The 10 most important things you need to know about Levy

 

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THE 10 MOST IMPORTANT THINGS TO KNOW ABOUT AN IRS GARNISHMENT OR LEVY ON WAGES, BANK ACCOUNTS OR OTHER PROPERTY OR INCOME

  1. The IRS has the authority to levy income or assets if you have been assessed a tax liability and the IRS has demanded payment. 

  2. An IRS levy can result in the garnishment of your bank assets (including bank accounts, investments, etc., and could result in the seizure and sale of your home.  If a bank account is levied, it only reaches money in the account when the levy is served – it does not affect money deposited later...

  3. An IRS levy can result in a continuous levy against your personal and business income.  It attaches to future paychecks until the levy is released.  Wages and salary include fees, bonuses, and commissions. 

  4. The IRS is prevented from a levy on income or assets:

a)       During the period that an offer-in-compromise is pending with the IRS

b)       During the period that on offer has been made to pay your tax liability in an Installment Agreement

c)       If it is not economical for the IRS to impose the levy

d)       During the period you are in bankruptcy

e)       If you have a tax matter pending in a Federal court.

f)         If the property or income is exempt from levy.

g)       If property subject to levy is subject to a prior perfected lien.

h)       If your tax liability has been satisfied or becomes unenforceable by reason of the statute of limitations.

i)         IF the levy is on any tangible personal property essential in carrying on your trade or business.

j)         If release of the levy will facilitate collection by the IRS .

k)       If the levy has created an economic hardship due to your financial condition.  Economic hardship will be established if the IRS takes property or income for the cost of food, clothing, housing, transportation, medical, child support, court ordered payments, and other and other reasonable and necessary living expenses.

  1. The IRS levy is improper unless you have received a Final Notice of Intent to Levy and Notice of Your Right to a Hearing in a Notice CP 90 or CP 297.  Before property can be levied, you must be given a Notice and Demand for Payment, a Notice of Intention to Levy, and a Notice of a right to a Collection Due Process hearing.   

  2. You have a right to appeal all IRS levy actions.

  3. You have the right to redeem levied property.

  4. You have 30 days to make payment after the final notice of levy is issued.

  5. The notice and demand for payment must be left at your home or business, or mailed to your last known address.

  6. There is judicial review of an adverse IRS appeal decision for “abuse of discretion.”

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