An IRS levy is a legal action that allows the IRS to seize a taxpayer’s assets, such as bank accounts, wages, or personal property, to satisfy unpaid tax debt. Levies are one of the most aggressive collection tools used by the IRS and are typically issued after multiple notices have been sent to the taxpayer, including a Final Notice of Intent to Levy.
Common forms of levies include:
- Wage garnishment, where a portion of the taxpayer’s paycheck is sent directly to the IRS.
- Bank account levy, where the IRS freezes and seizes funds from the taxpayer’s bank account.
- Seizure of property, such as cars, homes, or other valuable assets.
Taxpayers can stop a levy by paying the full tax debt, entering into an Installment Agreement, or submitting an Offer in Compromise. In some cases, taxpayers may request a Collection Due Process (CDP) hearing if they believe the levy is unjustified or they want to negotiate a different resolution.
Levies can cause significant financial hardship, so it’s important for taxpayers to respond quickly and take action to resolve their tax debt.