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CGCPA
CGCPA, CPA
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Experience:  over 40 years experience in tax matters
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I received a tax execution letter from the State of Georgia

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I received a tax execution letter from the State of Georgia for back taxes owed. It came from the Levy Division. It said I must pay all my taxes owed ($62k) by 12/28 or they will start initiation of enforced collection activity. Since I cant do that, I called to ask about starting the Offer in Compromise or Installment Pay Arrangement. They said I could do that but the levy action is still in force. How can I handle this? Also, when they levy my account, is it only against my personal account? I have a business/corp account. Can they levy that? My wife has a personal account seperate from mine and these back taxes came before we got married, so there is no burden on her. Can they levy that account?
Submitted: 3 years ago.
Category: Tax
Expert:  CGCPA replied 3 years ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

 

The levy can be against any account over which you have signature power. It will not be stopped until the receive and process in a payment arrangement of Offer in Compromise (OIC). To get the OIC forms you can go direct to the state tax department web site and download the forms and instructions. You will need to provide a great deal of information. After all, you are trying to show them why it is in their interest to accept this deal. They are not concerned about your best interest.

 

They cannot levy your wifes account unless you have signature power there also. I would recommend moving it and not including yourself as a signer until this is resolved. That will protect her.

 

If you require additional assistance please feel free to ask.

Customer: replied 3 years ago.
OK.. So would you recommend that I use a tax lawyer to help speed up the OIC process or should I just do it myself? They said on the phone that it could take up to 2 years to get it processed. I didnt know they could levy my business account.
Expert:  CGCPA replied 3 years ago.

The process does not usually take as long as they told you. Usually it takes about 2-3 months. Since you will need to provide a lot of information in completing the form you should consider starting it yourself. That way you will know certain areas and be able to have the questions you have for the remainder. If you are comfortable with it all you can submit it yourself. I would not recommend that. A better choice is to get it going yourself and take it to a professional (CPA or tax attorney) for review, completion, and polishing prior to submission. You will still be the source of the information but the professional can represent you in dealing with the state. Additionally, the less the professional needs to do the lower the fee you will be charged.

 

Yes, they can levy your business account. At this point they are looking at it as an extension of you and a potential place to hide money from them. Once the OIC is submitted the levy actions are stopped. However, if the OIC or payment plan is rejected they levy process can start again immediately. If you have other assets besides your bank accounts they can also be either seized or liened. If you home is only in your name it can be taken and auctioned but if it is held jointly with your spouse they can only lien your interest in it. Your spouse has no obligation to them and therefore they cannot take what is hers.

Customer: replied 3 years ago.

OK.. this is very good information.. I will proceed with the OIC, then get someone to help me clean it up before I submit it.. I have two more questions, then, I will move on.

First, do they stop the levy action when they receive the request for OIC or after some resolution on it? Second, in your experience, since this letter said I should send the full amount by Dec 28th... how soon do they usually do the first levy..and.. when they do a levy, how soon is the second, etc.. ??

Expert:  CGCPA replied 3 years ago.
The first levy is usually within ten days after the notice of intent to levy. Then about every 30 days they will be back until they get all they want including interest and penalties. The OIC submission stops the levy action (it is called a stay of lien) until the OIC is accepted or rejected. If the OIC is rejected you can resubmit but usually they will have visited your assets again. The collection units in our tax departments are very efficient so I would get this moving as quickly as possible.
Customer: replied 3 years ago.
sorry.. one more question.. I have been pondering this for some time. What if I declare bankruptcy?.. I have been holding out hope that I wouldnt have to do this.. Will this stop all levy action??
Expert:  CGCPA replied 3 years ago.
A bankruptcy filing will place tax collections on a temporary hold. Once the process is completed they will be back. Bankruptcy filings do not eliminate taxes.(Isn't it great how governments protect themselves but not the rest of us?) In a chapter 11 or 13 bankruptcy you can set up a payment plan to pay them down over time - usually up to 5 years but they may reject this and force the case to be converted to a Chapter 7 liquidation. In a liquidation you can lose your home and many other assets. I would not recommend this until all other avenues are tried.
Customer: replied 3 years ago.
OK.. thank you for all of your help. How do I get in touch with you again, if I want to get more answers?
Expert:  CGCPA replied 3 years ago.

You are able to come back to Just Answer at any time and one of us will be able to assist you. If you wish to specifically request me just start your question with my name. Another option is to return to this question in the my questions section on your screen.

 

Thank you for letting me assist you. I know this can be a trying matter.

CGCPA, CPA
Category: Tax
Satisfied Customers: 3742
Experience: over 40 years experience in tax matters
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