IRS Tax Levy - How it Works

A tax levy is the legal seizure of property by the IRS. If you have failed to pay your taxes or have setup some other type of agreement, the IRS may begin to seize assets as way of settling the debt. It goes without saying that avoiding an IRS tax levy is very important - this is not something you ever want to deal with.

Contrary to popular belief, the IRS is not going to become the tax levy process just because they feel like doing so. In other words, this is a last resort of sorts. By the time the IRS actually starts the levy process, it is safe to say that you have received several notices in the mail. The IRS will only move forward with a levy if the following are met:

• The IRS assessed a liability, and sent you a notice demanding payment.
• You neglected to pay the money that is due.
• The IRS sent you a final notice of intent to levy and notice of your right to a hearing at least 30 days before the levy.

The IRS will send you the appropriate notices in the mail, or may even deliver them to you in person at home or your place of employment. Once you receive the final notice, you should expect the IRS to move forward after 30 days. It is the hopes of the IRS that you will contact them within this time period to pay what you owe, or at the very least make some sort of payment arrangement.

What types of tax levies will the IRS use to get the money that is owed to them? There are three forms that are used to collect taxes. They include: IRS wage garnishment, property seizure, and bank levy. The IRS wage garnishment is by far the most common form of tax levy. With this, the IRS contacts your employer and demands that they withhold a particular amount of money from each paycheck. They then collect this money until the debt is satisfied.

It is important to note that a tax levy is always the last resort of the IRS. Again, this is not something that they want to do. In fact, they would much rather you pay what you owe in full or through an installment agreement. That being said, if you give them no other choice they are forced to move forward with a tax levy.

Simply put, the IRS has made the tax levy so harsh that it usually scares most people into avoiding this at all costs. The last thing you want is for the IRS to come after you and take the money that is owed. Instead, it is much better if you are able to work things out on your own terms.

If a tax levy is closing in on you, it is important to take action right away. If you receive your final notice and don't do anything, you will be in a lot of trouble after 30 days.

Find out more information about a tax levy and consult a qualified professional.