What is a Levy?
A levy is the IRS’ attempt at seizing funds from the taxpayer. This can be done via several different types of levies:
- Wage levy
- Bank Levy
- Accounts Receivable Levy
Wage Levy – In this case, the IRS will seize a portion of your paycheck. This is not a one-time seizure either. The IRS will seize that same portion out of every paycheck each pay period until the balance is satisfied or the levy is released. How much can the IRS seize? That depends on several factors but often times, it’s more than the taxpayer thinks. The IRS will take into consideration the amount of people in your household but will often leave the taxpayer with only a few hundred dollars per paycheck. If you find yourself with a notice of wage levy from the IRS, do not wait any longer – call our team of Tax Professionals. We can help get that levy reduced or released and get you back on track.
Bank Levy – When the IRS issues a bank levy to your bank, the bank must take all of the funds that are in your account at the time the levy was received. The good news is that those funds aren’t just sent directly to the IRS. The bank must hold those funds for 21 days before sending them to the IRS. In that 21 day time frame, it’s our team’s opportunity to attempt to get that levy released. In those 21 days, hardship must be proven to the IRS meaning that if the IRS took these funds, it would create a hardship preventing the taxpayer from paying essential items like rent, utilities, or other necessary living expenses. Our Team of Tax Professionals have a great deal of experience in getting levies released. Call our team today for your free initial consultation!
Accounts Receivable Levy – These levies are specific to business owners where the IRS will issue the levy notice to your customers and demand the customer pay the IRS instead of the business. This can be damaging in a lot of ways. Of course it prevents the business from getting access to revenue but it also can be damaging to the business’ reputation since the IRS is sending notice to the customer directly. Usually, a Revenue Officer is the IRS agent who would issue these levies and they can be a tough opponent to go up against. However, our team has gone up against several Revenue Officers and been able to successfully put our clients in the best spot possible. Has your business gotten behind on taxes? Call our team today so we can put preventative measures in place and protect your business from being levied!
Liens and levies often get confused as they both can be utilized by the IRS to collect the tax debt. Liens typically are filed against property that the taxpayer owns or has claim to. This protects the IRS’ interest in the property by preventing the taxpayer from selling the property without making any payment toward the balance due. If the IRS files a lien, they will issue a Notice of Federal Tax Lien which does come with appeals rights. If the lien was filed incorrectly, our team can file an appeal to prevent it from attaching to the applicable property. A levy is a more active approach to the IRS collecting the balance due. Typically, these are issued to bank’s where the taxpayer has an account and the IRS will seize the full amount in their account. Or, it can be issued to the taxpayer’s employer where the employer has to withhold a certain amount of the employee’s paycheck each payday and remit it to the IRS. Levies are imminent threats to the taxpayer’s income and available funds. However, we can take action against these as well. Our team will gather the necessary information to attempt to prove to the IRS these levies are creating hardship to secure a full or partial release. Have you been issued a lien or levy? Call our team to assist in getting these tax problems resolved.
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IRS Tax Resolution Roadmap
Meet with us to determine if resolution is the right path and what options might be available.
File power of attorney form and determine if all required returns are on file per IRS guidelines.
Prepare forms that outline all equity in assets and monthly disposable income (MDI) for the three most recent months.
Negotiate to secure resolution-based upon financial analysis.