IRS TAX LEVY
An IRS Levy is another form of Collections
action similar to a Lien, except that whereas a Tax Lien is a
declaration that the IRS has a claim on a taxpayer's assets due to
a tax debt, a Tax Levy is effectively a seizure of certain assets
in order to satisfy that tax debt. A Levy is most frequently placed on
relatively liquid assets, such as bank accounts and securities,
but the IRS can and will sometimes Levy real and physical property, such as a
taxpayer's house, car, boat, etc. In addition, the IRS may also
Levy a person's wages and/or a business's Accounts Receivable. In
the case of a Wage Levy, the IRS will contact the payroll
department of the taxpayer's employer and request that they withhold
a portion of that taxpayer's wages or salary and pay it directly
to the IRS instead - and the employer has no authority to refuse.
The IRS will issue a Levy only after they have
assessed the liability and sent the taxpayer a Notice and
Demand for Payment; if the taxpayer subsequently neglects to respond or
refuses to pay, then a Notice of Intent to Levy is sent at least 30 days before the Levy goes into
effect. This notice acts as a final warning. If the 30 days lapse without the debt
having been repaid, the Tax Levy takes effect. When the IRS Levies
a bank account, the bank is obligated to place a hold on the funds
for 21 days, after which the money must be sent to the IRS as
payment against the tax debt.
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