| p>An IRS levy is a form of collection involving seizure | | | | one time, as there is no guarantee that the tax payer |
| of assets. Often a levy will apply to wages or a bank | | | | will continue work there. |
| account, but in extreme cases it can also be applied to | | | | Appealing the Levy |
| real estate property. The IRS must send balance due | | | | There is no illegal levy by IRS, per se, but IRS mistakes |
| notices and a "Final Notice of Intent to Levy and Your | | | | are made from time to time. A levy can be appealed |
| Right to a Hearing" letter at least 30 days prior to | | | | via a Collection Due Process hearing. Grounds for |
| levying. This notice will be mailed or dropped off at the | | | | appeal include: |
| tax payer's last known home address or place of | | | | - The IRS assessed the tax and sent the notice while |
| business. | | | | you were in bankruptcy |
| IRS levies are a tool to get a tax payer's attention. For | | | | - The IRS made an error in the assessment |
| a case to come to the point of a levy a tax payer will | | | | - The statute of limitations expired before the levy |
| have been notified of the balance due and failed to | | | | notice |
| resolve the matter voluntarily. Bear in mind - the IRS will | | | | - You paid the tax in full before the notice was sent |
| collect one way or another. | | | | - You wish to make a spousal defense After the |
| How Does A Bank Levy Work? | | | | appeals hearing determination is reached, a tax payer |
| A bank levy is a one time seizure of the funds in a tax | | | | has 30 days to contest it. If he/she wishes to do so, a |
| payer's accounts. At the time the levy is issued to the | | | | manager can explain the rights to appeal within the |
| bank, any balance in the account is frozen for 21 days. | | | | Office of Appeals. |
| When this period has expired the frozen funds will be | | | | How Can I Stop a Garnishment or Levy? |
| taken and applied to the tax debt. At this point the | | | | If it's a bank levy, it will end after the 21-day period |
| funds are gone and cannot be released. However, the | | | | passes and the funds are taken. Additional bank levies |
| tax payer has this 21-day period to resolve the matter | | | | are separate and are not continuous. Wage levies, |
| with the IRS before the funds are actually taken. | | | | however, will continue until: |
| How Does A Wage Levy (Garnishment) Work? | | | | - The levy is released by the IRS (usually by |
| This type of levy is continuous in many cases, and is | | | | negotiation) |
| usually 30-70% of the gross pay. This can be | | | | - You've paid the tax debt |
| devastating and can leave one's life seriously changed. | | | | - The statute of limitations expires If you can prove |
| A notice of levy is sent to the employer, and failure to | | | | that the levy is causing financial hardship, the IRS may |
| comply on the employer's part can result in legal | | | | consider releasing the levy. It can also be released |
| consequences. | | | | when an agreement to resolve the debt is created. |
| Levies for contract wages (1099-MISC) are usually | | | | |