All IRS Back Tax Help comments are in blue. This post is about dealing with an IRS Notice of Levy (IRS Form 668). If you have questions about an IRS bank levy, an IRS Federal or State Levy program action, how to get an IRS levy released or returned, there is discussion and links below that will be helpful.
If you know you need to take action, read my thread about whether or not you should hire someone (You should not automatically) titled “Owe the IRS Back Taxes? When, Who, and How to Hire IRS Back Tax Help” Before you do anything else.
As usual, If you like the tone of these posts, contact me for consultation. I can be reached at email@example.com. Before you email me, please click on and read “About IRS BACK TAX HELP”.
Here’s the irs.gov link and full, original text:
“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.” Typically, an IRS bank levy is used to get your attention. The IRS knows they won’t satisfy the whole tax liability, but it lets you know the IRS means business about collecting their back taxes. If you get a receivable levy, or a threat to seize assets, that’s more serious.
“If you do not pay your taxes (or make arrangements to settle your debt), the IRS may seize and sell any type of real or personal property that you own or have an interest in. For instance,
- We could seize and sell property that you hold (such as your car, boat, or house), or” We get these two questions constantly: Can the IRS seize my home / house? and, Will the IRS go to the trouble to seize your primary residence? The answer is rarely, but the IRS will seize your house / home if you refuse to engage them. There are solutions, but you must take action.
- “We 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).” Yes, the IRS will take your 401k, your social security, and anything else they can get their hands on unless you take action to solve your problem. Read the link about whether or not to hire someone posted above.
“We usually levy only after these three requirements are met:
- We assessed the tax and sent you a Notice and Demand for Payment;” They only send it to the address on record. If you have moved and they send it to the wrong address, they will still move forward with the IRS bank levy.
- “You neglected or refused to pay the tax; and” More often than not, you are not paying your taxes because you refuse to or because you are neglectful. It’s because you can’t pay your overdue IRS tax. There are solutions, but you must seek them out.
- “We 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. We 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. Please note: if we levy 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.” Please note, it could be “at most” as well. You have 30 days from the date the letter was generated to protect yourself. This letter is also known as an IRS Letter 1058. You must respect this threat. See my post about IRS certified mail to learn more.
“You… may request a Collection Due Process hearing with the Office of Appeals by filing a request for a Collection Due Process hearing with the IRS office listed on your notice.” A Collection Due Process Appeal (CDP) aka IRS Form 12153 is enclosed any time you receive an IRS Final Notice of Intent to Levy (IRS Letter 1058). If you don’t hire someone, make sure you file your CDP on the 29th day after the date on your IRS Final Notice of Intent to Levy.
“If your property is levied or seized, contact the employee who took the action. You also may ask the manager to review your case. If the matter is still unresolved, the manager can explain your rights to appeal to the Office of Appeals.”
Levying your wages, IRS Federal and State Levy Programs, or your bank account.
If we levy your wages, salary, or federal payments, the levy will end when:
- The levy is released,
- You pay your tax debt, or
- The time expires for legally collecting the tax.
These statements are a little misleading. If the IRS executes a bank levy, you can get these funds returned to you, but you must act quickly and ferociously. They can’t keep the bank levy if you have critical business or personal needs. However, if you have been levied by the IRS, it’s time to get help or get new help. An IRS bank levy should not happen if you are being represented properly. Contact us for analysis.
“If we levy 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. To discuss your case, call the IRS employee whose name is shown on the Notice of Levy.” If you have been levied, it means the IRS is controlling your bank accounts, your receivables, and potentially your physical assets. Don’t leave anything to change, get a tax professional to help with your IRS tax problem now.