Bank Account Frozen by the IRS? Act Fast! Get Your Money Back.

A Bank Account freeze always happens at the most inconvient time.

It's embarrassing, especially when you're checking out at the grocery store, your $150 worth of groceries already bagged and a long line behind you.

Or worse, when you're trying to pay your utility bills and the funds just aren't there.

If you owe the IRS, you need to pay attention to the warning signs to prevent a Bank Levy from happening to you.

Expect It If You Owe: If you know you owe the IRS and have not contacted the IRS to fix your issue, just know a Bank Levy is never out of the question.

A freeze on your bank account may be the first sign that you owe, because sometimes IRS Notices won't reach you and the IRS will use a freeze on your account to get your attention instead.

It Goes From a Freeze to Seizure: First, the bank freezes all the funds available in your account on the day that the levy is issued and sets them aside. After 21 days, the bank sends those funds plus any interest that may have accrued to the IRS. If you do not contact the IRS before the 21-Day Deadline and make a strong case about needing that money, your funds are gone for good. 

Look Out for the "Final Notice": Any notice from the IRS is reason for you to stand at attention and solve your issue. The "Final Notice of Intent to Levy" notice is particularly noteworthy. After that, your paycheck and bank account are fair game for the IRS.

Find a Solution for Your Tax Debt: The final lesson here is that you cannot dodge the IRS. If you owe and have not been levied, the IRS will find you and levy you eventually.

There's no way to escape your tax debt, so work with a professional to find a solution instead of running away.

Will My Fiancé Inherit my Tax Debt if we Get Married?

Tax debt and marriage just don't mix. That's the theme of today's Reader Question.

Sometimes a spouse or an ex-spouse is to blame for tax debt.

Other times, a fiancé doesn't want to drag their future spouse into tax debt with them.

Alias Jackie asks:

"If I get re-married although I am making payments to IRS, can they seize or come after my new husband's income and property?"

To keep this one short, sweet, and to-the-point, allow me to be brutally honest. Get into a tax resolution before getting married! That means paying it in full or getting into an official payment plan with the IRS.

When you marry someone you potentially marry their tax debt. It's not guaranteed that the IRS will go after your future spouse's income and property, but it's always a risk if you are not in an official agreement with the IRS.

You want to start married out life right. If you can't find a path to resolve your tax debt issues, consider working with professional help to get your tax debt behind you and your happy married life in front of you.

Why Would the IRS Freeze Your Bank Account Without a Warning?

I received the subject line of this post verbatim as a question the other day.

We'll call the sender Susan.

It does seem like the IRS will freeze your bank account suddenly and without warning.

Don't take this hyper-literally. Let me explain the process a little more. Here's what I sent back to Susan:

Susan,

When a Taxpayer owes the IRS they are sent numerous notices requesting timely payment of the past due tax bill. When the IRS’s “Final Notice of Intent to Levy” goes ignored, the IRS has no choice but to “wake up” the taxpayer and get them to repay their debt by force by freezing the funds in their bank account.

The IRS does not depend on this method for collections. After all, for most people the IRS only needs to freeze and seize funds from their bank account once- after that they’ll catch-on and pay the IRS or stop putting funds in their bank account.

The IRS doesn’t automatically start seizing wages (which they are also allowed to do) or funds from the bank account with reckless abandonment. Taxpayers receive ample warning first. The IRS would prefer the amount was simply paid instead of reaching into bank accounts and paychecks.

I hope that answers your question. Were you wondering why the IRS would do this, or what they would have the authority to do this? Are you facing a bank levy issue of your own?

I hope this answers your questions, too. Remember, you still have a chance to get your funds back when your bank account is frozen by the IRS. Work before the 21 day deadline expires and hire a professional to help you succeed at getting your money back!

Stopping an IRS Tax Levy: Give the IRS What They Want

Your heart stopped when you a received a letter from the IRS via certified mail.

It may have informed you about your impending Tax Levy, and your mind is racing with questions.

Will they go after your paycheck? Your bank account? Will all your savings be gone in a flash?

This post will help you prevent a Tax Levy and put your tax debt behind you for good.


They IRS sent me Notice of Intent to Levy! What do I do?

Don't worry, there's still hope. The IRS should not levy you if you get proactive about your situation and find a way to repay them.

Don't wait for the IRS to levy you. have a higher chance of being able to set your own payment terms if you act first and work with a professional to set up one of the following agreements:

IRS Installment Agreement: And Installment Agreement allows you to repay the IRS is set monthly installments. The IRS gathers the details on your financial situation and sets the amount you pay monthly based on what they think you can afford.

