I owe the IRS back taxes and I'm working on an installment agreement. Why did they levy my account?

The most likely explanation for why the IRS has continued collection action despite your trying to arrange an agreement is that the hold placed on your account has expired. Once the hold has expired, collection action begins again.

Why would the hold expire? Typically while you are negotiating an installment agreement to pay back taxes, the IRS agent in charge of your account places a hold on the account for a period of time. That period of time should be long enough for you to compile and provide all the information the IRS agent has requested. If you do not provide all and I do mean ALL of the information requested, you will be unable to reach an agreement with the IRS, and collection action will resume when the hold expires.

Getting 90% of the information requested will not suffice. The IRS agent has a checklist to complete. If every item on the checklist is not addressed, an attempt to reach a payment arrangement will not succeed. The IRS agent will NOT contact you when the hold on the account is expiring. You will find out when collection action begins to proceed again. The IRS agent may have a hundred or more cases in progress at any one time. You are the responsible party – not the agent.

The moral to this story is clear – give the IRS agent 100% of the information required, and you will be able to reach an agreement. Believe it or not, the agent actually wants to reach a fair agreement and remove your file from his / her to-do list. However, anything less than 100% WILL NOT WORK!

Thanks for reading!
Frank