The IRS Plans to Increase Tax Levy "Machine" from Fresh Start Tax

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The Internal Revenue Service issues approximately 3.7 million Federal Tax Levies on bank accounts and wage garnishments to taxpayers each year. According to Fresh Start Tax's Michael Sullivan, a former IRS agent, "A single telephone call to the IRS can stop a Federal Tax Levy."

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Intent to Levy

Michael Sullivan says,"The IRS uses the Federal Tax Levy because it acts like a wake up call - it gets the immediate attention and response from the taxpayer."

Taxpayers should be aware that in order to increase and enforce tax compliance, the IRS has included an additional $200 million in the IRS Budget Proposal for 2013. This would provide the IRS additional with further resources to perform more tax audits and collection programs that will generate approximately 1.1 billion in additional revenue by 2015.The Internal Revenue Service ("IRS") collects billions of dollars through its number one collection tool, the Federal Tax Levy. This is the largest source of revenue for the IRS. In 2011, over 3.7 million Federal Tax Levies and over 1 million Federal Tax Liens were placed on taxpayers according to the IRS Report "The Enforcement and Service Results FY2011". This process not only wipes out bank accounts, but it can completely destroy consumer credit scores and ratings.  

Michael Sullivan says,"The IRS uses the Federal Tax Levy because it acts like a wake up call - it gets the immediate attention and response from the taxpayer.  As a general rule, most taxpayers who receive a levy, also have 3 years of unfiled tax returns with balances due."

The IRS does not have to look hard to find levy sources. Those sources are right there in their CADE (Customer Account Data Engine) computer system though W-2 and 1099 income matches from third party employers and financial institutions. Everything is generated automatically from the computer, not by IRS Agents.

"Believe it or not, the IRS does not want to send out tax levies. Many times, these Collection Notices are sent because the taxpayer leaves them no choice. Taxpayers who owe taxes or have not filed tax returns usually refuse to respond to Collection Notices or phone calls from the IRS," says Sullivan.

So what should a taxpayer do if they have received IRS Notices? Call the IRS or a tax professional immediately.

Once a taxpayer or their representative contacts the IRS and makes a genuine effort to resolve the case, the IRS will take the case out of the CADE Enforcement Computer and settle the case with the taxpayer.

What type of settlements are available to taxpayers? The IRS has 3 general ways to settle tax cases....

Installment Agreement
Offer in Compromise

The type of settlement is determined by a fully documented financial statement that is completed by the taxpayer. This financial statement is designed to establish the level of ability the taxpayer has in paying their debt to the IRS.

When people receive an IRS notice or phone call, don't delay. Contact them immediately or enlist the help of a professional.

Fresh Start Tax is a professional tax resolution firm. On staff are Board Certified Tax Attorneys, CPAs, and Former IRS Agents, Managers and Instructors. We have over 206 years of professional tax experience and over 60 years of direct IRS experience. To learn more about Fresh Start Tax, LLC, please visit or call us at (866)700-1040.

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Kelly Hadlock
Fresh Start Tax, LLC
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