A levy is a legal seizure of your property to satisfy a tax debt. Refusal to pay the tax will result in the IRS issuing a levy after they assess the tax and send a tax bill or a Notice and Demand for Payment.
If you still refuse to pay, then the IRS will issue a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days before the levy. The IRS may give you this notice in person, leave it at your home or business, or send it to your last known address by certified or registered mail with return receipt requested.
Therefore, failure to pay or make suitable arrangements to settle your taxes may force the IRS to levy your assets. The IRS can take your property that is held by a third party such as your wages, bank accounts, and rental income. In addition, the IRS can seize and sell a property you own such as your house.
Levies on wages and salaries are continuous until released. Some of the employee wages are exempt from levy. The employer is required to give a Statement of Exemption and Filing Status. The employee is required to complete and return to the employer within three days. Once completed, the employer will pay an employee the amount exempt from levy.
A levy on a bank account has a 21-day waiting period before the money can be turned over to the IRS. The 21-day waiting period gives the taxpayer time to contact the IRS and arrange to pay the tax or to notify them of errors in the levy. There is no need to run and close your bank account. Normally, the levy does not affect funds deposited into the account after the date of levy. Funds in your account as of the date and time of levy will be sent to the IRS if no release of levy is received within the 21 days of a levy.
In conclusion, an IRS Levy allows for seizure of the taxpayer’s property to satisfy the tax debt. If you need help with an IRS Levy or other IRS collection issue in the Memphis, TN Metro Area, do not hesitate to contact me at (833) 227-8292, or you can find us online at www.mcdonald.tax.