A levy is simply the legal seizure of debtor’s property in order to pay their debt. They are different from liens. Liens are simply a notice that a creditor has a claim against the property for repayment of a debt. Generally with a lien, the lien must be cleared before the property can be sold or transferred. The levy actually seizes the property. Often the property is then sold at auction in order to recover the loan. It is the action of last resort by the IRS to recover back taxes and you should be talking to a tax attorney long before this action is taken. If you do not pay your taxes or arrange to settle the debt, the IRS could size and sell cars, boats, houses, art, collections, and any other property you might own. They can also levy property that is yours but held by someone else. This would include wages, retirement accounts, dividends, bank accounts, licenses, rental income, accounts receivable, or any other financial assets you may possess. If you have an outstanding debt with the IRS, contact a tax attorney immediately to begin negotiations for a settlement.
The IRS has little interested in seizing a citizen’s property and selling it. The IRS will only levy property under the following conditions. You have been assessed a tax and you have received a Notice and Demand for Payment. If you have neglected or refused to pay the tax, the IRS will send you a Final Notice of Intent to Levy and Notice of Your Right to Hearing at least 30 days before the levy. The IRS will send this notice to wherever it can find you, be that your home, business, or last known address. Employers will have one full pay period after receiving a notice of Levy of Wages before they send any portion of their employees’ wages to the IRS. If the IRS is moving to levy your wages or property, you need to contact a tax attorney right away. An attorney can negotiate with the IRS and potentially make other arrangements, particularly if a levy would create an “economic hardship”.
To see how tax attorneys at Siegel Tax Law can help you contact us at 913-735-4829