How to Stop IRS Tax Levies

Before levying, the IRS sends you notices of your balance due, including interest and penalties. If you fail to pay the debt, the IRS can place a levy on your car or home, your wages and bank accounts or other assets. Fortunately, there are ways you can stop IRS tax levies. 

1. Contact the IRS promptly. If there is an IRS levy on your assets, it's probably because there was a breakdown in communication. The IRS typically sends notices by mail to the parties involved about a levy at least 30 days prior to enforcing the levy. Visit the IRS website at www.irs.gov or call them at 1-800-829-1040 to discuss payment options.


2. Agree to an installment payment plan. Agree to pay a specified amount each month, based on your income, to the IRS until the debt is cleared. In most cases, this is what it takes to stop a levy from being placed on your assets. Send the IRS your documents such as utilities and rent, along with your bank statements to prove your current income. They require these documents in order to make a payment arrangement.


3. Find out if there is IRS levy on your bank account. Contact your bank to find out if the IRS has already placed a levy on your bank account. Banks are required by law to enforce IRS levy. However, if you agree on a payment plan with the IRS, a representative of the IRS can send a release form to your bank notifying your bank that the levy placed on your bank account has been lifted. So, provide the IRS with the bank manager's name, phone number and fax number. Check with your bank manager to be sure he or she has been authorized to lift the levy that was placed on your account.


4. File an appeal on your tax debt. To completely stop a tax levy, you have the option to appeal that debt. File your appeal within 30 days of being notified of the levy. Follow the instructions provided on the levy notice you received.


5. Monitor the status updates of your case. Whether you filed an appeal or made a payment arrangement, be sure to get status updates frequently. Make your payments in a tmely manner, and never be late or miss any payments. Contact the IRS office in your area to get updates on the appeal you filed, if you have not received response after three months.