QUESTION:
My paycheck is currently being levied by the IRS and it is extremely difficult for me to pay the bills. I want to go ahead and do something so they will release it, but I know I cannot pay all of the taxes and penalties the IRS says I owe. Can I still negotiate with the IRS after I get a wage levy or is it too late?
ANSWER:
It is never too late to negotiate with the IRS. Things just get much more urgent when you have a wage levy because it is almost impossible (if not completely impossible) to live on the amount of money the IRS leaves you. The fastest way to have the IRS release the levy would of course be to pay the debt in full, but since you cannot do that you would need to negotiate an installment agreement, or payment plan, with the IRS. Once the IRS has agreed to give you an installment agreement they will release the wage levy, but it will get slapped back on you if you ever miss a payment.
This does not prevent you from negotiating an offer in compromise with the IRS to try to settle your tax liability for a lower amount. If you did not want to set up a monthly payment plan, you could request an offer in compromise. Once that has been submitted you could request that the IRS refrain from levying you until a determination has been made regarding your offer in compromise.
I would encourage you to speak with a tax professional about an installment agreement or an offer in compromise because they work with the IRS everyday and will know how and where they can work to save you money and get you the best deal.
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