A Levy is a legal seizure of your property that is used to satisfy a tax debt and is a method the IRS uses to collect back taxes that are not paid voluntarily.  This means they can legally, confiscate (take) property to satisfy a tax debt. 

IRS levies may be used to attach wages, salaries, commissions, rental income,  bank accounts, social security benefits, retirement income, state tax refunds, dividends, stocks, bonds, accounts receivable, surrender value of life insurance, cars, boats, household items and anything else you may own.  In essence, if you own it they have the authority to file a levy and take it, with few exceptions.

The IRS is usually required to make a tax assessment, send the tax debtor a notice that will include the tax bill, a demand for payment a statement of the intent to levy, and an explanation of an individual's Collection Due Process rights 30 days prior to levy. 

Levies against bank accounts and are used to confiscate the lesser of the total amount due or 100 percent of the balance in the account on the day that the bank receives notification.  Post bank notification date deposits, are not subject to confiscation.

The 1997 Taxpayer Relief Act authorizes the Internal Revenue Service (IRS) to collect overdue federal tax debts of individuals and businesses that receive federal payments, by levying up to 15% of each payment until the debt is paid in full.

Generally, IRS tax levies will be released: 

• If you pay the back tax debt including the interest and penalties in full,

• If the 10 year statute of limitations for collections has elapsed,

• If you enter into an installment agreement,

• If you submit an offer in compromise proposal, 

• If the levy will create a hardship that is expected to deprived you of basic living necessities.

• If you can show that releasing the attached property is in the best interest of the government.

• If assessments were made and an attachment was filed after the date of petition for bankruptcy. 

• If IRS tax levies result from a married filing joint return, you may be eligible for innocent spouse relief.  If your wages or refunds have been levied or confiscated to satisfy the liability of a spouse and the debt is not associated with a joint return, you may be eligible for injured spouse relief, and

• At times if, you make an agreement to file back tax returns and expect to have no tax liability.

The release of a levy is usually only a temporary solution and available remedies should be explored to reduce or eliminate the root cause of the levy by amending or filing back tax returns, or submitting an offer in compromise, innocent or injured spouse  or installment agreement proposal.

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