As embarrassing as it is to admit, at this point in time I have been
unable to pay back taxes I've owed since tax year 2007.
I had previously contacted the IRS and worked out a monthly payment
schedule, but I've fallen behind on bills, and my business has been
suffering greatly. And for the past 5 months I have been unable to pay
anything. Today in the mail I received IRS Form 8519, Levy of my bank
account. Is that it? Am I officially screwed with no income for me and
my family to survive since the IRS is taking everything? Is it too
late for me to try and negotiate a reduced monthly payment?
Please any and all thoughts are greatly appreciated.
No!! You are not a hopeless case. IMMEDIATELY, call the number
shown on your letter. Tell your story and ask them to stop the levy.
In my experience, I have never known them to deny that kind of
request. You have options and the agent will help you as much as
possible. You may even be able to make an offer in compromise, likely
with the help of a tax professional, to reduce your obligation.
I often listen to a radio that heavily advertises services to deal with
the IRS. The advertisers claim to be able to be able to wipe out most of
the tax debt. They claim that they have the expertise to deal with the
IRS while the IRS will tear the unaided taxpayer to shreds.
Impression of the IRS is not all that bad. My guess is that if you try
to deal rationally with the IRS, you will be treated rationally by the
IRS. But I never owed large amounts of tax or was in other forms of deep
I am curious however, do these services perform a legitimate
representation or are they just another scam?
.?Let the buyer beware!!=:)
Back in 2004, IRS Commissioner Mark Everson issued this caveat:
?We are increasingly concerned about unscrupulous promoters charging
excessive fees to taxpayers who have no chance of meeting the
program?s requirements,? ?We urge taxpayers not to be duped by high-
If one believes one might qualify, it would be best to consult a local
preparer who is familiar with the process, who can study the
individual case, and who will give an honest appraisal with regards to
The statistics, I've observed, indicate that only about 25% of Offers
in Compromise are successful.
I have had luck with having the IRS determine my clients in a "currently not
collectible" status. This stops all leins and levies, and they stop sending
you collection notices. You would still owe the taxes, and the interest
would continue to acrue however if you remain on this status long enough,
the statute of limitations continues to run, and the IRS will no longer be
able to collect it.
To have the IRS consider you "Currently not Collectible", you must fill in a
shortened 433 form (433-F)which shows your income and expenses and an
installment agreement form 9465 showing a $0 installment due to the
calculations on the 433. Before I did any of this, I would call the IRS at
the number on the latest letter and ask them how best to qualify for this
status. It may be that your current installment agreement will cause an
If approved, periodically, the IRS will re visit your status to see if you
are more capable of paying, but this is merely refilling the forms for
current conditions. You should have an Enrolled Agent or other professional
help you with this process, but it is significantly more likely than a Offer
in compromise, which are approved less than 30% of the time, if recent press
clippings are correct.
best of luck
Not sure how much amount is under dispute, and financial hardship you
are in... but one website that might give u an opinion on options
available to you is taxlifeboat.org
STOP! CALL AND SEE A LOCAL TAX PRO, preferably an Enrolled Agent. EAs are
tax representation specialists by definition.
There are two kinds of levies - Static & Dynamic.
A static levy is sent to banks with instructions to hold all monies in the
identified account, notify you, and give you a period of time to resolve the
matter. If you don't resolve the matter and get a release from the IRS the
bank has no choice but to send whatever money was in your account at the
time the levy was received to the IRS.
Please read that last paragraph AGAIN, then read it a third time.
Bank levies are STATIC Levies - the attach to the money IN THE ACCOUNT WHEN
THE BANK GETS THE LEVY, AND NOTHING MORE. So if you had $50 in the account
on Tuesday, when the bank opened the letter and put the hold on your
account, then on Wednesday you deposited $250 MILLION in Lottery Winnings,
the bank CAN ONLY send the IRS the $50 was in the account when they got the
levy notice - NOTHING MORE.
Dynamic levies are different - these are sent to PAYORS, usually employers
but they can be sent to others who pay you regularly. Typically, if your a
contractor or subcontractor of some sort, the IRS will look for 1099s issued
to whomever they are issuing the levy against and send them a levy notice
that says "forward ALL future payments to ABC Co. to us until EITHER you've
sent us $x,xxx.00 Dollars OR until we tell you to stop." These levies go on
and on and the IRS intercepts ALL monies being paid you to now and in the
You NEED to meet with a tax professional who specializes in Taxpayer
Representation. This may be a CPA, but not all CPAs do tax work. EAs, by
definition, are taxpayer representatives. BUT not all EAs represent all
kinds of taxpayers. You'll need to make some calls and ask some questions.
- the National Association of Enrolled Agents.
Their web site has a link where you can search for EAs in your area.
Someone needs to work with the IRS on your behalf - NO ONE should try to
handle the IRS for their own case (remember the old axiom "an attorney who
represents himself as a fool for a client."). We can't handle our own
cases, we're too close, we think emotionally and not logically and we're
tempted to say more than we should, which almost always hurts us long term.
It simply is NOT a good idea to deal with the IRS yourself - at least not
without talking to a pro first.
You may be able to get on Uncollectible Status, you may qualify for an Offer
In Compromise, you may be able to renegotiate your installment agreement.
There are even ways to get payroll trust fund taxes resolved. BUT the
average person has NO IDEA where to even start. You NEED professional help
and you need it sooner rather than later.
Gene E. Utterback, EA, RFC, ABA