Will an offer in compromise stop a garnishment on your wages or the levy of your bank accounts? It is a question that comes up often. The answer can be found both in federal tax law and in tax regulations written by the department of the treasury.
Under federal tax regulations – and I am quoting here – “The IRS will not levy against the property or rights to property of a taxpayer who submits an offer to compromise during the period the offer is pending.”
Once the IRS decides that your offer is processable, that it includes all the paperwork and forms properly filled out, then it must stop levy actions under section 6331 of the Internal Revenue Code. However, if the offer is missing documents or forms, the IRS can return it to you as un-processable and can then levy or garnish your property.
Once the IRS fully evaluates and accepts your offer it will not levy your property but you will, of course, be expected to live up to the terms of your offer.
If your offer is declined, you have thirty days to appeal that decision under federal law. The good news is that the IRS will not levy your property during that thirty day period. Also, if your original offer is declined and you make a good faith revision to that offer then the IRS will not levy during the period that the revised offer is pending. However, if the IRS decides that an offer is not in good faith but that you are sending them just to cause delay, they will immediately return the offer to you and can then levy your property at any time.
It is important that any offer you make to resolve your tax debt be made in good faith and one that you intend to honor fully and completely. If you do so, you can eliminate the debt and stop any levy activity against you. It will take effort, commitment and persistence, but if you are serious and want to reclaim your life, you can do it.
Law Office of Arthur Weiss, P.C.
2135 Grant Rd.
Tucson, AZ 85719
520-319-1124
https://artweisslaw.com