IRS Levy Help

What is an IRS Levy?

IRS and Other Asset Levies Explained

Falling behind on your debts is never a fun place to be. It’s less fun when the IRS places a levy on your assets. In this article, we take a look at what an IRS Levy is, why it happens, and what you can do about it.

What is an IRS Levy?

Simply put, if you owe back taxes and you ignore the IRS fights back. The IRS can seize your property, take money from your bank accounts, or sell your assets in order to satisfy the balance due.

The IRS will give you plenty of notices via mail before they take this step. If you do not satisfy the debt or make payment arrangements by the specified date, the IRS will attempt to take the amount of the levy directly out of your bank account.

Other Types of Levies

Private creditors may issue a levy against your bank account with a court order. Government agencies are not subject to the same requirement and do not need to secure a court order. The creditor must notify you of the upcoming levy at least 21 days before removing any funds from your account. You may not withdraw money or close the account during this waiting period.

Funds earned from child support, social security, unemployment, workers' compensation settlements and certain other types of government agency payments are exempt from levy. You must request the exemption and offer proof of the source of the funds.

IRS Wage Garnishments

Government agencies may also garnish an employee's wages for back taxes, child support and other delinquent payments required by law.

The IRS has the authority to levy up to 85 percent of the employee's paycheck. The levy notice will be sent to your company's payroll or human resources department. You must then withhold the appropriate amount of money from the employee's paycheck and send it to the IRS or state tax board. The employee must provide a wage garnishment release if he or she is able to work out a payment arrangement.

If you are behind on your taxes, the IRS may levy most payments from federal agencies. This includes railroad retirement benefits, Medicare supplier and provider payments. Payments on contracts between your company and a government agency, federal retirement annuities and travel reimbursements are also included.

You may apply for a hardship exemption if the levy will cause your company undue financial distress. Companies going through bankruptcy proceedings are automatically exempt from IRS levies.

IRS LevyIRS LevyIRS LevySeizing Your Assets

The IRS is within its legal bounds to seize real estate. The IRS may also seize personal property such as a car or boat. You will receive a 30-day notice. The notice will indicate seizures will follow if you do not pay your outstanding taxes OR contact the IRS to make payment arrangements. This authority extends to property and money you own, such as life insurance cash value even if held by another party. The government sells its seized property at auction to recover some of the funds owed by delinquent taxpayers.

What To Do If You Have An IRS Levy or Lien

Our firm specializes in IRS Resolution, and the protection of our clients is our number one priority. We will work quickly to stop any impending levies or liens. If you want an expert tax resolution specialist, who knows how to navigate through the IRS storm, and will advocate on your behalf, contact us - Tower Tax Relief LLC.  We’ll schedule a confidential consultation to explain your options to permanently resolve your tax problem and serve clients virtually or in person, whichever makes you most comfortable. Call us today, we are ready to help - 469-206-4050.