for paying off your IRS back taxes. Stop the Bleeding: Your bank account and paycheck are being threatened. How do you stop the tax levies, and fast? You have to start by giving the IRS what they want. You have to make an arrangement to pay on your IRS back taxes. You can pay by settling your tax debt (for less than the full amount due) with an Offer in Compromise, or your can pay them monthly through what is called an Installment Agreement. Hiring Professional Help: Once an IRS tax levy or federal tax lien has been issued against you, things get tricky. Negotiating with the IRS is tough once they’ve opened a direct route to your money. If you’ve already received an official IRS Notice you might need professional assistance with your tax debt. With a tax professional working on your side you have a better chance of being successful and getting your tax debt issues resolved once and for all.
It’s important you do not to ignore IRS back taxes for long. When IRS collection notices are ignored, the IRS has to resort to collecting from taxpayers by force. They do this with their dreaded IRS tax levy. By law, the Internal Revenue Service has the right to issue an IRS tax levy on you. This means it’s completely legal for the IRS to levy your bank accounts, issue wage garnishments, and even seize your assets in extreme cases.The most common IRS tax levy collection tools are the IRS bank levy and the IRS wage levy. If you receive notice from the IRS that either Tax Levy is going to be issued on you, you need to act fast. Your income and bank account funds are at stake and the matter is now extremely urgent! IRS Bank Levy: The IRS bank levy is an extremely harmful way to collect IRS back taxes. All of the money you scrimped and saved can be gone in and instant. Here’s what happens when the IRS Issues a bank levy:1. First, the IRS freezes your bank account.2. They give you 21 days to contact them and explain why you should receive the money. If you do not comply, the IRS will keep all of the money in your account for good.If you received a Notice of Intent to Levy from the IRS, it’s imperative to act fast and get your tax debt taken care of. It’s a smart idea to consider professional help at this point. Timing is crucial and a tax professional has a better chance of negotiating with the IRS and getting the bank levy removed in the short 21 day time frame. Remember that once the IRS seizes your account funds with the bank levy, you will not be able to get them back. IRS Wage Levy: The IRS wage levy is another brutal method used to collect IRS back taxes. It’s also known as wage garnishment. Basically, the IRS can take a percentage of your paycheck until your tax debt is paid in full, or until the statute of limitations on your tax debt expires. You do not want the IRS to seize money from your paycheck for years. Remember, they can seize up to 70% of your paycheck. It’s important to work fast to find a better solution for paying off your IRS back taxes. Stop the Bleeding: Your bank account and paycheck are being threatened. How do you stop the tax levies, and fast? You have to start by giving the IRS what they want. You have to make an arrangement to pay on your IRS back taxes. You can pay by settling your tax debt (for less than the full amount due) with an Offer in Compromise, or your can pay them monthly through what is called an Installment Agreement. Hiring Professional Help: Once an IRS tax levy or federal tax lien has been issued against you, things get tricky. Negotiating with the IRS is tough once they’ve opened a direct route to your money. If you’ve already received an official IRS Notice you might need professional assistance with your tax debt. With a tax professional working on your side you have a better chance of being successful and getting your tax debt issues resolved once and for all.
Liv Worthington has worked in the debt management field for many years. She also advises clients with IRS back taxes who are facing an IRS tax levy or bank levy and need a fast tax solution.
If IRS collection notices are ignored, the IRS is forced to collect from taxpayers by force. They do this with their dreaded IRS levy. By law, the IRS has the right to levy bank accounts (IRS bank levy), garnish your paychecks (IRS wage levy), or even seize your assets. But you do not have to let the IRS bully you or your family. There are ways to stop an IRS levy. The first step is to know the enemy.
IRS Bank Levy- The IRS bank levy is an extremely harmful way to collect tax debt. All of the money you scrimped and saved for can be gone in an instant. First, the IRS freezes your bank account. Then they give you 21 days to contact them and make some sort of payment arrangement. If you do not comply, the IRS will keep all of the money in your account permanently. If you received a Notice of Intent to Levy from the IRS, it’s imperative to act fast and get your tax debt taken care of. The freeze on your account from the IRS bank levy will cause issued checks to bounce, bank fees to be incurred, and will give you no access to pay your current obligations from your account. At this point, it’s a very wise idea to consider professional tax help for your IRS bank levy. A tax debt professional has a better chance of negotiating with the IRS to have an IRS bank levy removed in the short 21 day time limit. The IRS bank levy is an urgent issue meriting your full and immediate attention.
