A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a claim used as security for the tax debt, while a levy actually takes the property to satisfy the tax debt. If you do not pay your taxes (or make arrangements to settle your debt), the IRS or State agency may seize and sell any type of real or personal property that you own or have an interest in.
- The IRS could seize and sell property that you hold (such as your car, boat, or house)
- The IRS could levy property that is yours but is held by someone else (such as your wages, retirement accounts, dividends, bank accounts, licenses, rental income, accounts receivables, the cash loan value of your life insurance, or commissions).
The IRS usually levies only after these three requirements are met:
- The IRS assessed the tax and sent you a Notice and Demand for Payment
- You neglected or refused to pay the tax
- The IRS sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy.
The 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.
If the 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.
If the IRS levies your wages, salary, or federal payments, the levy will end when:
- The levy is released
- You pay your tax debt
- The time expires for legally collecting the tax
If the IRS levies your bank account, your bank must hold funds you have on deposit, up to the amount you owe, for 21 days. This holding period allows time to resolve any issues about account ownership.
After 21 days, the bank must send the money plus interest, if it applies, to the IRS.
If you are facing a Bank Levy, you should contact us immediately. This is a very serious matter that requires the professional expertise of Creative Tx Solutions
We will research the details of your particular situation and advise you on the best actions and likely results. We will represent you and negotiate with the IRS to free your resources as quickly as possible.
Contact us today to schedule an appointment with a specialist from Creative Tax Solutions.
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