IRS Offer in Compromise: When you hear a late night TV commercial talk about settling your tax debt for pennies on the dollar, this is what they’re talking about. This program sounds almost too good to be true. It is real, but it is also the most difficult to get. Only 2% of applicants for an Offer even get approved.

Currently Non Collectible: "Currently Non Collectible" is a status used by the IRS when a taxpayer has no way to repay their tax debt. This is temporary suspension of collection efforts that allows the taxpayer to get their financial situation in order.

Innocent Spouse Relief: Typically, when your spouse owes the IRS, so do you! But in some cases, the IRS may forgive your portion of the Tax Debt through Innocent Spouse Relief. It's not easy to meet the criteria for Innocent Spouse, but it might be worth a try.

IRS Penalty Abatement: In cases where the debt was caused by circumstances you couldn't control (like a long hospital stay or a natural disaster) the IRS may remove penalties from your account, making it easier for you to repay your tax debt.

Powerful IRS Negotiations: My sincere recommendation is for you to get on the phone with a professional as soon as you receive a Notice of Intent to Levy from the IRS. You can negotiation from a position of power and set up the payment terms you want when you work with a pro.

Can't Pay the IRS in Full? 3 Tips for Reducing IRS Tax Debt

You owe the IRS a fortune, but it wasn't always like this.


It's the IRS penalties and interest that are dragging you down.


You can't pay in full, but fortunately, there are ways to reduce what you owe the IRS...


It won't be easy, but it doesn't hurt to try the 3 Tips for Reducing IRS Tax Debt listed below when you have no other options.


1) IRS Penalty Abatement: When you get in debt to the IRS interest and penalties start adding on to your debt immediately.

Do You Qualify?: If you’ve suffered a catastrophic event in your life and this caused you to owe the IRS, you may qualify to have the penalties removed from your debt. 

2) Innocent Spouse Relief: Normally if you marry someone you also marry their tax debt. However there are exceptions to the rules, and you can get out of a debt created by your ex-spouse.

Do You Qualify?: You may qualify for relief from a spouse or ex spouse's debt if you didn't file jointly, if you didn't know about the debt, or if you were facing a severe hardship situation.

3) Currently Non Collectible: This doesn't  necessarily reduce the amount you owe, but it's the perfect solution if you current cannot aforrd to pay the IRS.

Do You Qualify?: This is only granted for those who cannot pay for basic living necessities and the IRS at the same time. The IRS will temporarily suspend collection activities and resume them when you're able to make payments.

Strengthening Your Chances: You have to put up a fight to get the IRS to stop collections or reduce the amount owed. Make sure you go in ready, have plenty of documentation to substantiate your claims.

On Tax Debt Settlements: A Tax Debt Settlement is known as an "Offer in Compromise". I don't like to endorse this method to resolve Tax Debt because the IRS almost never approves an offer! Applying for an offer is a lengthy process that's best left to a professional!

3 Tips to Choosing Quality IRS Tax Debt Help

When you owe the IRS, every offer for help looks appealing.

One commercial offers a plan that will settle your tax debt for "Pennies on the Dollar."

Another advertisement promises to reduce your tax debt to "Zero!"

Unfortunately, the IRS doesn't work this way. These promises are pipe dreams, and the reality of tax debt isn't as easy to swallow.

It's difficult to resolve your debt, and  you should work with a professional. Just make sure you choose the right kind. One that will really provide you help, not one that will take your money and run! Below are 3 tips for choosing quality IRS Tax Debt Help:

1. Steer Clear of Retainer Fees: Any company says the words "Retainer" or "Retainer Fee" is only interested in your money. A retainer fee is a fee that "holds the services until an actual agreement is made." This means a company can "change their mind" and charge you more down the line!

2. The Ole' Bait and Switch: Some companies come up with fees that are hidden somewhere in the mumbo jumbo contracts. Here's a classic example, say a company told you they were going to help you with your tax debt for $2000 dollars. But when you get the contract it says $3,000 dollars because there's a $1,000 "convenience charge"!

3. No Refunds? No Go!: Some companies don't offer a refund policy, and it makes you wonder...why? If the company doesn't offer a refund policy of some kind, you need to work with someone else.

The bottom line is that you want a company you can trust. Your tax debt issues are a priority, and you should make sure to work with the best quality company you can find. Work with a company with a good track record and check their ratings with the BBB and Dun and Bradstreet.

IRS Bank Levy Sudden Strike? Get Your Money Back!

You ignored the IRS's “Final Notice of Intent to Levy" and the IRS swooped in for the kill.

If your bank account was suddenly emptied, don't fret, you might have time to get your money back.

Stop it in its tracks: Once you get that Final Notice in the mail, the IRS is going for the funds unless you take action.

