IRS Notice of Levy
- Appealing a Levy
- Difference Between Lien & Levy
- Notice & Warning
- Right to a Hearing
- Get Professional Help
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IRS Levy: Understanding & Protecting Your Assets
An IRS levy is a legal seizure of your property to satisfy a tax debt. It’s different from a lien. A lien is a legal claim against property to secure payment of the tax debt, while a levy takes the property to satisfy the tax debt.
Here are key points about an IRS levy: Purpose of the Levy: The IRS uses levies to collect taxes that are not paid voluntarily. Before a levy is issued, the IRS will assess the tax and send a Notice and Demand for Payment.
Notice Requirement: If you do not pay your taxes or make arrangements to settle your debt, the IRS must provide you with a Final Notice of Intent to Levy and a
Notice of Your Right to A Hearing. These notices are typically sent 30 days before the levy is executed.
You have a right to request a Collection Due Process (CDP) hearing within 30 days from the date of the notice. If you request a hearing, the IRS reviews the case and considers any proposed collection alternatives or payment arrangements.
Types of Property Subject to Levy:
- Bank Accounts: The IRS can take funds from your bank accounts.
- Wages: A part of your income can be seized.
- Personal Assets: This can include cars, boats, and other property.
- Retirement Accounts: IRAs and other retirement accounts may be levied.
- Other financial assets can also be levied: Dividends, Rental Income, and Accounts Receivable.
- Exempt Property: Certain wages, benefits, clothing, schoolbooks & essentials are exempt from IRS levies, including pensions, disability, and mail.
- Process of Levy: After notice, the IRS can seize assets; bank funds are held for 21 days, and wage levies continue until the debt is paid or settled.
- Releasing a Levy: IRS releases a levy if the debt is paid, a payment plan is set, it causes financial hardship, or the collection period has expired.
- Appealing a Levy: Taxpayers have the right to appeal before or after the IRS places a levy on their property. The appeal could be through an IRS manager, the IRS Office of Appeals, or in court.
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