IRS Wage Levy – The IRS wage levy is another weapon in the IRS arsenal which is used to collect back tax debt. It’s also known as wage garnishment. The IRS can take a percentage of your paycheck until your tax debt is paid, or until the statute of limitations on your tax debt expires. Your employer is required by law to proceed with the IRS wage levy once the Notice to Withhold has been received from the IRS. They must use a mandated formula to determine “how much of your paycheck is to be garnished and sent directly to the IRS”. It is not unusual for a delinquent taxpayer to be left with 20%-25% of their “net paycheck” to live on, which obviously will not cover even basic living expenses. But there is help for this type of tax levy. There are two ways to stop an IRS wage levy. You can settle your tax debt and have it paid off, or you can have your account changed to a hardship or “Currently not Collectible” disposition. Because of the rapid financial damage that can be caused by an IRS wage levy, it is advisable to seek professional tax help.
Settling Tax Debt to Stop IRS Bank and Wage Levies – Settling your IRS tax debt is the fastest solution for stopping an IRS bank levy or an IRS wage levy. Once you are in the negotiation phase, the IRS levy will automatically stop. If your IRS settlement is approved, the IRS levy will actually be permanently “lifted” giving you complete relief from the tax debt problem!
Hiring Professional IRS Levy Help – It can be very hard to have your IRS tax debt settled when you fight against the IRS all on your own. Your chances of success are far greater if you can count on the help of reliable tax professionals that have experience dealing with the IRS’s complex procedures. If you are the victim of an IRS levy, then time is critical for you to minimize the financial destruction that is undoubtedly already occurring with your personal finances.
Liv Worthington has worked in the debt management field for many years. She also offers tax debt advice for IRS levy matters, especially IRS bank levy and IRS wage levy tax problems that require urgent attention..
1. Service tax authorities, of late, have been issuing notices to various borrowers of External Commercial Borrowings (ECB?s) from foreign branches of Indian banks and holding them liable to pay Service tax from September 10, 2004 under section 65(12)(a)(ix) of the Finance Act, 1994 which covers ECBs.
According to the borrower, the responsibility of paying service tax is of the service provider which is the foreign branch of the Indian bank and, hence, the Indian bank having a permanent establishment in India, is supposed to pay and not the borrower.
The contention of the service tax authorities is partially correct after coming into effect of section 66A of the Finance Act, 1994 from April 18, 2006.
Until the coming into effect of section 66A, the liability and obligation to pay service tax was that of Indian bank and not that of the borrower. Contrary to the contention of the service tax authorities, even under rule 2(1)(d)(iv) of the said Rules, effective from August 16, 2002 and June 16, 2005 respectively, the borrower cannot be made liable for the payment of service tax.
2. Rule 2(1)(d)(iv) reads as follows 
?Person liable for paying the service tax? means,?
(iv) in relation to any taxable service provided or to be provided by a person, who has established a business or has a fixed establishment from which the service is provided or to be provided, or has his permanent address or usual place of residence, in a country other than India, and such service provider does not have any office in India, the person who receives such service and has his place of business, fixed establishment, permanent address or, as the case may be, usual place of residence, in India.?
From the aforesaid provisions, it would be clear that until April 18, 2006, the requirement under rule 2(1)(d)(iv) was that only in case where the service provider did not have any office in India, the person receiving taxable service was liable for paying service tax involved. In the cited case, the Indian Bank having its registered and head office in India, and a branch in a foreign country cannot be said to be a service provider who did not have an office in India.
After coming into effect of section 66A, rule 2(1)(d)(iv), substituted with effect from April 18, 2006 by the Service Tax (Second Amendment) Rules, 2006, reads as follows
??Person liable for paying the service tax? means –
(iv) in relation to any taxable service provided or to be provided by any person from a country other than India and received by any person in India under section 66A of the Act, the recipient of such service;?
