IRS Tax Lien

[howdidithappen]

I will be filing in the very near future. Two of my bank accounts were just hit for IRS tax liens - one yesterday and one today. Does anyone know how often the IRS will place a lien on my account? Will they try again tomorrow? How about the 1st of the month? I now have no money to live on for the rest of the month and of course some criticial bills that must be paid...

[coderdan]

There is a bigger problem, many banks will interpret the bank levy in one of two ways.

1) Your bank account and all of its funds are placed into a holding pattern for 21 days. After this time it is surrendered to the IRS. If you can file before that period, you generally can get your money released by the bank.
2) Many banks will also go that "extra step" and hold any funds coming in for 21 days. So if you had another pay check come in in say 5 days, they might get that too.

Your best bet is to speak with an attorney for a qualified legal opiniion.

[AngelinaCat]

Get on the telephone and call the IRS. If you keep them informed, they will work with you. We owed about 27k in back taxes and they sent a notice that they intended to levy our account. 'Hub made the phone call, and a payment plan was set up. We paid $450.00 for several months until we were ready to file Ch7. At that time the IRS suspended the payment plan until after we were Discharged. None of the back taxes were old enough to be included in the Discharge, *Sigh*.

Once we were Discharged, then with another phone call, 'Hub reestablished the payment plan, and we continued making payments of $450 a month. After several months, that proved burdensome, and we called and made arrangements to lower the payment to $250 per month. We are gradually whittling this down.

At every stage in the process, the IRS personnel have been pleasant and professional to deal with. We make our payments via an online web service.

Good luck to you.

[BKorbust]

I don't know what your tax situation is but I'm sure it was in the works for a bit of time before they levied your account. I'm in a similar situation and have been for several years. I owe somewhere in the range of 100K. In my opinion the key to dealing with the IRS is communication. I have liens and have received intent to levy notices. I even spent 5K on one of those stupid IRS law firm/settlement companies. What a complete waste of money that was. What I ended up doing is meeting with the IRS and laying all my cards on the table. I've been in non collectable status for 2 years now. It's nice to know they won't touch the little money I have for the time being.

I'll file BK later this year, eliminate 70% of my debt, deal with the liens, and get on a payment plan or OIC to deal with the rest. Just my .02 but you need to be proactive in dealing with the IRS. Good luck.

[justbroke]

The only thing I can say is...

Always, always, always cooperate and communicate with the IRS! (Unless you have some tax attorneys on retainer, and can "afford" that type of attorney.)

The only time that they levy accounts and attach liens is when you don't talk to them. They are extremely reasonable and it's quite easy to get a 60 month installment plan either online or over the phone. In this particular case, since they have already levied, you should call them and work something out!

Don't procrastinate and never ignore IRS notices.

(I will add that if your tax liability is significant -- over $10,000 -- or you believe that you don't owe the tax, you could seek a tax attorney to help you. However, know that this can cost thousands of dollars, but they can reduce liability in extreme cases.)

[howdidithappen]

Well, I filed on February 4th. The bank did release the $2400 to the IRS however on the 8th (At least I assume that's where my money went when it's says "savings withdrawal"- seems the bank should be more clear than that as to where that levied money went). I also received a summons to appear from the IRS when the levy was done. I am scheduled to appear tomorrow, 2/15. My BK lawyer told me that the bankruptcy stopped all that. I want to be sure it is not necessary for me to appear. I left a message for my lawyer to verify - who else can I speak with?

[justbroke]

The filing of the bankruptcy stayed your appearance. I'm assuming that this summons was to appear before some sort of taxpayer exam? You could call the number on the form and tell them that you filed and give them the information. I would have hoped your attorney would have called them already???

[minan]

We filed after the IRS issued a 2nd Levy. We had hired a firm to help us, however they did nothing. Although they were on file as the Atty of record, they claim they never received any notice to levy. Fired them and got a real tax atty, however the second levy was the final straw. We couldn't live like that - always fearing the IRS.

[justbroke]

Yes, some of those "tax attorney" things look like scams themselves. LOL

[howdidithappen]

A follow-up question on this matter - the IRS returned the funds that they levied after I filed - am I free to use those funds? My BK lawyer put done on my petition an amount less than 50% of what was levied. They also indicated a different bank balance (higher) on the day I filed. Why would they do this? I have asked but they will not give me an answer.

[howdidithappen]

Can someone help me here? My lawyer keeps telling me things are exempt - but it's my understanding there are few exemptions in NJ. I thought bank balances should be low on the day one files (mine truthfully was yet lawyer indicated much higher amount - paralegal at firm says it's exempt). What about returned funds from IRS? Thanks!

[SleepWellNow]

AngelinaCat and anyone on an IRS payment plan with more than $25K in taxes due: How difficult was it to set up a payment plan?

We are on a payment plan for back taxes at $400/month on about $19K. Since the amount was less than $25K, I was able to apply for the payment plan over the phone and it was quite easy to do. We have been current with our taxes due the last couple of years but, due to the loss of two homes in our BK, we owe an additional $25K in capital gains for 2010. I've read the IRS requires a detailed financial application for amounts over $25K and the IRS will determine how much we have to pay based on allowable expenses per Federal guidelines (which are very low). I'm really quite nervous about this. I definitely want to be pro-active with the IRS but I'd like an idea of what to expect. Thanks in advance for your help!

[disconapper]

I owe the IRS $23,432 and the State $4342, neither debt will go away with my Chapter 7, or at least that I know of. I was on a payment plan with both the State and the IRS until I lost my job. When I started working again, four months later, the State had a garnishment in place (I happened to go back to the same employer) and the IRS starting coming after me. I was sent a "Notice of Intent to Levy." What I ended up doing was filing a Form 911 with the Taxpayer Advocate Service. That is a request for immediate attention to your case due to financial hardship. I was assigned an Advocate then had to fill out a Form 433A, which is an explanation of my current financial situation. I also had to send in paystubs and bank statements. My Advocate stated that all collection activity was stopped once the 911 Form was sent it and documented as received. So currently, my account with the IRS is on hold, and it will continue to be on hold once I file the Chapter 7, however I intend to make re-payment arrangements with them so I can start paying as soon as I am discharged. As far as the State debt is concerned, they are still garnishing my wages at a whopping 25%, however, that garnishment will also stop once the Chapter 7 is filed. I have had absolutely no issues in dealing with the IRS, they have been extremely pleasant. I was expecting a nightmare, but it was quite the opposite. As far as the State is concerned, I haven't started communicating with them. My State's Comptroller Division is a tangled web of phone calls etc. I'd rather get the Chapter 7 filed and then start working out that debt.