Having money removed from your bank account or your paycheck by IRS is not entirely new. This money is called ‘levy’ when it is removed from your bank account, and ‘wage garnishment’ if from your paycheck. When this happens, there are ways to go about it. You can ask the IRS to remove the levy, but you would need to enter into a payment agreement with the IRS or settle all your outstanding back taxes.
Paying the outstanding back taxes is not always possible, thus forcing you to settle for the payment plan agreement option. However, people looking to go for the payment plan agreement option are always worried about how long to complete the paperwork and have the IRS release the removed levy/garnishment or stop removing fresh charges.
The IRS will release your levy/garnishment immediately, once you have entered into simple payment agreements
This will be possible if you haven’t secured a payment extension prior to the agreements. An extension request, when granted, could give you an additional 120 days. However, if you are being levied, the longest extension you can get to sort the balance, pay down the balance, or enter into payment agreement is just 60 days.
If your extension to pay is granted, proceed to demand the immediate release of your levy/garnishment. You can also request that your employer/bank/payer be furnished with the levy release when speaking to the IRS representative.
This means an immediate release of your levy/garnishment release can be arranged with the IRS, once you have met the terms of the extension-to-pay agreement.
Another way to push for an instant levy release is to call the IRS and ask for a simple monthly payment plan or a streamlined installment agreement. You can finetune and finalize the agreement on the phone with the IRS representative, while the levy release is faxed to your employer/payer/banker immediately.
In the case of a bank levy, the funds will undergo a 21-day freezing period in the bank before it is remitted to the IRS. Hence, you should try to remediate the problem as soon as possible by getting in touch with one of our tax experts, from here, we can set up an agreement as soon as possible. The bank levy will be released, and subsequently, your funds once you complete the simplified installment agreement or secure an extension to pay.
Complex payment agreements may delay the release of your levy by months
There are instances where the simplified installment agreement and the extension to pay will not work. Hence, the next move will be to request a more complex installment from the IRS. For this, the IRS will demand a lot of documentation on your financial situation to determine your qualification status. This, obviously, takes longer.
The same documentation conditions apply if you prefer one of IRS’ special programs designed for individuals with financial challenges. These programs include Offer In Compromise or Settlement, and Currently Not Collectible Status or Deferred Payment.
In either of these agreements, applicants must identify financial hardship as the main reason for demanding the release of the levy due. However, the levy will stay in place until the IRS completes the processing of the paperwork involved in the agreement. Most times, the IRS omits the request for release of the levy part in the agreement. Hence, be sure to demand the release of the levy once the agreement has been set up successfully. The ideal way of entering into an agreement with the IRS is via phone. Also, always provide follow-up documents immediately if there is a need for them.
If you are not ready to face the hassles involved in the rather complex process, a better option will be to work with our tax team. Our in-house tax-experts can help you to identify the best payment agreement for your case and file a request for levy release on your behalf at the IRS.
