WHAT IS A TAX LEVY?

A federal or state tax levy is a method the IRS uses to satisfy a debt of tax through the legal seizure of your property. It is important to note that a tax levy is different from a tax lien. A lien is a claim to obtain security interest in your property for the tax debt; a levy is the actual taking of that property.

The IRS can then subsequently sell any type of real or personal property that you currently own, will own in the future, own but in the possession of a third party, or any property you have an interest in to satisfy the debt.

WHY IS AN IRS TAX LEVY FILED AGAINST YOU?

The IRS will impose a tax levy on you if you do not pay your taxes or you fail to make some kind of payment arrangement with the IRS.

WHEN IS A TAX LEVY FILED AGAINST YOU?

A tax levy should never be unexpected. Before the IRS imposes a tax levy on any of your property, they will attempt to notify you via phone calls, letters, liens and a 30 day Notice of Intent to levy. The final notice will generally be delivered to you in the mail or left at your home or work.

CAN YOU APPEAL A FEDERAL OR STATE TAX LEVY?

In the case of a tax levy, you may ask that an IRS manager to review your case. Another option is to request a Collection Due Process Hearing to preserve your right to go to court for a hearing with the Office of Appeals. In order to do this, you will need to file a Collection Due Process document with the IRS office, indicated on the Notice of Intent to Levy you received.

​You only have 30 days from the date on your notice to file any request for appeals, so if you decide you want to fight the levy you need to obtain the services of an experienced tax advocate at Tax Resolution to start the process.

HOW TO STOP A TAX LEVY?

The most definitive way to have the IRS release a levy on your property is to pay your taxes, the penalty they assess and any interest that you owe. There are also several mandatory circumstances under which the IRS must release a tax levy:

  • If the statute of limitations ran out before the levy was served
  • If the taxpayer provides documentation conclusively proving that releasing the levy will in fact facilitate the tax paying process for the taxpayer and make things easier for the IRS
  • If the taxpayer has, or enters into an installment agreement, unless that agreement indicates that the levy does not have to be released
  • If the IRS makes a determination that the levy is creating an economic hardship for the taxpayer
  • If the fair market value of the property levied exceeds the tax liability of the taxpayer, and the releasing the levy will not hinder the collection of the tax liability

Unfortunately, in practice, the chances of reclaiming possession of levied property are very slim. However, once the levy is released, the IRS will no longer seize property. When you are trying to release a levy, there many ways to go about it. Schedule a free consultation with one our tax advocates at Tax Resolution to get help with a tax levy today.