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IRS Tax Levy

IRS tax levies are different from IRS tax liens and the IRS has the power to impose an IRS tax levy on prior liabilities. With an IRS tax levy your bank accounts and other assets can be at risk of being garnished.  If you owe the IRS money and are being levied, then you should contact a tax professional (or the IRS directly) to have this resolved.
The IRS will usually levy only after sending out multiple notices and if you have not established some sort of communication with them (or agreed to a payment plan).  The following requirements typically have to be met for an IRS tax levy to take place:

  • IRS assessed the tax and sent you multiple notices (including a Final Notice of Intent to Levy)
  • You haven't responded to the notices and/or haven't paid the liability
  • The IRS sent you a Notice of Your Right to A Hearing (which is basically a levy notice) at least 30 days before the levy takes place

An IRS tax levy is a garnishment or seizure to satisfy a tax debt you owe.  If an employer receives an IRS notice of levy against an employee or vendor, then it is important that they respond to it. The liable party can set up an up an installment agreement with the IRS (a full pay installment agreement or a partial pay installment agreement) or can apply for an offer in compromise. Sometimes getting in touch with the IRS Collections Department or Revenue Officer and coming up with a general solution can put a levy on hold and buy some time to provide the needed backup documentation for the IRS to determine whether a levy is something you can afford or whether it would create a hardship.

Alternatively, ignoring the IRS can cause you more trouble as they can take action to place an IRS lien or IRS tax levy on your personal assets and State tax refunds.