South Carolina Tax Attorney

QUESTION:

    I set up an installment agreement a couple of weeks ago to pay off my tax liability.  I understand that it is going to take a while before my taxes are paid in full, but I thought once I set up the installment agreement, the IRS cannot come and try to levy my wages.  I just received an "Urgent" notice stating the IRS is going to levy my wages or bank accounts.  HELP!

ANSWER:

    You are correct.  Once you have an installment agreement set up, as long as it is valid, the IRS cannot levy your wages.  What I believe is going on in your case is that the IRS "machine" simply has not caught up with your installment agreement yet.  You hear this a lot about organizations as large as the IRS - "the right hand doesn’t know what the left hand is doing."  I think that is the case here.  You have an installment agreement, but the computers that issues the levy notices and other collection notices do not seem to catch up for a few weeks. 

    You should feel at ease knowing that as long as you are making your payments on time and you are current the IRS cannot levy your wages.  I would recommend that you send a letter back to the IRS office that sent you the collection notice and let them know you have already set up an installment agreement.  Remember to always send correspondence to the IRS by Certified Mail, Return Receipt Requested.  You should enclose a copy of the letter you received from the IRS confirming your installment agreement as proof.  You can also call the 800 number on the notice and speak with someone at the IRS. 

    Finally, as a disclaimer, I need to do my ethical duty as an attorney and let you know that this blog is meant to provide general tax and legal information and not specific information for your particular situation.  Before relying on any tax advice from this site, you should consult a competent tax professional to discuss the specifics of your case.