Definition of an IRS Tax Levy – An IRS tax levy, under United States Federal law, is an administrative action by the IRS to seize property to satisfy an IRS tax liability.
What Can The IRS Levy – The IRS can levy wages, bank accounts, accounts receivable, social security payments, insurance proceeds, real property, and a personal residence (in some cases). The IRS can levy upon assets that are in the possession of the taxpayer, which is called a seizure. The IRS can also levy upon assets that are in the possession of a third party such as your bank or a brokerage house.
What is Exempt from an IRS Tax Levy – Unemployment benefits, worker's compensation, certain pension and annuity payments, certain services-connected disability payments, certain public assistance payments. For a more comprehensive listing of items exempt from an IRS tax levy, see our Resources Information.
IRS Notice and Demand – This is the IRS Notice which includes the assessed tax and is the formal final demand for payment to the IRS.
Final Notice of Intent To Levy – This IRS Notice is sent to you at least 30 days in advance of the levy. This advance notice is intended to give you the thirty days to contest the IRS tax levy if it is erroneous. Unfortunately, the IRS can freeze the assets during this waiting period. The IRS tax notice will clearly describe the tax levy procedures, your options for avoiding the IRS tax levy (i.e. beginning installment payments for overdue tax) and the steps for redeeming property if it is seized by the IRS.
IRS Wage Levy – The IRS wage levy is filed with your employer (Order to Withhold Notice) and remains in effect until the IRS notifies the employer that that wage levy has been released (or “lifted”). These IRS tax levies are typically referred to as a “continuous levy”. There is a specific formula that your employer is mandated to use to calculate the portion of your net paycheck which will be remitted directly to the IRS via the IRS wage garnishment. An IRS wage levy typically takes up to 80% of your net paycheck, leaving you with little for basic living expenses. An IRS wage levy can rapidly be financially ruinous. You need to stop this IRS wage levy quickly. Our IRS wage levy specialists offer a free evaluation of your IRS garnishment problems.
IRS Bank Levy – Much like the IRS wage levy, an IRS bank account levy imposes immediate financial harm. An IRS bank levy is a one time levy of all funds that are in your bank account at the time the Levy Notice is received by your bank. Your bank account is immediately frozen for a “21 day period” before the bank is required to send your money directly to the IRS. If you need to stop an IRS bank levy, then time is of the essence. Using tax levy specialists that have an in depth knowledge of IRS tax levy rules, and experience in securing IRS tax levy releases could mean the difference between effectively stopping the IRS tax levy from proceeding, or watching your funds disappear. Find out how you can stop an impending IRS bank levy by contacting our IRS tax levy experts for help.
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