IRS Wage Levy

A levy is the legal seizure of your property. The IRS will levy to satisfy a tax debt. Levies and liens are different. A lien is a claim used as security for the tax debt. An IRS lien will encumber your current property and any property you acquire in the future. A levy action takes your property to satisfy the tax debt.

If you do not pay your taxes or setup a payment arrangement, the IRS may seize and sell your property. The IRS can levy any type of real or personal property that you own or have an interest in. For instance,

  • 9The IRS can seize and sell all property that you hold (such as your car or house), or
  • 9The IRS can levy property that is yours but is held by someone else (such as your paycheck, retirement accounts (401K or IRA), dividends, bank accounts, licenses, rental income, accounts receivables, the cash loan value of your life insurance, or commissions).
The IRS will levy, but levies are a form of enforced collections the IRS must meet three requirements to issue a levy:

  • 9The IRS has assessed the tax and sent you a Notice and Demand for Payment;
  • 9You did not pay the tax or setup an installment arrangement; and
  • 9The IRS will send you a Letter 1058. This is your 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.
You still have rights. Just because the IRS has mailed you a Letter 1058, this does not mean that you must accept a levy on your property.

You can ask an IRS manager to review your case, or you can request a Collection Due Process hearing. The majority of taxpayers that find themselves in this position should not attempt to handle these tasks by themselves. Are you willing to bet your property or income that you can resolve this problem with the IRS?

A Collections Due Process Hearing is a formal request by the taxpayer to avoid enforced collections. A Request for a Collections Due Process Hearing must filed, within 30 days of the date on your Final Notice of Intent to Levy. Some of the issues you may discuss include:

  • 9You paid all the taxes you owed before the IRS sent the levy notice,
  • 9The IRS assessed the tax and sent the levy notice when you were in bankruptcy, and subject to the automatic stay during bankruptcy,
  • 9The IRS made a procedural error in an assessment,
  • 9The time to collect the tax (called the statute of limitations) has expired before the IRS sent the levy notice,
  • 9You did not have an opportunity to dispute the assessed liability,
  • 9You wish to discuss your collection options, or
  • 9You wish to make a spousal defense.
The Collections Due Process Hearing is your chance to stop the IRS’s collections efforts. Many times a taxpayer just wants to setup an installment agreement, or the taxpayer needs to evaluate if they can repay any money. Do you think you want your first Collections Due Process Hearing to be handled by yourself? Hire a professional that has been in many Collection Due Process Hearings.

After the hearing, the IRS Office of Appeals will issue a determination.

Your rights don’t stop at this point. After the IRS Office of Appeals issues a determination, you will have 30 days to bring a suit to contest the determination.

If the IRS levies or seizes your property, you don’t have much time. Contact us immediately! We cannot get your property back once the IRS takes it.

Levying Your Wages, Federal Payments, State Refunds, or Your Bank Account

If the IRS levies your wages, salary, federal payments or state refunds, the levy will end when:
  • 9The levy is released,
  • 9You pay your tax debt in full, or
  • 9The time expires for legally collecting the tax.
If you do nothing, the IRS will take your wages until, the debt is paid in full or the statute of collections expires. The IRS has the power to take your wages until they are paid in full. How long can you survive without a paycheck? Contact us immediately! You should not waste any time before you hire us.

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 us time to resolve any issues and get you your money back. After 21 days, the bank must send the money plus interest, if it applies, to the IRS. We cannot get you your money back once the IRS has taken it.

In 2-5 business days we can obtain a release of levy and we can get your money put back into your bank account. What we cannot do is, we cannot get your money back after 21 days.

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