An “account freeze” or bank levy can be intimidating, and it can happen to the best of us when we fall behind on our tax obligations. Fortunately, there are structures in place that can help you circumvent the issue and get access back to your vital finances.
The IRS usually only institutes bank levies after someone who owes back taxes hasn’t responded to notices to provide payment. Many times, these individuals have an inability to pay in full, which is frequently all they need to indicate in order to get the levy released.
However, proving financial hardship is not exactly easy, especially without the right professional help.
Instant Tax Solutions can provide you with guidance on all of your options for getting a bank levy removed, including proving a hardship. Call (888) 485-8109 to schedule a no-obligation consultation to discuss your current situation with an experienced tax relief professional near you.
How Can I Access a Boise Tax Levy Release?
How do tax levies happen? Well, more easily than you might imagine.
Let’s say that you’re an average, hardworking taxpayer in Boise. You diligently file your taxes every year, but this year, an unexpected emergency spend — think sudden home repairs, a car accident, or illness in the family — has left you unable to pay your tax bill in full.
Any time there is non-payment, the IRS will send a letter out a few weeks after the deadline. After the filer has failed to respond or pay, they will receive further notices and warnings that the IRS may take actions to collect on the debt.
One of the last resorts they will defer to is to take over the filer’s accounts. They then have the option to begin drawing from the account after a certain period has passed, usually 28 days.
Importantly, a tax levy is not merely a demand for payment but instead more akin to a ‘freeze’ or ‘seizure’ of the assets held in your name or in the name of a larger organization. In essence, it grants the IRS the authority to withdraw funds from these accounts at its discretion.
Now, facing a tax levy might seem like a dire situation, but there’s a silver lining: Tax Levy Release. A release can act as a lifeline and potentially offer you the much-needed relief you’re looking for in this situation.
But how can you access this relief? Well, below, we’ll break the process down into simple terms and actionable next steps.
That said, the easiest way to streamline your way to a tax levy release is to simply reach out to our team. Our Boise tax lawyers can review the specifics of your situation and help you choose the best service, option, or repayment plan — and help you prepare for next year’s tax season so you can avoid any future hangups as well.
In simple terms, a tax levy release is like hitting the pause button on the IRS’s financial grip. It’s an agreement, often negotiated between the taxpayer and the IRS, that paves the way for the filer to access their own funds like usual once more.
A release can occur when the taxpayer makes an agreement to repay the debt under certain conditions or when the IRS acknowledges that the levy would impose an unreasonable economic hardship.
What Are the Differences Between Levies and Liens?
While many users have heard about liens, levies are different and often considered more serious. The IRS defines the distinction as, “A lien is a legal claim against your property to secure payment of your tax debt, while a levy actually takes the property to satisfy the tax debt.”
So, essentially, a lien gives the IRS a sense of security. It ensures that they have a legal right to the taxpayer’s assets until their tax debt is fully paid.
It also prevents the person who owes money from freely transferring or selling the property without the IRS obtaining some of the proceeds. Further, with a tax lien, the IRS doesn’t immediately seize the taxpayer’s property; instead, it essentially places a ‘hold’ on the property that signals the IRS’s interest in your assets.
A tax levy, on the other hand, is a much more aggressive action. With a tax levy, the IRS will actually seize (or confiscate) your property or assets.
This act may involve seizing bank accounts, wages, real estate, or other assets. The IRS can use levies to claim the taxpayer’s property, use the funds or proceeds of the sale, and apply them directly to the tax debt.
As a result, a tax levy is more likely to immediately affect your day-to-day. It can prevent you from working, providing for your family, or simply surviving — which can be terrifying — but it also paves the way for a Boise tax levy release.
Common Conditions for a Levy Release
While a tax levy can seem like an insurmountable hurdle, the IRS will consider releasing the levy under a few key conditions.
First, the simplest path to a levy release is to arrange to pay the amount of tax debt you owe. Once you settle your tax liability, the IRS will typically release the levy. It’s a simple — but often unrealistic — way to put an end to the IRS’s collection efforts.
If you make arrangements to begin an installment plan or have an offer in compromise accepted, a levy will also usually be released.
Alternatively, in some cases, the IRS will have a limited timeframe within which it can collect tax debt. If this collection period, often referred to as the Collection Statute Expiration Date (CSED), has expired before the levy was issued, the IRS may release the levy.
