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Stop a Tax Levy | IRS Levy Help | Flat Fee Tax Service

Updated: Nov 22, 2019

The Top Ways to Remove an IRS Levy 1. Pay the Tax Debt in Full  - The most effective way to get a tax levy released is to pay what you owe to the IRS in full. If you have the financial means, you should pay the obligation in full, and make sure your account with the IRS has a zero balance.

If you are here, reading our material, you probably can't pay your tax debt in full. So, let's continue.  

Paying off a tax debt in full can be difficult to do when you owe hundreds or thousands of dollars. Rather than risk a levy on any of your assets like your bank account, house, or vehicle, you may want to use other methods to get the levy released quickly. 

2. Appeal the Tax Levy  - You have 30 days from the time the IRS notifies you of its intent to levy an asset to make a formal appeal. The appeal temporarily stops the levy from being enacted until a decision is made on your tax situation. 

To file a formal appeal, you must complete and submit the IRS form 9423, which can be found on IRS.gov. Appealing a levy can be a relatively straightforward process. However, it is no guarantee that the IRS will reverse its decision to levy your assets.  

Still, if you can prove the levy would create extreme financial difficulties for you, you should go ahead and file an appeal. The appeal could also uncover irregularities in the tax debt collection process that would compel the IRS to reverse its intent to levy your assets.


3. Request an Installment Agreement  - When the IRS levies your assets, it will not relinquish its claim until the tax debt is satisfied. Rather than wait for months or years before this happens, you could have the levy released quickly by requesting an installment agreement with which to pay off your debt. 

An installment agreement lets you make regular monthly payments on the obligation. The payments are based on how much money you make, which ensures they are affordable and practical. The agreement also releases the levy on your property.  

4. Make an Offer in Compromise - When you cannot realistically pay off your full tax debt, you may be able to settle it with an Offer in Compromise. An Offer in Compromise (OIC) lets you resolve your debt for less than what you really owe. The IRS forgives the remaining portion of the debt if it accepts your OIC.  

Your settlement offer must be realistic and reflect the value of your current income and assets. Once your IRS tax settlement is accepted, you have a limited opportunity to pay this lower amount and bring your IRS account to a zero balance. The tax levy against your property will then be released.


5. Apply for the Fresh Start Program - The IRS offers the Fresh Start Program for people with tax debts of $25,000 or less. To qualify for this program, you must: 

a. Owe $25,000 or less in back taxes

b. Agree to have payments automatically deducted from your bank account

c. Have made three consecutive installment agreement payments and not be in default

d. Be in compliance with all of your tax return filings

e. Be current on all of your estimated tax payments

Once you are accepted into the Fresh Start Program, the IRS will file the Form 109169(c) with your local county office. To apply for this program, you must fill out and submit IRS form 12277. You also should notify all three credit bureaus about your participation in the program after your application is approved.  

6. Wait Out the Statute of Limitations  - The IRS has 10 years in which to collect on a debt you owe. If it is nearing the end of that 10 years, you could possibly wait for the statute of limitations to expire. 

Once the 10 years is up, your debt is automatically absolved. You do not have to make any payments on the debt after that time limit is up.  

7. Make a Case for Financial Hardship - When an IRS tax levy would create severe monetary difficulties for you and your household, you can make a case for financial hardship with the IRS. The IRS must leave you with enough money with which to pay your immediate household expenses. 

If you can prove that you would not be able to do so with a levy in place, you could make a claim of financial hardship and have the IRS release the tax levy. Making the claim may require you to provide financial documents like bank statements and pay stubs.

8. Prove Your Assets Have No Equity 

The primary reason that the IRS uses levies is to liquidate the property if necessary to recoup some or all of the money people owe to it. When your assets have no monetary value, however, you could prove to the IRS that they are not worth selling.  

If you can establish that your assets have no equity, you may be able to get the tax levy released. Making this case might require you to provide bank statements showing the balances in checking, savings, or retirement accounts. You also may need to provide appraisal statements for the assets showing they are not worth anything.  

9. Ask for a Partial Payment Agreement - If you cannot pay off what you owe even with an installment agreement, you could settle the debt in a more affordable manner by asking for a partial payment agreement. A partial payment agreement is reserved for taxpayers who would experience physical or financial challenges with a regular installment agreement. The partial agreement would let you make reduced payments on your tax debt each month, thereby allowing you to avoid financial strain while satisfying what you owe to the IRS. 

I am Dave Rosa. It is my responsibility, my duty and my pleasure to provide you with the information necessary to make an informed decision.

Our conversation will take 20 to 30 minutes. By the end of our consultation, you will know what your options are and have a realistic idea how best to resolve your tax debt problem.

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