If you have unpaid tax debt, an IRS levy can be placed against your property, bank accounts, and wages. In some cases, you may request that the IRS release the levy. That the IRS releases a levy does not end or reduce your tax liability, and you’ll still owe the remaining balance.
When Will the IRS Release a Levy?
The IRS will only release a levy in certain circumstances:
- You paid the amount owed.
- Releasing the levy will allow you to pay your taxes.
- You entered into a payment agreement with the IRS.
- The value of the levied property is more than the amount owed, AND releasing the levy will not affect the IRS’s ability to collect.
- The levy imposes economic hardship (e.g., you cannot meet basic, reasonable living expenses).
- The IRS issued the levy after the period of collection ended.
You must show one of the above reasons when requesting a release of the levy.
Other Reasons for a Levy Release
In addition, the IRS may release a levy in other circumstances. If you filed for bankruptcy prior to the levy being issued, the levy was placed on the wrong person or entity, or you have a pending payment agreement or another compromise, the IRS will likely release the levy.
If the IRS Agrees to Release the Levy, How Long Will It Take?
The amount of time it can take to release a levy depends on the factors of the individual case. In complicated situations, it may take months to release a levy, whereas others may be resolved in a single phone call.
Appeals and Returns of Levied Proceeds
If the IRS denies your request to release the levy, you still have the chance to appeal. You may also request the return of levied proceeds if you can show:
- The IRS violated the law.
- The levy was premature.
- You have an installment agreement in place.
- Returning the payment will help another collection.
- Returning the payment is in your or the government’s best interests.
Other than when the IRS violated the law, the IRS has the discretion to determine when to return levied proceeds.
If the IRS has placed a levy on your property or wages, you can request a release of that levy. Remember that releasing a levy does not reduce the amount you owe. To find out how to get the IRS to release a levy against you, seek advice from experienced tax professionals. Contact Highland Tax Group to get started.