Welcome to First Response Resolution, LLC’s official blog! We are a specialty tax firm practicing right here near Medford in Southern Oregon. The focus of my practice is solving tax problems for individuals and businesses, IRS Representation of taxpayers, and representing taxpayers before their individual State Departments of Revenue. These services are referred to in many ways such as Tax Problem Resolution, Tax Relief Services, Tax Resolution, IRS Resolution, Tax Controversy, etc. Think of our firm as your Financial First Responders who specialize in saving troubled taxpayers. We help people who are struggling with tax problems get their lives back on track so they can focus on what matters most to them.
In this post we will continue the conversation on the various types of Tax Levies. We discussed Social Security Levies, Wage Levies (aka wage garnishments), Bank Levies, and touched on other assets that the IRS can seize to satisfy back taxes owed such as real estate, vehicles, boats, etc. There are a wide variety of Tax Levies, such as a Disqualified Employment Tax Levy (DETL), but many are beyond the scope of these blog posts. Levies can be automated, manual, paper, or systemic, depending on whether the Levy is issued through the Automated Levy Program, manually through the Integrated Collection System (ICS) by a Revenue Officer (RO), issued on paper with Form 668-A or 668-W by an RO, or initiated by ROs by preparing and issuing them through the ICS.
When facing the threat of a Levy, it is important to understand that choosing not to act will certainly result in having your funds or assets seized by the IRS. Once you face the realization that some form of action must be taken, you either come up with the cash to satisfy the debt to avoid or stop a Levy, or you request a Collection Alternative with the IRS. A Collection Alternative is simply an agreed upon plan to resolve the tax liability and can come in many forms. Most situations will warrant setting up some form of Installment Agreement with the IRS to pay the tax owed over time in amounts that you can afford. The Offer in Compromise (OIC) program could also be a great option for some taxpayers to settle their debt for less than they owe, however, even if a taxpayer qualifies for this option, there are circumstances where an OIC is not the best option for the taxpayer. We have seen scenarios where a taxpayer could absolutely qualify for an OIC but would actually be far better off employing an alternative strategy. Demonstrating hardship to the IRS to be deemed Currently Not Collectible can be a valuable tool. A thorough analysis of the options available in each taxpayer’s circumstance is critical.
Another concept to understand when dealing with a Tax Levy is that some property is exempt from Levy. Examples of the types of property that would not be subject to a Levy include: clothing and school books or supplies, household goods, arms for personal use, a certain amount of livestock and poultry (indexed for inflation), books and tools of the trade necessary for use in business (indexed for inflation), unemployment benefits, workers compensation, certain annuities and pension payments, judgements for the support of minor children, tools and equipment used for the production of income, and a portion of wages or salary required for certain allowable life expenses. When a Levy has taken or will take assets or funds that fall under these exemptions, taxpayers can either contact the IRS themselves or hire a professional such as a CPA, EA, or Attorney to present the argument to the government that these assets should be protected. A competent professional will also be able to navigate the process of negotiating a Collection Alternative with the IRS on your behalf and defend your rights as taxpayers. Not all practitioners who offer these services actually understand the complexity of the IRS Collection Procedures.
The IRS and taxes in general can be complicated and intimidating. If you have received IRS Notices regarding back taxes owed and are facing potential Tax Liens and Levies, it is well advised to seek competent representation when dealing with the IRS. Most people would not go to court and face litigation without an attorney, and it is in your best interest to engage a qualified representative to deal with the IRS on your behalf. If you or someone you know is in the midst of an IRS issue, contact me at either 541-293-8449, by email at zach@firstresponseirs.com, or through our website. We specialize in solving tax problems! We know how to defend taxpayer rights and will thoroughly investigate and evaluate your specific situation and consider ALL OPTIONS available to you. All discussions are kept strictly confidential, and we offer no obligation initial consultations of up to one hour.
Is your agency interested in having me speak to your team of realtors in person or over Zoom at one of your weekly sales meetings free of charge? I have a presentation developed to address the following:
- Taxation and your clients,
- Tax tips for saving on your own tax returns, and
- Tax Problem Solutions.
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