Tax Levies

The IRS uses levies as a last resort to collect an outstanding tax debt. By issuing a levy, the IRS can seize property you own and count its monetary value against your tax bill until the debt is satisfied. For example, a levy can be issued on your house, your wages, your bank account or retirement account, or other assets you own.

IRS tax levies come in two types: one-time and continuous levies.

• A one-time levy involves the IRS taking possession of assets held at the specific time the levy is issued. For example, if the IRS levies your bank account, they will seize the funds currently present in your account. If they wish to seize additional funds deposited later, they will need to issue a new levy.
• A continuous levy remains in effect until your debt is paid in full or the levy is released. For example, wage garnishment is an example of a continuous levy. A portion of your wages from each paycheck is seized without the need to issue new levies.

The IRS can place a levy on any of the following assets:

• Property Such as Real Estate, Vehicles, or Boats
• Wages
• Bank Accounts
• Retirement Income
• Social Security Benefits
• Future Federal or State Tax Refunds

Liens and levies are frequently confused. According to the IRS, “A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a legal claim against property to secure payment of the tax debt, while a levy actually takes the property to satisfy the tax debt.” 

In other words, while both liens and levies place a claim on your property, a lien keeps the property in your possession, albeit with caveats. A tax levy, on the other hand, removes the property from your possession. Wiggam Law has extensive expertise helping taxpayers find relief from both tax liens and levies.

If you receive this notice, it’s crucial to take immediate action. You have 30 days to file for a Collection Due Process Hearing, which can prevent the IRS from moving forward with the levy. Contacting a tax attorney as soon as possible is important to avoid asset seizure.

Yes, the IRS can issue a bank levy, which allows them to freeze the funds in your account and seize the money to pay your tax debt. This is typically a one-time levy. Your financial institution holds the seized funds for 21 days and you are not able to access the account with the funds while they are being held.

Yes, if you have personal tax debt, the IRS may seize your business assets in certain situations. The IRS may also seize business assets for unpaid business taxes, and the seizure may force your business to stop operating.

You can stop or release a levy by paying the full tax bill, negotiating a payment plan with the IRS, proving financial hardship to get “Currently Not Collectible” status, or submitting an Offer in Compromise to settle for less than the full amount owed.

Yes, you can negotiate with the IRS to avoid or lift a levy. Options include setting up an installment agreement, filing for innocent spouse relief, or submitting an Offer in Compromise. A tax attorney can help you find the right solution for your unique case.

Yes, you can appeal a tax levy by requesting a Collection Due Process Hearing within 30 days of receiving the Final Notice of Intent to Levy. You can also appeal a levy by taking a Collections Appeal Program (CAP) appeal if you are outside the 30 day period. An experienced tax attorney can help guide you through the appeals process.