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.

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.

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.

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.