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The IRS is authorized to collect unpaid taxes through an action called a levy. Any property or right to property that belongs to the taxpayer or on which there is a Federal tax lien can be levied. For example, the IRS can issue a bank levy to collect back taxes directly from your savings and checking accounts, or can levy your pay through wage garnishment. 


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.


What the IRS cannot levy

  • Your checking or savings bank balance

  • Your personal property (including a house, trailer home, boat, car, or almost any other physical item that the they deem financially worth seizing)

  • Your social security: the IRS can garnish from your social security payments

  • Your wages through wage garnishment

  • Unemployment benefits

  • Workmen's compensation

  • Things you need to do your job

  • Some public assistance payments

  • Undelivered mail

  • Some service-connected disability payments

What the IRS can levy

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Levies should be avoided at all costs and are usually the result of poor or no communication with the IRS

or State. A person should seek IRS tax relief before the situation ever gets to this point.


The IRS usually does not levy assets until three conditions are met: 

  • The IRS assessed the tax and sent you a Notice and Demand for Payment (a tax bill);

  • You neglected or refused to pay the tax; and

  • 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.

If these conditions have been met, and the IRS determines that a levy is the next appropriate action, the IRS may levy any property or right to property you own or have an interest in. For instance, 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). Or, the IRS could seize and sell property that you hold (such as your car, boat or house).

If you have already had a levy placed on your assets or property, call the Tax Man today to discuss options to have the levy released. 

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