Knowing that you owe the Internal Revenue Service (IRS) money is a stressful experience, particularly if they start the collections process. There are several ways that the IRS may work to get the money it’s due, one of which is a levy.
A tax levy is a tool that enables the IRS to seize your property in order to satisfy the debt. This is not the same as a lien. A tax lien is a notice to the public that the government has laid a claim to your property. A levy is the actual taking of that property.
Several actions are considered levies
There are several ways the government can levy property. This can include taking money from your bank accounts, garnishing your wages or seizing assets like your home. The IRS typically doesn’t issue a levy without giving you notice. Typically, you’ll receive a Notice and Demand for Payment, which is followed by a Final Notice of Intent to Levy. You have 30 days to respond to that notice before the levy can proceed.
Options you may exercise
Levies aren’t automatic. You may have the opportunity to take care of the debt before an enforcement begins. You can pay the tax bill in full, set up a payment plan, apply for an offer in compromise or request a collection due process hearing to challenge the levy.
If the levy has already been issued, certain types of property may still be protected. For example, part of your wages is exempt from garnishment and items necessary for daily life, like a portion of your personal belongings or tools of your trade, may also be off limits.
Understanding your options is critical in these cases. Determining how to proceed may require the assistance of someone familiar with IRS cases and collection methods. It’s best to get that help as early in your case as possible.