As such, until April 17, 2006, the borrower was not a ?person liable for paying service tax? within the meaning of the Act and the said Rules, including rule 2(1)(d)(iv) thereof.
It is relevant to note herein that the phrase ?does not have any office in India?, in rule 2(1)(d)(iv), stands omitted from the substituted rule. As such, with effect from April 18, 2006, in any case where the taxable service is provided or is to be provided by either a person who has established a business in a country other than India or has a fixed establishment from which the service is provided or is to be provided in a country other than India or has his permanent place or usual place of residence in a country other than India, the service recipient in India would be treated as if it has itself provided the service in India and, accordingly, it would be liable to pay the service tax and comply with all procedural and other requirements as specified in the Act and the said Rules. The respective clauses in section 66A (1) (a) are disjunctive and, hence, once any of the three alternatives contained therein are satisfied, the service recipient becomes liable to pay service tax on the taxable service involved.
Applying the aforesaid provision, since the service is being provided by foreign branch of an Indian Bank, the condition precedent laid down in section 66A(1)(a) is satisfied and, in the absence of the phrase ?does not have any office in India? in rule 2(1)(d)(iv), as recipient of the services, the borrowers would be liable to make payment of the service tax payable on the ?Banking and Other Financial Services?.
3. The fees paid or to be paid are liable to service tax under ?Banking and Other Financial Services? under the Act with effect from September 10, 2004. The liability to pay service tax for the period prior to April 18, 2006 would be that of Indian Bank and on and from April 18, 2006, would be that of the borrowers.
Qualify for an IRS Installment Agreement and Save Money by Negotiating the Lowest Possible Monthly Payments
IRS Announces Unprecedented Opportunity for Recession-Burdened Americans to Settle Outstanding Tax Debts
Struggling taxpayers may be eligible for tax breaks as the IRS eases enforcement and collection efforts to help Americans in financial distress. Because of the extraordinary challenges of today’s economy, the IRS is pledging to be more forgiving of Americans who have fallen behind on their taxes due to unusual financial hardship.
And one way you can settle your back taxes is by negotiating an Installment Agreement with the government that that allows you to pay liabilities over time.
If you cannot afford to make monthly payments and don’t qualify for another type of tax relief, such as an offer in compromise, there are other options including negotiating that your account be placed in a “currently not collectible” status so that you will not be required to make payments and the IRS will not pursue collection action.
What is an IRS Installment Agreement?
An Installment Agreement is a payment arrangement whereby the government allows a taxpayer to pay liabilities over time. Once a payment plan is established, the IRS will not take enforced collection action, including the levy of bank accounts or wages, as long as the taxpayer remains current with all filing and payment obligations. However, interest and penalties would continue to accrue until the outstanding balance is satisfied. Additionally, a tax lien may be filed as part of the terms of the installment payment agreement, depending on the amount of the total liability.
How to Negotiate an IRS Installment Agreement and Set Up a Payment Plan for Your Tax Debt
The IRS encourages taxpayers to pay what they owe as quickly as possible. For those individuals or businesses not able to resolve a tax debt immediately, an installment agreement can be a reasonable payment option. Installment agreements allow for the full payment of the tax debt in smaller, more manageable amounts.
In most cases, the IRS will accept some type of payment arrangement for past due taxes. In order to qualify for a payment plan with the IRS you must meet the following rules and provide the IRS with this information:
* You must have filed all tax returns (It’s OK to owe money but you must file).
* You will need to disclose all assets owned including all cash and bank accounts.
* You must not have adequate cash available in a checking, savings, money market, or brokerage account to pay the IRS.
* You must not have the capacity to borrow the amount owed to the IRS from other sources (i.e., a second mortgage on your home).
* You must not have adequate equity in a retirement account from which you can borrow or liquidate; for example, IRA’s or 401K’s.
The total dollar amount you owe usually dictates with whom the negotiations will be handled.