Find a tax professional to help you contact the IRS ASAP, because the IRS likes to go for the sneak attack. You won't know when the Bank Levy will hit!

Once it's already hit: If the IRS has already cleaned you out, you might be able to get your funds back if you act quickly.

The only real way you can get those funds back is if you're in a real hardship situation. You would have to prove you need those funds to pay for vital bills.

This won't be easy, so make sure you have plenty of documents to substantiate your claim.

Preventing Future Bank Levies: A Bank Levy is a "wake up call" to get you to face your debt, and I'm not going to lie, as a Revenue Officer I loved using them. They're effective!

So now that you're wide awake and aware of your tax debt issue, take the next step and work with someone to resolve it. It's not going to go away on its own!

Can't Pay the IRS? Repaying IRS Tax Debt on Your Terms

You're caught, you received notice via certified mail from the IRS.

You know you owe and you do want to pay.

But when you count sky-high penalties and interest you just don't have it...


You might have tried to tell this to the IRS, but if it's anything like I remember it, they don't care. They just want to know how you're going to repay your back taxes in full.

Your assigned IRS Agent might be holding out on you. They may not be telling you have the option to take care of your debt with monthly payments. There are options for you, even if you can't repay the IRS in full.

Payments and the IRS: They Make the Rules

You can lock yourself into an agreement known as an "Installment Agreement" to repay the IRS monthly. Unfortunately, there are a few catches. The IRS set the payment rules, not you.

You Don't Set the Payment Amount with the IRS

When you owe a credit card debt, you can pay a minimum amount every month. The IRS play that game. The IRS determines how much you'll pay, and you're not going to like what they ask for. You'll be required to provide a Full Financial Disclosure, letting the tax man know how you spend every cent you earn.

From here, the IRS will determine your "allowable" expenses (in a way, telling you how to spend your money) and set the amount you will pay them from there.

IRS Interest Continues to Accrue

Interest will continue to accrue on your debt as you repay the IRS with an Installment Agreement, to the tune of 25% in a given year. Depending on the debt owed, and the amount of your payments, it might feel like your debt's not going down.

The IRS Will Ask for More

If your pay increases, the IRS will increase your installment payment amounts when they find out. Sorry, but your hard-earned raise might go right into the governments hands before you even get to see it.

But You Want to Spend Your Money Your Way...

You and the IRS are bound to disagree on which of your expenses are "allowable". According to the IRS, expenses like other creditors and private school tuition don't count. When it's time to set up a payment arrangement with the IRS, be prepared to roll up your sleeves and fight to get the arrangement you want.

The Smoking Gun: It's harder to change your payment amount when you've already negotiated with the IRS. I highly recommend working with a professional before you call the IRS and give them the full disclosure on your financial situation.

A professional can determine if you qualify for a program that keeps the IRS from knowing all of your personal expenditures, allowing you to negotiate from a better position.

The 10 Year IRS Statute of Limitations: How Long Can the IRS Collect From You?

You're trapped in a tax debt you don't want.

The interest and penalties continue to add up; there's no way out.

You might be tempted to wait until the statute of limitations on this debt expires, but wait...the IRS has 10 long years to collect from you!

And there's more bad news, the IRS may be able to collect from you even after those 10 years have passed!

Dispelling the rumors: That's right, the IRS can resume collection efforts even after you've owed them for a decade. Let me tell you what to avoid if you don't want to keep paying the IRS for 11, 12, 13 years or more!

Extending the IRS statute of limitations: Certain actions could extend the IRS's statute of limitations, allowing them to collect on your tax debt for years to come.

This is why it's so important to consult with a professional before you try any of the solutions for your tax debt listed below. You're doing the right thing trying to resolve your tax debt, but if you make the wrong move you could end up owning more, or owing for many years to come!


The following may extend the Statute of Limitations on your Tax Debt:

-Chapter 7 and Chapter 14 Bankruptcy

-Filing An Offer in Compromise

-Being in litigation with the IRS

-Requesting a Collection Due Process Hearing

-Filing a Federal Lawsuit

-Signing a Waiver for the IRS

The general rule of thumb is this; any action that puts your IRS Case on hold may extend the IRS Statute of Limitations. Otherwise, the IRS is losing years to collect "their" money!

Be careful when working with the IRS, do your research to ensure you select the plan that will work for you the first time. Re-submit an offer or apply for another way to pay and you could be giving the IRS more years to collect from you!

Should I Use a Bank Loan to Get Rid of my IRS Tax Debt?

There's no end in sight. When you're locked into an unaffordable Installment Agreement with the IRS, you can pay on tax debt for years and feel like you're never making headway.

