Dec 1, 2007

IRS Debt - A Wage Levy - When will it go away?

An IRS levy on your wages (Form 668(W)) is crippling (to see how much you will get on a levy you can compute on this link). Furthermore, it stays there until one of the following happens:

1. The tax liability is paid in full (i.e. the amount of the levy ceiling is paid)
2. You enter into an agreement to pay (i.e. an installment agreement) or convince the IRS through a financial disclosure (i.e. Form 433A/B and or F and supporting documentation) that you are not collectible (referred to as “CNC” or “Currently not collectible” status)
3. You get the tax abated (either by successfully filing an amended return, an offer in compromise, or other abatement method)
4. You show the IRS you have a true hardship that a levy is compounding

Unfortunately, most people believe they fall into #4- not by IRS standards. Many require #2 or #3 or eventually succumb to #1.

Getting through this maze is difficult. Also, what are your options. In short, the options can be summarized into about 21 different options.

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