Federal Tax Levies Against Wages & Property


The IRS can seize and sell your real and personal property to satisfy a tax debt. In addition, the IRS can levy against your wages, also known as a wage garnishment. The IRS can levy against other property you may own such as retirement accounts, accounts receivables, rental income, and of course bank accounts.  The IRS can also levy against your federal and state income tax refunds, and if filing jointly they can come after the tax refund due your spouse unless they qualify for injured spousal relief.


Tax Lien vs. Tax Levy

Whereas a tax lien is a claim that the Internal Revenue Service uses to secure payment of a tax debt, a tax levy actually takes property or wages to satisfy that debt.  A lien essentially lays the groundwork for a levy, which is why an IRS debt attorney will advise you to take immediate action if you receive notice of a lien.


IRS Tax Levy

A bank levy or any other type of levy by the IRS will occur only after certain events have taken place. After a tax debt has been assessed, the IRS will send to you a Notice of Demand and Payment. If you fail to respond to that Notice of Demand and Payment by failing to pay the tax debt or establishing some type of tax settlement or repayment plan, the IRS will start sending you Notices of Intent to Levy.  These are continued warning letters informing you to take action and resolve this tax debt problem because the IRS will soon look to levy your property.  Finally, the IRS will send to you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing at least 30 days before the levy.


Should the IRS escalate their efforts to collect on your debt, the following are examples of assets that may be seized:


    Real estate

    Retirement Accounts


    Checking and Savings Accounts

    Rental Income


Bank Levies

For bank accounts, once the bank is notified of the levy, it is required to place all funds on hold for 21 days. After the 21 day period ends, the bank is then required to turnover funds from that bank account to the IRS. During this 21 day period it is crucial to takes steps to resolve the tax problem with the IRS. And it is also important to have that tax resolution in writing to use as evidence in future dealings with the IRS.


Appealing a Tax Levy

It is possible to successfully appeal to remove a tax levy under certain circumstances.  At Sheppard Law Offices, we have helped many of our clients appeal tax levies through requesting Collection Due Process hearings with the Office of Appeals.  Here are some of the grounds upon which we can help you win an appeal of your tax levy:


    The IRS assessed your tax and sent the notice of levy during your bankruptcy proceedings

    The IRS made a procedural error during the assessment of your taxes

    The statute of limitations expired prior to the IRS sending the notice of levy

    You were not afforded an opportunity to dispute your assessed liability

    You have made a request to discuss collection options


A levy ends when either the levy is released by the IRS, the tax debt is paid in its entirety, or when the time period for collection has expired. A tax levy can also be released if you can prove that an economic hardship would result if the levy would take place. However, this does not mean the tax debt disappears. Action must take place with the IRS to establish a tax settlement or payment plan arrangement.


Contact the Sheppard Law Offices today at 1-877-505-9455 to receive a free consultation regarding your IRS tax lien, tax levy, or wage garnishment.






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