The Tax Levy is probably the IRS’s most potent tool to deal with delinquent taxpayers. It quickly gets the Taxpayer’s attention and is the most common reason that new clients come to our Richardson, TX office.
A regular levy is a levy that is effective against only the taxpayer’s property being held at the time the levy is served. Examples are Bank levies, levies on receivables, and retirement accounts. As an example, here’s how a regular levy works for a bank levy. Banks will hold money for days before sending it to the IRS.
- On Day 1, bank receives a notice of levy for a customer. At the time the levy was received, the bank balance was $100. The next day, the customer gets a deposit for $25,000. The amount that is held by the bank to forward to the IRS is $100, the amount at the time that the levy was received. After 21 days, the bank will forward the funds to the IRS. These 21 days are an opportunity to have the lien released.
A continuing levy remains in place until released. Examples are wages and regularly paid commissions (An Example is Real Estate Commissions). The difference for a continuing levy is illustrated with the following example.
- An employer is served a levy for an employee. The owe the government $10,000. Based on the calculation of the amount to be levied permitted under the law, the employer withholds $1,000 per pay period. The employer will continue to levy the employee until notified by the government to stop.
Have you been levied or are you under threat of a levy? We’ve been able to help numerous taxpayers such as yourself get levy relief. If you need help with a levy or IRS Collection issue, we’d be happy to talk with you. Please give me a call at (972) 821-1991 or email me at bob@jablonskyandassociates.
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