When you are filing your return, you may already have the horrid thought of the IRS. After all, they have a habit of picking up on something that will mean they get in-touch with you.
If you are already aware that you owe a tax balance, there are ways you can deal with that. This course of action will avoid any IRS levy
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How You Can Avoid an IRS Levy
There is one sure fire way you can avoid an IRS levy, and that is to reach an agreement with the IRS before any action is taken. You will need to ensure that you can afford any repayment agreement that you make. To ensure that this happens, you will need to go through your financial situation. Take some time to go through your income and expenditure. Consider what debts you may already have, and whom you require paying. You may need to restructure your existing debts to ensure that you can make a financial commitment to the IRS.
If you feel that you cannot do this alone, then you will need to get help from a tax professional. There are plenty to choose from. It is recommended that you choose a tax professional that can focus on the federal tax levy.
Another common solution to avoiding an IRS levy is to request an extension. The extension may give you the time you need to pay the balance in full. You can normally get up to 120 days for an extension. If you can pay within this time, you will avoid the levy altogether.
If an extension is no good for you, you could try requesting an instalment agreement. This instalment agreement allows you to make monthly payments against your balance. Over time, the balance will drop to zero. In the meantime, you have avoided a levy being issued against you.
You can request the IRS place your outstanding balance status on ‘currently not collectible.’ Of course, this is just a holding status. However, it allows you a little more time to come up with a solution that will ensure that the levy is not eventually issued.
The above agreements will only suspend levy action, rather than remove the threat of it altogether. Rest assured, providing you keep to the agreement that is set-up between yourself and the IRS, no levy will be issued.
There is an alternative to the above methods, and that comes in the form of the OIC. This collection alternative allows a compromise to be reached between the IRS and you, the taxpayer. The compromised amount can be less than what you owe, with the added incentive that it will suspend any levy action. The bad news is that OIC acceptance is quite rare. You will have to go above and beyond proving that you can only afford to pay less than the balance that is owed. This may mean producing a number of accounts, as well as personal information.
However, you decide to tackle a potential IRS levy, it all starts with opening a clear communications channel with the IRS. They can help you avoid a levy being issued.
