As a former IRS Agent and Instructor, I am asked all the time how and where does the IRS get their tax levy information? The answer is very simple and may surprise you. It comes from you. Yes, you usually give them your own tax levy information. The IRS does little to have to find it.
There is a one-time fee of $105 when a taxpayer enters into an agreement unless they choose to pay through a direct debit, in which case the fee is reduced to $52. Also if a taxpayer qualifies with income at or below 250% of the Department of Health and Human Services poverty guidelines they may apply for a reduced fee of $43. Taxpayers may apply for this reduced fee using form 13844 Application for Reduced User Fee for Installment Agreements. Taxpayers must remember that even if this is granted interest and penalties will still accrue until the tax owed is paid in full.
An offer must meet certain financial criteria in order to be approved. Simply stated the offer must show that the taxpayer's net assets and future disposable income are not enough to pay the full debt. If that is the case and there are no conditions that will lead the IRS to believe that the situation will change, then the likelihood of an approved offer is greater.
They may also request an agreement when filing their return by attaching either form 9465 Installment Agreement Request or by simply attaching a written request for a payment plan to the front of the return. If the taxpayer did not request an installment agreement when they filed their return and they receive a bill from the IRS, they may still request one using the Online Payment Agreement (OPA) application at the IRS website. They also may request one by submitting either form 9465 Installment Agreement Request or by attaching a written request for a payment plan to the front of the bill and returning to the IRS.
There is still yet another option to request a payment plan and that is to call the toll-free number on the bill. The IRS will respond to a request usually within 30 days as to whether it has been approved or denied. The taxpayer must specify how much they can pay each month and on which day they wish to make that payment. The IRS will expect to receive the payment on the day specified so the taxpayer must make sure they account for mailing time. It is also advisable that the taxpayer choose an amount that is realistic and will not cause them to miss or make late payments. There are a number of options available for payment and they include: * Direct debit from a bank account * Payment via check or money order * Payment by credit card via phone or internet * Payment by Electronic Federal Tax Payment System (EFTPS) * Payment by Online Payment Agreement (OPA) * Payroll deduction from your employer
As a condition of an installment agreement any refund due to the taxpayer on future returns will be applied against the tax due owed amount. Once an agreement is in effect it is important for the taxpayer to make timely and consistent payments and remain in compliance with future filings.
Missing payments, making late payments or being out of compliance with future returns may cause the taxpayer to be in default of the agreement resulting in the filing of a Notice of Federal Tax Lien or other IRS collection activity. Also there are fees if an installment agreement is modified, reinstated or restructured so it is important to honor the terms of that agreement.
The IRS can also get Tax Levy information from your credit report. This provides a wealth of information and a field day for the IRS. If your case goes to the field for a Revenue Officer to work, your credit report becomes a harvest for the Agent. Lastly and contrary to popular belief, the IRS does not dragnet the banks. They do not have the time or the resources to do that on most cases. They will do that only on high profile, very large dollar, jeopardy and drug cases.
There is a one-time fee of $105 when a taxpayer enters into an agreement unless they choose to pay through a direct debit, in which case the fee is reduced to $52. Also if a taxpayer qualifies with income at or below 250% of the Department of Health and Human Services poverty guidelines they may apply for a reduced fee of $43. Taxpayers may apply for this reduced fee using form 13844 Application for Reduced User Fee for Installment Agreements. Taxpayers must remember that even if this is granted interest and penalties will still accrue until the tax owed is paid in full.
An offer must meet certain financial criteria in order to be approved. Simply stated the offer must show that the taxpayer's net assets and future disposable income are not enough to pay the full debt. If that is the case and there are no conditions that will lead the IRS to believe that the situation will change, then the likelihood of an approved offer is greater.
They may also request an agreement when filing their return by attaching either form 9465 Installment Agreement Request or by simply attaching a written request for a payment plan to the front of the return. If the taxpayer did not request an installment agreement when they filed their return and they receive a bill from the IRS, they may still request one using the Online Payment Agreement (OPA) application at the IRS website. They also may request one by submitting either form 9465 Installment Agreement Request or by attaching a written request for a payment plan to the front of the bill and returning to the IRS.
There is still yet another option to request a payment plan and that is to call the toll-free number on the bill. The IRS will respond to a request usually within 30 days as to whether it has been approved or denied. The taxpayer must specify how much they can pay each month and on which day they wish to make that payment. The IRS will expect to receive the payment on the day specified so the taxpayer must make sure they account for mailing time. It is also advisable that the taxpayer choose an amount that is realistic and will not cause them to miss or make late payments. There are a number of options available for payment and they include: * Direct debit from a bank account * Payment via check or money order * Payment by credit card via phone or internet * Payment by Electronic Federal Tax Payment System (EFTPS) * Payment by Online Payment Agreement (OPA) * Payroll deduction from your employer
As a condition of an installment agreement any refund due to the taxpayer on future returns will be applied against the tax due owed amount. Once an agreement is in effect it is important for the taxpayer to make timely and consistent payments and remain in compliance with future filings.
Missing payments, making late payments or being out of compliance with future returns may cause the taxpayer to be in default of the agreement resulting in the filing of a Notice of Federal Tax Lien or other IRS collection activity. Also there are fees if an installment agreement is modified, reinstated or restructured so it is important to honor the terms of that agreement.
The IRS can also get Tax Levy information from your credit report. This provides a wealth of information and a field day for the IRS. If your case goes to the field for a Revenue Officer to work, your credit report becomes a harvest for the Agent. Lastly and contrary to popular belief, the IRS does not dragnet the banks. They do not have the time or the resources to do that on most cases. They will do that only on high profile, very large dollar, jeopardy and drug cases.
About the Author:
Harris Smith runs the home equity line of credit website. Don't Miss Out! Claiming that Debt Consolidation will not show on the credit report is another tactic used by non-genuine debt relief companies.