Tax Levy in Redlands, California: Mechanics of an IRS Tax Levy

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We focus on tax related issues, including IRS and California Franchise Tax Board controversies in Redlands and across California.  We deal with taxpayers who have fallen into the IRS Collection Division’s inventory and are dealing with federal tax levies by the Internal Revenue Service (“IRS”).  A question that comes up often is what can the IRS seize?

There are two types of federal tax levies issued by the IRS: a “regular” levy and a “continuing” levy. A continuing levy is a levy issued by the IRS on wages or routinely paid commissions, so it will remain in place until it is released.

“regular” levy issued by the IRS reaches the assets owned by the taxpayer at the moment the levy is received.  For example: Assume Taxpayer owes the IRS $20,000.  Taxpayer has $300 in his bank account on Monday.  Monday at 3:00 pm the bank receives a Notice of Levy from the IRS for the $20,000 that the federal government is owed.  The taxpayer then deposits $10,000 in his account on Tuesday at 10:00 am.  How much does the bank have to send to the IRS on account of the federal tax levy?

The bank will send the IRS the $200, which is the money it had at the moment the levy was received.  The $10,000 deposited on Tuesday would not be reached by the federal tax levy.  The situation is the same with contractors or receivables.  The party that receives the tax levy only pays over to the IRS that amount which it owes the Taxpayer at that moment. 

To illustrate this: If a general contractor receives a notice of tax levy from the IRS for one of its subcontractors, it can only pay that money which was owed to the subcontractor.  If the general contractor did not owe the subcontractor anything (because the job was not complete and nothing was owed under the contract) than the tax levy would not get anything.

If you or your clients have any issues with tax levies issued by the IRS or other federal tax problems please feel free to contact me directly at (909) 570-1103 or by email at

Carlos Samaniego, EA
Enrolled Agent
Licensed by The Department of Treasury to represent taxpayers
Listen to my podcast on Anchor or your favorite podcast app – Click Here

1255 W Colton Ave, #535
Redlands, CA 92374

Ph. (909)570-1103
Fax (909)586-9190


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Sara Wagner
The Woodland Companies - Adams, WI
Stevens Point Rentals

Welcome to ActiveRain, I hope that your participation here helps your business to grow.
Btw, I followed your blog, and would be honored if you followed mine.
Thank You!

Nov 04, 2018 01:33 AM #1
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
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Carlos Samaniego EA welcome to ActiveRain, and congratulations on successfully posting your first blog on this site.

Nov 04, 2018 04:01 PM #2
Bob Crane
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Forestland Experts! 715-204-9671

Welcome to Active Rain, looking forward to reading many more of your posts, let me know if there is anything that I can do to help as you get started here.
All the best of success to you.

Dec 10, 2018 06:24 PM #3
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Carlos Samaniego EA

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