* Typically, IRS Revenue Officers are not involved in cases where the amounts owed are less than $25,000.
* The IRS will ask you to complete a personal financial statement and if a business is involved, you will also need a business financial statement.
* The IRS has determined allowable monthly expenses for individuals, which will be matched against your actual monthly expenses.
* The difference between your monthly income and your allowable monthly expenses will be the amount that the IRS will require you to pay on a monthly basis.
These monthly payments will continue until your outstanding tax liabilities are paid in full.
What the IRS May Not Tell You About Payment Plans
It is important to note that the IRS continues to add penalties and interest while you are making monthly payments. This may cause you to be paying what you consider a large monthly payment to the IRS and your outstanding balance may in fact be increasing due to additional penalties and interest.
The IRS may not explain this to you! So be careful!
Additionally, for taxpayers that enter into an installment agreement, the IRS may require a signed waiver to extend the time IRS can collect. While it is always in the best interest of the IRS to get a signed waiver, it may not be in the taxpayer’s best interest. If you are asked to sign a waiver, protect your rights, seek the advice of a tax resolution expert first.
The IRS in most cases, to protect their interest, will file a Notice of Federal Tax Lien, with the County Recorder’s office in the county you reside. This will inevitably be reflected on your credit report decimating your credit (FICO) score. In addition a recorded Federal Tax Lien means the IRS has a monetary interest (claim) against all real and personal property owned (at time of filing) and any and all real or personal property acquired in the future while the lien is in effect. Generally, the lien is effective throughout the 10 year Collection Statute of Limitations.
The Benefits of Hiring Professional Tax Representation to Negotiate your IRS Payment Plan
Whether the IRS demands full payment up-front or a payment plan that is substantially higher than what you can afford to pay, a professional tax resolution specialist can help you negotiate an arrangement for the lowest possible monthly payment and also provide you with various options for making those payments.
Additionally, if you owe more than $10,000 to the IRS, you will be required to provide full financial disclosure and you will need to hire specialized tax representation to negotiate on your behalf with the IRS.
IRS Pledges Greater Flexibility to Help Distressed Taxpayers
Although the IRS is pledging to be kinder and gentler to taxpayers in these challenging times, you will still need to meet your installment payment requirements. However, the IRS has announced that they will try to be more flexible with taxpayers who miss an installment payment.
“We need to ensure that we balance our responsibility to enforce the law with the economic realities facing many American citizens today,” IRS Commissioner Douglas Shulman said. “We want to go the extra mile to help taxpayers, especially those who’ve done the right thing in the past and are facing unusual hardships.”
If a taxpayer with an existing installment agreement is worried about missing a payment because of a job loss or other financial hardship, Shulman has assured the public that a missed payment will no longer lead to an automatic end to that agreement.
Additionally, the IRS has announced that it is more likely to forgive a missed payment and they’ve instructed staff to not automatically default someone who is having trouble.
Frequently Asked Questions about IRS Payment Plans
What do you have to do to be eligible for an installment agreement?
To be eligible for an installment agreement, all returns that are due must first be filed.
What are the payment terms?
Installment agreements generally require equal monthly payments. The amount of an installment payment will be based on the amount owed and on the taxpayer’s ability to pay that amount within the time legally available for the IRS to collect. By law, the IRS has the authority to collect outstanding federal taxes for ten years from the date of assessment.
What are the conditions of an installment agreement?
As a condition of an installment agreement, any refund due in a future year will be applied against the amount owed. Therefore, taxpayers may not get all of their refund if they owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support. The IRS will automatically apply the refund to the taxes owed. If the refund does not take care of the tax debt, then the installment agreement continues until all of the terms are met.
Does interest stop with an installment agreement?
Interest does not stop accruing until the entire obligation is paid. An installment agreement is more costly than paying all the taxes owed now. Penalties and interest continue to be charged on the unpaid portion of the debt throughout the duration of an installment agreement.
Are there fees to set up an installment agreement?
The IRS charges a user fee of $43 to set up the installment agreement. And it is possible for an installment agreement to be reinstated if the agreement defaults.
