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Business IRS Levy Help in NYC

Understanding What a Tax Levy Means for Your Business

The IRS has several techniques for recovering debt that taxpayers owe. One of the most common ways is tax levies. If the federal agency levies your property, it seizes (takes) its ownership until you pay the amount in full.

By reading this article, you will understand the tax levy process and how to get professional business IRS levy help in NYC.

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What is a Business Levy?

business levy is a legal procedure the IRS and local governments use to collect the debt you owe.

The IRS only takes action if you ignore the notices including, a ‘notice and demand for payment’ and a ‘final notice of intent to levy,’ and you’ve failed to make arrangements to repay your tax debt. The IRS uses common strategies such as:

  • Bank Levy – The IRS can require your bank to freeze your business account (could be money for rent, expenses or payroll) for 21 days and then the bank must forward the funds you owe to the IRS.
    • Note: You have 21 days to resolve your tax problems. Once the time has elapsed, and the funds are sent to the IRS, your chances of recovering it reduce significantly
  • Accounts Receivable Levy – The IRS will send letters to your customers, instructing them to divert their payments to them directly instead of paying your business. This can significantly taint your company’s reputation and affect your income. Also, your customers may continue paying even after the tax authority removes the levy since they don’t have an updated status.
  • Seizure of Assets and Property – The federal tax agency can seize your company’s assets such as the business investment accounts, credit lines and cash value, company equipment and cars, etc.

IRS Tax Levy vs. IRS Tax Lien

Levy and lien are collections the IRS uses to recoup the amount owed by taxpayers. In the case of an IRS tax lien, the federal agency has a claim on your property. An IRS tax levyon the other hand, is the actual seizing of your property. It is highly advised that you seek professional business IRS levy help in NYC to navigate the process to best preserve your assets and square away your debt owed to the IRS.

8 Options to Prevent or Stop an IRS Tax Levy

If you’ve received notices from the IRS about your debt, you can act fast and avoid the tax levies. If the levy is already in place, you can get the IRS to lift it if you know what to do. Here are some of the common options of preventing or removing a business IRS tax levy in New York:

1. Pay in Full or Request an Installment Payment

Paying your debt in full is the easiest way to avoid a levy. If you’re unable to pay the debt in full, you can contact the federal agency and request for an installment agreement.

If your application is approved, you’ll pay your tax debt in installments. The IRS still levies your property; they will only relinquish their claim until you repay the amount you owe in full.

2. Settle the Tax Debt for Less than the Full Amount You Owe

An offer in compromise (OIC) allows you to resolve the debt for less than what you owe. However, the tax authority has to accept your arrangement.

3.    Filing an Appeal

As a taxpayer, you have up to 30 days from the date of a notice to act. Once you have made a formal appeal, the tax authority will not levy your property or assets until a decision is made regarding your current situation.

You’ll appeal by filling and submitting IRS form 9423. The IRS may reverse its decision if it results in difficult financial situations.

4. Certain Debts Are Not Legally Enforceable

The statute of limitations states the tax authority has 10 years to collect the tax you owe. Once the time has elapsed, the amount is absolved. This argument can help you get the IRS to reverse the levy, and you’ll not have to repay if your debt falls outside of the statute of limitations.

5. Negotiating for Lower Penalties

The added IRS penalties on your back taxes can quickly increase the debt amount. Luckily, the IRS can abate or forgive penalties through its various IRS penalty abatement programs.

6. Extension of Time to Pay Back Taxes

If you can’t pay in full right now and you need additional time to pay, you should request a one-time payment extension. It allows you to pay your back taxes in full within 120 days though the penalties and interest still accrue until the total amount is paid.

7. Qualify for Currently Not Collectible

If you show the IRS that you’ve little or no money left after paying the essential business expenses such as rent, payroll, and supplies, you may qualify for a deferral. In this case, you are placed in Currently Not Collectible (CNC), the tax authority holds off from collecting the debt.

8. Filing Bankruptcy

If you owe the IRS and you see no option of paying back taxes, filing for bankruptcy can be a feasible option. Even if you file for bankruptcy, some of the federal agency may not wipe out the tax you.

Need Business IRS Levy Help in NYC?

At True Resolve Tax Professionals, we work with you to resolve your tax issues and to put an end to your tax problems so you can move forward with your business.

As Enrolled Agents, we have in-depth knowledge of the business IRS tax levy process, and we will use different strategies to help you stop or prevent future business tax problems. Contact our tax professionals for business IRS levy help in NYC today by calling 716-634-6200 or booking a tax consultation online.

Call today to speak with one of our Licensed Tax Experts 716-634-6200