Answer

Let me give you the facts about Offers in Compromise. The IRS compromises tax liabilities in three circumstance:

 

1 Doubt as to liability - If there is a genuine dispute about the existence or amount of the tax due the IRS might compromises the tax liabilities. The taxpayer must included a detailed argument of their position on Form 656-L.

 

2 Doubt as to collectibility - The taxpayer cannot pay the full amount due and meet basic living expenses. An acceptable offer must be the maximum amount the taxpayer can pay after allowance for basic living expenses, calculated as follows:

 

Realizable value of the taxpayer's assets (80% of fair market value)

Plus future income

Less allowance for basic living expenses

 

3 Effective tax administration - Collection would create a significant economic hardship or exceptional circumstances make collection unfair or inequitable.

 

You can stop the wage levy by entering into an installment agreement. Call the Taxpayer Advocate Help Line at XXX-XXX-XXXX and tell the agent that the wage levy has created a significant economic hardship and you would like to enter into an installment agreement to pay the taxes due.