A tax levy is a legal action that allows the IRS to seize a taxpayer’s assets to satisfy unpaid tax debt. Levies are one of the most aggressive collection tools used by the IRS and can result in the seizure of bank accounts, wages, Social Security benefits, and property. The IRS issues a levy after multiple warnings and notices, including a Final Notice of Intent to Levy.
Tax levies can be placed on:
- Wages through wage garnishment.
- Bank accounts, by freezing and withdrawing funds.
- Real estate or personal property, such as cars or homes.
To stop a tax levy, taxpayers can pay the full amount owed, set up a payment plan, or submit an Offer in Compromise. Taxpayers may also request a Collection Due Process (CDP) hearing if they believe the levy is unjustified or they want to negotiate a payment alternative.
It’s important to act quickly to stop a tax levy, as it can lead to significant financial hardship by reducing access to essential funds and property.