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What Is A Tax Levy | How Can You Prevent It?

Updated: Oct 11


Coast to Coast - IRS Help

IRS Tax Relief - Fresh Start Program

The IRS can and will levy your paycheck, your bank account and your assets to liquidate a tax debt.

What Is a Tax Levy?

A federal or state tax levy occurs when the government seizes your property to pay off taxes that you owe. It’s generally a last resort used to collect the taxes you owe or back taxes you still haven’t paid off. When the tax levy order goes out, your wages, bank account, and property are taken by the IRS, and the amount seized, or the proceeds from the sale, are used to pay your tax liability. An IRS tax levy is very serious. The IRS will go to the tax levy after the tax liability has been assessed, a bill has been sent, the taxpayer didn’t pay the bill and additional notices have been sent stating the IRS’ intent to levy your assets (#IRSwagegarnishment). A Tax Levy - What will a tax levy do to you? A tax levy will attack you in several ways. Here are the three types of tax levies the IRS can and will implement:

a Wage Levies: The IRS can levy your wages/paycheck. After a wage levy is instituted, you may still receive a portion of your wages, but you won't be left with much. A portion of your paycheck will be exempt from the levy based on the standard deduction and your allowance. However, any income over that amount will be paid directly to the IRS. Should you have a Revenue Officer assigned to your file, that Revenue Officer can sign off on a "Manual Levy" order. A Manual Levy will take 100% of your check.

b. Account Levies: The agency can place a tax levy on your accounts, such as bank accounts for unpaid taxes. When an IRS tax levy hits your bank, you will have 21 days to contest the levy and get your money back. This 21 day period includes Saturdays, Sundays, and holidays. So, you don't have 21 days to work on the levy release.

c. Social Security: The IRS can and will order the Social Security Administration to levy your Social Security Benefit. The IRS can levy an automatic 15% of your Social Security check. This authority comes from the Federal Payment Levy Program (FPLP). This also applies to Veteran's Pensions.

d. Asset Levies: The government can seize your assets, such as your house or car, and then sell them. The proceeds of the sale, after paying off any debts on the property and the costs of the sales process, are applied to your tax debt. If there are excess proceeds, those will be returned to you. How To Prevent A Tax Levy

The obvious answer to prevent a tax levy is to pay the tax liability on time. The IRS won’t levy your property if you have a current or pending Installment Agreement, Offer in Compromise, or if the IRS agrees you can’t pay because of economic hardship (#CurrentlynotCollectible). For example, if you can’t pay your tax bill, don’t ignore it and hope that the IRS won’t notice, or blow off letters like an IRS Intent to Levy (#CP504) your assets. If you’re in that situation, you really should find yourself a tax professional to represent you.

If you find yourself in receipt of an IRS Notice of Intent to Levy or an IRS Notice to Levy, call the tax pros at Flat Fee Tax Relief. Our teams have routinely had an IRS tax levy stopped in one day for more than a decade.

Our teams provide coast-to-coast IRS tax relief as we are located in Clearwater, FL, and San Diego, California.



CALL 1-866-747-7435



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