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Federal Tax Levies

Federal Tax Levy

An IRS tax levy is a legal seizure of your assets to satisfy the IRS taxes you owe. If you owe IRS and do not pay your tax debt, or do not arrange an installment plan, or do not make an offer-in-compromise to settle your tax debt, the IRS may seize and sell your assets to collect the taxes you owe.

To satisfy the Federal taxes you owe, the IRS may levy by garnishing your salaries and taking money from your financial accounts. If you are an employer and receive an IRS notice of levy against your employee, customer or other third parties, you should comply with the levy order.

As an employer, you have at least one full pay period after receiving an IRS “Notice of Levy” on Wages and Other Income before being required to send the funds from your employee’s wages to the IRS. Advise your employees with tax levies on their wages to contact the IRS as soon as possible to release the levies and resolve their Federal tax debt.

The IRS will usually levy after the following requirements are met:

1- The IRS assessed the tax and you received a “Notice and Demand for Payment”;

2- You ignored the notice or refused to pay the tax; and,

3- The IRS sent you a “Final Notice of Intent to Levy and Notice of Your Right to A Hearing” 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 on file by certified or registered US mail, return receipt requested.

 

Releasing a tax levy

To get an IRS tax levy released, contact the IRS immediately to resolve your tax debt and request a levy release. Or prove to the IRS that the levy is causing you an immediate economic hardship. If the IRS refuses to release the levy, you may appeal this decision.

You may appeal before or after the IRS places a levy on your wages, bank account, or other assets. After the levy proceeds have been sent to the IRS, you may still file a claim to have funds returned to you. You may also appeal the denial by the IRS of your request to have levied assets returned to you.

 

The IRS must release a Federal tax levy if it determines that:

1- You paid your tax debt;

2- The period for tax collection ended prior to the levy being issued;

3- Releasing the levy will help you pay your tax debt;

4- You arrange “Installment Plan” and its terms do not allow for the levy to continue;

5- The levy creates an economic hardship so that the tax levy prevents you from meeting your basic reasonable living expenses; or,

6- The value of the seized asset is more than your tax debt and releasing the levy will not prejudice the IRS’s ability to collect the tax debt.

Please note: The release of a levy does not mean that you do not have to pay the balance due. You must still arrange for an installment plan or make an offer-in-compromise with the IRS to resolve your tax debt or a levy may be reissued at a later time.

 

We Can Help Release Fedral Tax Levies