Also, installment agreements may be restructured to include additional amounts owed in one agreement. Reinstating or restructuring an existing installment agreement will cost an additional $24 user fee.
What are enforced collection actions?
Generally, IRS enforced collection actions (levy against personal or real property) are not made while an installment agreement request is being considered, or:
While an agreement is in effect,
* For 30 days after a request for an agreement has been rejected, and
* For any period while a timely appeal of the rejection or termination is being evaluated by the IRS.
Can my installment agreement be defaulted?
Yes. Failure to make timely payments can default the agreement. A defaulted installment agreement could subject a taxpayer’s account to enforced collection action and potentially have a negative effect on a taxpayer’s credit standing.
What is an annual statement of balance due?
In accordance with the law, installment agreement taxpayers receive an annual statement from the IRS. The statement provides the amount owed at the beginning of the statement period, the payments (credits) posted to account(s), any fees or assessments, and the ending balance. Currently, the annual statement is sent each year in July.
For more information on negotiating an IRS Installment Agreement or to get professional tax advice on reducing your IRS debt, visit www.taxresolution.com for a free tax relief consultation or call 866-477-7762.
Michael Rozbruch is one of the nation’s leading tax experts. A Certified Tax Resolution Specialist (CTRS), licensed CPA in the state of Maryland and the founder of Tax Resolution Services (http://www.taxresolution.com/), he helps individuals and small businesses solve their IRS problems and is dedicated to educating the public on tax planning and other strategies for managing their personal and business finances.
Michael Rozbruch is one of the nation’s leading tax experts. A Certified Tax Resolution Specialist (CTRS), licensed CPA and the founder of Tax Resolution Services. He helps individuals and small businesses solve their IRS problems and is dedicated to educating the public on tax planning and other strategies for managing their personal and business finances.
What happened? You’ve filed your taxes and you’re in trouble. Maybe you filed yourself or you went to one of those companies that file your taxes for your. After finishing everything you find out you owe money! You recheck your math and deductions once, twice, three times and…you really are in debt to the IRS! It’s understandable that you’re mad as hell or you want to start crying, but the IRS-Hitman has some advice.
Don’t panic…don’t ignore the debt, and do file the return. You can try to put off the debt by requesting an extension; October 15th is the latest you can put it off. This could give you a chance to come up with the money that you owe by then. But you do have to file, and the longer you wait the harder the debt will be to deal with.
Depending on how much you owe, you can try to deal with the IRS on your own, or you can seek professional tax help. The first thing you need to do however is to jump on the problem immediately! Do not wait.
Can I bury my head in the sand? I recommend against this. What happens if you wait? First of all the IRS starts sending you letters telling you how much you owe, and asks that you contact them to setup arrangements. If you don’t respond to the IRS then…well, things can get real bad real fast for you. The IRS can seize your wages, seize you bank account, or any other accounts you have. They can also put a levy on your home. That’s why taking immediate action is so important.
But wait… There are options available to you. You want to take action, but you have no way to pay the debt in full. Most people can’t pay their IRS debt in full, and usually it’s over $1,000. Not too many people have that kind of money lying around.
• Setup a payment plan with the IRS.
• Apply for an Offer in Compromise. This can reduce your debt to pennies on the dollar. Beware however, this is very difficult to get, and the IRS frequently denies applicants.
• Apply for Currently Not Collectible status. Again this is very difficult as you have to prove to the IRS that you are living at the bare minimum.
Choose wisely…However you choose to deal with your IRS tax debt is up to you. The key is to make a choice, and not to bury your head in the sand. Just because you don’t see an IRS-Hitman doesn’t mean he doesn’t have you in his sights.
Now you have the smoking gun…Use it!
Richard Close was an IRS-Hitman. He took out anyone who owed the IRS money as his father had before him. Now he helps thousands of Americans beat Uncle Sam and save thousands of dollars. Tax problems? Contact him and get free tips and techniques to deal with wage and bank seizures and slash tax debt: email at irs-hitman@taxdefensenetwork.com or call 1-888-248-9058. Visit http://irs-hitman.blogspot.com or www.taxdefensenetwork.com