Finally, one of the most significant considerations for the IRS will be whether the levy has created an unreasonable economic hardship for you.
Economic hardship means that the levy’s enforcement prevents you from meeting basic, reasonable living expenses. If you can demonstrate to the IRS that the levy jeopardizes your ability to cover necessities like housing, utilities, food, and transportation, they may opt to release the levy.
They may also release the levy if you can somehow prove that the levy makes it even harder to begin paying down your debt, such as if you need the funds to cover basic overhead and labor costs to keep a business running, thereby earning income that could be used towards taxes.
How to Request a Levy Release for Reasons of Hardship
If you believe that the tax levy has created an unreasonable economic hardship for you, you may want to request a levy release — but how do you do so? Here’s a step-by-step guide on how to initiate this process:
1. Contact the IRS Immediately
The first — and most crucial — step is to get in touch with the IRS as soon as possible. You can contact the IRS by phone, mail, or, in some cases, by visiting a local IRS office.
Be prepared to provide your tax identification number and any other relevant information about your case.
2. Explain Your Economic Hardship
When you get ahold of the IRS, you’ll need to explain (in detail) how the tax levy has created an unreasonable economic hardship for you. Make sure to clearly articulate your financial situation so you can emphasize how the levy has prevented you from meeting your basic living expenses.
Provide account statements, receipts, and anything else needed to put numbers to the claims you are making. Explain clearly and in detail how the levy has affected your ability to pay for housing, utilities, food, and transportation.
The more compelling — and well-documented — your case is, the stronger your request for a bank levy release will be.
The preparation and know-how required during this step is why many people who owe back taxes depend on our professionals at Instant Tax Solutions. We are accustomed to the IRS’ processes and what information they expect in order to make a decision.
3. Provide Supporting Documentation
As noted, strong documentation will strengthen your case. So, gather key paperwork like bank statements, pay stubs, rent or mortgage statements, utility bills, and any other relevant financial records you can find.
4. Negotiate a Repayment Plan
In situations where the IRS denies your hardship claims (and you are unable to win an appeal), the IRS will consider releasing the levy if you propose a viable repayment plan. So, if you can show that you are actively working on resolving your tax debt, it may influence their decision.
Know that it will always be to your advantage to work with an experienced tax expert during this process. Our team can help you gather and prepare the necessary documentation and review your situation to choose a repayment plan that makes sense but doesn’t strain your day-to-day spending beyond your means.
Alternatives to a Bank Levy Release
In addition to filing for a traditional tax levy release, you can also take advantage of a few other alternatives designed to help you regain control of your financial situation.
For example, you may choose to pursue an Offer in Compromise (OIC). An Offer in Compromise is an IRS program that allows eligible taxpayers to settle their tax debt for less than the total amount they owe.
Similar to the levy release process outlined above, qualifying for an OIC will mean demonstrating that paying the full tax debt would cause you unreasonable financial hardship.
Additionally, you can also file for an OIC if you have a legitimate dispute with the amount you owe. Otherwise, if you’re unable to pay your tax debt in one lump sum or series of quick payments, an installment plan can also provide relief.
With an installment plan, you can make regular monthly payments over time until the IRS agrees that your debt is fully paid. The terms of the plan are negotiable, so you can find a payment schedule that fits your financial situation, and you are able to request to modify the plan at any time.
Penalty abatement can also help those who have seen penalties and interest significantly inflate their tax debt. If you’re eligible, penalty abatement can mean having some of your penalties (and the associated interest) removed from your tax debt.
Finally, an amended tax return may be all you need to shave a huge sum off your tax debt in the event that overlooked deductions, or credits resulted in a higher tax liability than was necessary. By filing an amended return (within three years of the original filing due date), you can potentially reduce the total tax debt you owe.
Let Us Help You With the Boise Bank Levy Process
At Instant Tax Solutions, we know that a tax levy is nothing to take lightly. That said, we’ve also helped countless taxpayers secure the release or relief they need, and we can help you do the same.
So, if you’re struggling to deal with the consequences of a sudden tax levy or are unsure of what relief you might qualify for, reach out to our team today. We’re here to help you navigate the situation from top to bottom and can help you prepare for a better financial future going forward.
So call (888) 485-8109 or contact us online to schedule a no-obligation consultation to discuss your current situation with an experienced tax relief professional near you.
