Levy

Notice of Levy

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What is a Levy?

A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a claim used as security for the tax debt, while a levy actually takes the property to satisfy the tax debt.

If you do not pay your taxes (or make arrangements to settle your debt), the IRS may seize and sell any type of real or personal property that you own or have an interest in. For instance,

• We could seize and sell property that you hold (such as your car, boat, or house), or
• We could levy property that is yours but is held by someone else (such as your wages, retirement accounts, dividends, bank accounts, licenses, rental income, accounts receivables, the cash loan value of your life insurance, or commissions).

The 10 most important things you need to know about Levy

We usually levy only after these three requirements are met:

• We assessed the tax and sent you a Notice and Demand for Payment;
• You neglected or refused to pay the tax; and
• We sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy. We 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 by certified or registered mail, return receipt requested. Please note: if we levy your state tax refund, you may receive a Notice of Levy on Your State Tax Refund, Notice of Your Right to Hearing after the levy.

You may ask an IRS manager to review your case, or you may request a Collection Due Process hearing with the Office of Appeals by filing a request for a Collection Due Process hearing with the IRS office listed on your notice. You must file your request within 30 days of the date on your notice. Some of the issues you may discuss include:

• You paid all you owed before we sent the levy notice,
• We assessed the tax and sent the levy notice when you were in bankruptcy, and subject to the automatic stay during bankruptcy,
• We made a procedural error in an assessment,
• The time to collect the tax (called the statute of limitations) expired before we sent the levy notice,
• You did not have an opportunity to dispute the assessed liability,
• You wish to discuss the collection options, or
• You wish to make a spousal defense.
  At the conclusion of your hearing, the Office of Appeals will issue a determination. You will have 30 days after the determination date to bring a suit to contest the determination. Refer to Publication 1660, Collection Appeal Rights, for more information. If your property is levied or seized, contact the employee who took the action. You also may ask the manager to review your case. If the matter is still unresolved, the manager can explain your rights to appeal to the Office of Appeals.
   

Levying your wages, federal payments, state refunds, or your bank account.

If we levy your wages, salary, or federal payments, the levy will end when:

• The levy is released,
• You pay your tax debt, or
• The time expires for legally collecting the tax.
  If we levy your bank account, your bank must hold funds you have on deposit, up to the amount you owe, for 21 days. This period allows you time to solve any problems from the levy. After 21 days, the bank must send the money plus interest, if it applies, to the IRS. To discuss your case, call the IRS employee whose name is shown on the Notice of Levy.

Filing a claim for reimbursement when we made a mistake in levying your bank account

If you paid bank charges because of a mistake we made when we levied your account, you may be entitled to a reimbursement. To be reimbursed, you must file a claim with us within 1 year after your bank charged you the fee. Use Form 8546, Claim for Reimbursement of Bank Charges Incurred Due to Erroneous Service Levy or Misplaced Payment Check.

Federal and State Levy Programs

Levying your federal payments through the Federal Payment Levy Program (FPLP)

Under the Federal Payment Levy Program (FPLP), we may levy (take) monies from the following federal payments that you may receive: retirement from the Office of Personnel Management, social security benefits, federal vendor payments, federal employee salaries, or federal employee travel advances and reimbursements. This program electronically levies your federal payments paid through the Department of Treasury, Financial Management Service (FMS). If we electronically levy your federal payments, the levy will take 15% from each of the payments until the account is resolved. If you already are working with an IRS employee, call that employee for assistance. If you are not working with an employee, and you receive federal vendor payments, please call 1-800-829-3903 for assistance. If you are not working with an employee, and you receive any other federal payment, please call 1-800-829-7650 for assistance.

Levying your state tax refund through the State Income Tax Levy Program (SITLP)

Under the State Income Tax Levy Program, we may levy (take) your state tax refund. Currently, this only applies to individual state tax refunds, but may include business state tax refunds in the future. SITLP matches federal tax delinquent accounts against a database of state tax refunds for states participating in SITLP. If your state tax refund is levied, the state will issue a notice advising you of the levy. The IRS will also issue a notice, after the levy, offering you the opportunity to appeal the levy. The IRS notice will NOT be issued if you previously received a notice of our intent to levy that advised you of your right to a hearing. The state and IRS notices refer you to call 1-800-829-7650 or 1-800-829-3903 for assistance.

Levying your Permanent Fund Dividend through the Alaska Permanent Fund Dividend (AKPFD) Levy Program

For residents of the State of Alaska, we may levy (take) your Permanent Fund Dividend. This program matches federal tax delinquent accounts against a database of Alaskan residents eligible to receive the dividend. IRS will send you a notice prior to levying the dividend, giving you an opportunity to appeal the levy. For assistance, the notice refers you to call 1-800-829-7650 or 1-800-829-3903.

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