IRS Notice of Levy

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 properties are exempt from IRS levies, like necessary

schoolbooks, certain clothing, undelivered mail, certain annuity and pension

benefits, workers' compensation, unemployment benefits, certain service-connected

disability payments, and a portion of wages.

Process of Levy: After the notice period, the IRS can seize your property. If the levy is

on a bank account, the funds in the account as of the date of the levy are held and

after 21 days sent to the IRS. For wages or other income, the levy remains in effect

until the debt is paid or arrangements are made.

Releasing a Levy: The IRS will release a levy if:

The tax amount, including any interest and penalties, is paid.

You enter into an installment agreement and the terms of the agreement don't allow

for the levy to continue.

The levy is causing an economic hardship, meaning the levy is preventing you from

meeting basic, reasonable living expenses.

The statute of limitations for collecting the tax expired before the levy was issued.

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.

Dealing with an IRS levy can be complex. Let me help you navigate the process.