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Federal Tax Levies

A levy is a legal seizure of the taxpayer's property to satisfy a tax debt. The IRS may collect the amount of taxpayer's tax obligation by levy against all property and rights to property in the hands of the taxpayer or subject to the tax lien. The person in possession of property or rights to property subject to levy must surrender the property on demand. Failure to honor the levy renders the person served personally liable and subject to penalty.

Levies are different from liens. A lien is a claim used as security for the tax debt, while a levy is a procedure by which the taxpayer’s property is actually taken to satisfy the tax debt.

When and how levy is made:

The property of a delinquent taxpayer may be seized and sold, without judicial intervention, only after the following requirements have been met:

  1. IRS assessed the tax and sent you a Notice and Demand for Payment;
  2. Taxpayer neglected or refused to pay the assessed tax within ten days after the Notice and Demand; and
  3. IRS sent taxpayer a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy. IRS may give you this notice in person, leave it at your home or your usual place of business, or send it to your last known address by certified or registered mail, return receipt requested. Please note: if IRS levies your state tax refund, you may receive a Notice of Levy on Your State Tax Refund, Notice of Your Right to Hearing after the levy.

Please note that the IRS may not levy on any property or right to property of any person unless the IRS has notified the person in writing of the right to a hearing before the levy is made. The notice is required only once. If the person affected by the contemplated levy requests it, the Appeals office will hear the issue of the proposed levy.

Property Subject to Levy

If you do not pay your taxes (or make arrangements to settle your debt), the IRS may seize and sell any type of real or personal property that you own or have an interest in. For instance,

  • IRS could seize your bank accounts
  • IRS could seize and sell property that you hold (such as your car, boat, or house), or
  • IRS could levy property that is yours but is held by someone else (such as your salary and wages, retirement accounts, dividends, bank accounts, licenses, rental income, accounts receivables, the cash loan value of your life insurance, or commissions).

If IRS levied your wages or bank accounts, the levy will only end when:

  • The levy is released,
  • You pay your tax debt, or
  • The time expires for legally collecting the tax

If you are facing a levy and need an immediate levy release, please call us at 1-855-GSA-TAXHELP (1-855-472-8294) for immediate help .

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