You're paying on time, but with the interest your debt just keeps growing out of control. 




You want to know, will using a Bank Loan help you get ahead and get rid of your IRS Tax Debt?


A few things to consider regarding that:

1.)Once you are making payments on a bank loan, you are locked into that monthly payment. If your income dramatically stops, lowering those payments or stopping payments can greatly hurt your credit score.

2.)If you are in an unaffordable Installment Agreement, you are in the wrong one. A tax professional can help you find one that will easily work in your budget. If your income changes, you can change the amount you pay to the IRS WITHOUT having to ruin your credit. If you are unable to make any payments to the IRS, you can even be placed into a Currently Not Collectible status. They may put a lien on you, while in this status. However, it wouldn't even come close to the damage stopping payments on a bank loan would cause.

3.) If you already have a lien on your credit score, you may have difficulty finding a bank loan to pay off your tax debt with payments you can afford. Remember, many IRS Installment Agreements are based off of what you can afford. Bank loan payments are based on what they need from you to pay your loan off in their time frame.


Still need help? If you need help finding an Installment Agreement that will work for your life and budget, give me a call at 1-888-415-1337 or fill out the form to the right!

Save Your Funds: Declaring Financial Hardship to the IRS

You just can't pay the IRS. You want to stop the tax man from breathing down your neck, but you don't have one red cent to pay toward your tax debt. If you have no way to pay the IRS, it's up to you to declare Financial Hardship to temporarily hault collection efforts.


Try Currently Not Collectible (CNC) to Stop IRS Collections
The IRS cannot pressure you into a payment arrangement that would cause you to go without basic necessary living expenses. If there's no way you could both pay the IRS and pay for your necessities, you'll probably qualify for Currently Not Collectible (CNC) status.

Basic Needs Include:

• Rent/Mortgage Payments
• Food Expenses
• Utilities
• Gas/Transportation
• Medical Bills/Expenses
• Basic Clothing

Credit card payments, private school tuition, and other "luxuries" don't count. Not to mention the fact that you can't go over the National Standards for your basic needs without the IRS questioning your spending.

Don't see this as an opening to get out of paying the IRS. Currently Not Collectible (CNC) status is for people that are truly in need.

Who Qualifies for Currently Not Collectible Status (CNC)?

According to a Report issued by the IRS on January 6, 2009, IRS employees will have greater authority to suspend collection actions in certain hardship cases where taxpayers are unable to pay. This includes:

• Taxpayers that have recently become unemployed
• Taxpayers that rely on Social Security or Welfare Income
• Taxpayers facing devastating illness or significant medical bills

Remember, This is Temporary

Currently Not Collectible status is not a permanent solution for solving your Tax Debt. Your case will be reactivated if there are any indications that your financial situation has improved.

Don't Let Your Case Be Denied

IRS collection efforts continue to increase exponentially every year. The IRS is cracking down on those who owe, and it's harder to get approved for Currently Not Collectible than it was before. Consider working with a professional to increase you chances of being approved for CNC status with the IRS. 

Getting Paid Under the Table: Will the IRS Find You?

Juggling tax responsibilities as a freelancer is a unqiue challenge. Shortcuts, "Handshake Deals" and "Under the Table" payments temp you. You think you'll get away with it, but watch out!

The IRS looks for these deals, and they'll bring the hammer down hard when you get caught!


Setting the Record Straight

When I talk about "handshake deals" and "under the table" payments, Im not talking about paying a neighborhood kid $50 bucks to help with the yard work.

I'm talking about doing work that would normally be a couple thousand dollars for a bartering of services, or giving a friend a special price and not reporting those earnings on your form 1099 when it's time to file.


The IRS Wants it All!

The IRS wants you to report every amount you earn and spend as a business or as a freelancer/independent contractor. If the IRS finds out you've been doing lots of work "under the table" (not reporting your earnings) you'll get slammed with an audit, fines, or worse!

Think about it... Even if you take away the possibility of the IRS breathing down your neck, you're really not helping each other when you make these "handshake deals". If you do work for someone under the table then you can't report it on your taxes as income. Your friend can't report it on his 1099 as a deduction for business expenses.

The IRS-Hitman's "Under the Table" Quick Fix

I have a solution that takes care of this problem. You'll be able to work out deals with fellow small business owners/independent contractors without incurring the IRS's wrath. 

Bartering is a form of paying for goods and services, so it should be reported to the IRS. The next time you barter one good or service for another, draw up a contract.

State the terms just as you would any other business transaction. This way you both report your income correctly, and you will be able to claim the value of the "payment" as deductions. Everyone wins!

Remember: Report every cent you earn to the IRS if you don't want to owe the IRS back taxes!