| Levies and liens are often confused. While a lien is | | | | (1) The tax liability is fully paid; |
| merely a security for tax debt, a levy, on the other | | | | (2) the taxpayer pursues tax resolution with the IRS, |
| hand, is the process by which the asset is seized and | | | | resulting in the release of the levy; |
| sold to reconcile tax debt. | | | | (3) The Statute of Limitations associated with the tax |
| An IRS tax levy can be assessed after: | | | | debt expires (usually 10 years after the last liability was |
| (1) The IRS sends a Notice and Demand for Payment; | | | | accrued). |
| (2) The taxpayer fails to pay off the tax debt; | | | | In the event an IRS tax levy is placed on the |
| (3) The IRS sends the Final Notice of Intent (left at the | | | | taxpayers bank account, the bank is legally obligated |
| home, work, last known address, or served in person); | | | | to put on hold all current deposits, up to the amount of |
| and | | | | the tax liability. This is to allow attempts at resolution to |
| (4) The IRS sends Notice of Your Right to a Hearing. | | | | take place, either through appeal or an IRS program |
| In the event that the IRS intends to levy an asset of | | | | for tax resolution. At this time, the owner of the |
| the taxpayer's, the taxpayer may request an IRS | | | | account may claim that some of the money withheld |
| manager to review his/her case or a hearing, by filing | | | | must be used for living expenses, such as housing, |
| for Collection Due Process with the Office of Appeals. | | | | transportation, etc., in which case the IRS may release |
| Any filing must transpire sooner than 30 days after the | | | | some of the money. 21 days later, if the tax liability has |
| Notice. | | | | not been addressed, the bank sends the withheld |
| After an IRS tax levy has begun, it will discontinue only | | | | money to the IRS. |
| after one of the following: | | | | |