- Pay the total tax amount in full – Try to think of other ways you can pay if you don’t have the money. Some options you can consider are; take out a home equity loan, borrow from friends and family, have a yard sale, or see if you can sell some stuff on Ebay.
- Let the statute of limitations expire – Under normal [conditions the IRS has 10 years to collect the taxes owed since the day they were originally assessed. Once the 10 year period is up, the IRS no longer pursue you for collections and the levy will be released. Remember, if the IRS is hot on your case and they have not collected after 9 years, they will attempt to have you to extend the statute of limitations. They may try to word it differently and not tell you that this is what they are doing, but it is, so be careful what you sign if a lot of time has already passed. If you haven't paid the amount owed in 9 years, it is extremely unlikely they will be able to collect from you in the last year. Especially since by this time you can be considered an expert in avoiding the IRS.
- IRS payment plan, Installment Agreement – An installment agreement is a payment plan with the IRS. This plan will allow you to pay off the tax amounts owed over time. It is important to make timely payments on this once it is in place or the IRS can re-enforce the tax levy.
- IRS partial payment installment agreement – If you cannot make the minimum required payments for the installment agreement the IRS will consider you for a partial payment option. With this option you will be able to make smaller monthly payments and may actually never end up paying off the entire amount of back taxes owed. The IRS will review your financial standing every couple of years to see if you can pay off the taxes owed or be put on a normal installment agreement.
- Settle back taxes with an offer in compromise – Probably the most, very strict set of requirements. If your financial situation is so bad that they placed a levy, you can be a candidate though. The IRS only allows individuals to apply for this type of relief if they fall into one of three categories with strict requirements.
- Prove to the IRS it is not worth it for them to collect – When items the IRS is trying to levy have no value in them, you must prove to the IRS that that the levy would be pointless and it will not pay anything towards you back taxes owed.
- Prove to the Internal Revenue Service the Levy causes Economic Hardship –Prove to the Internal Revenue Service that with the levy placed on you, it doesn’t allow you to have the minimum amount of money to pay basic expenses. For example, if the IRS tries to seize your truck and this truck is required to make a living, you must prove this will create economic hardship.
- You can post a bond with the IRS – When you post a bond with the IRS, this proves to them that you will pay the amount owed and the levy will be released.
- Appeal the tax levy – You can appeal an IRS levy and you will have a review if the collectors followed the correct procedures, if they didn't, you may be able to get the levy lifted.
Getting a levy lifted can be difficult. It is advised that you use a tax attorney or CPA to assist you. Some of these methods above can be chancy to do without professional help because they can be considered fraud by trying to delay IRS collections if not done properly or in the right circumstances. An IRS levy can be financially overwhelming, the help of a tax relief professional can most likely save you much more money than their cost, while eliminating a lot of stress.