Understanding How to Stop an IRS Tax Levy


Most people end up in a state of panic when facing an IRS tax levy, as the possible repercussions are not limited to their bank accounts or wages. When a taxpayer receives a tax levy notice from the IRS, it is possible that the IRS may even freeze their assets. The IRS is legally authorised to hold on to your assets and your bank funds if you neglect or fail to pay your taxes. Thankfully, there is still hope. So, if you have been wondering, ‘how to stop an IRS tax levy’, this blog post is for you. Read on.

Requesting a CDP Hearing

Appealing for the Collection Due Process (CDP) hearing is the most common way to delay the seizure of your assets by IRS. You get a month to request a CDP hearing and once the period is over, there is nothing you can do to stop IRS. Requesting a CDP hearing doesn’t mean you will have a hearing in a tax court within 30 days; it’s just a time frame to apply. The CDP form is to contain of all your information and the reason(s) to stop the levy.


Paying the Debt in Full

If you are in a position to pay the tax debt in full, do not procrastinate.  People facing an IRS levy notice often seek financial help from their friends or family or liquidate some of their holdings to pay the debt. To pay the debt in full, you can also consider taking a personal loan that it would have lower interest than the IRS penalty and interest. Make sure to raise as much money as possible to minimize the debt.

Requesting an Installment Agreement

An installment agreement gives taxpayers the liberty to pay their taxes in monthly installments. Under an Installment Agreement, you have to pay debt over the period within 7 years, or before the Collection Statute Expiration Date, the date after which the IRS has no authority to exercise any collection efforts. When requesting an installment agreement, make sure you would have a source of assured income to pay the installments. Many people choose to take personal loans, as the annual interest rate in installment agreements ranges from 6 to 12 percent and compounds on a daily basis.


Declaring CNC Status

Many taxpayers are in no position to pay their tax debt, and collecting taxes from them will only worsen their financial hardships. In such cases, the taxpayers can request for a CNC (Currently Non Collectible) status that pauses all collection efforts of the IRS. To request CNC status, you need to carefully outline of your financial situation and provide supporting documents. When processing CNC requests, the IRS considers various factors such as the applicant’s income, necessary expenses, savings, assets and other financial aspects.

Looking for IRS Levy Help? Speak with Us!

While this blog post should be enough to help you understand some of the various ways to stop an IRS tax levy, the IRS tax law is a complex maze  which calls for the in depth knowledge of a tax professional. If you are up against an IRS tax levy or any other IRS tax debt related problem, contact the Law Offices of Nick Nemeth. For a FREE no-obligation consultation, or fill out our contact form or simply call (972) 484-0829.