A tax levy is a seizure of an individual’s property in order to pay off his tax debt. In such cases, the Internal Revenue Service has the right to seize wages, rental income or retirement accounts, and any type of personal property, including vehicles and homes.
Several requirements must be met before the IRS can levy property, including a tax assessment, sending a notice that demands payment, the individual’s refusal to pay the tax and waiting at least 30 days after the IRS sends a final notice. In cases where the IRS determines that the levy may severely impact the individual’s livelihood, it can release the levy. However, the release of the levy does not mean that the individual becomes exempt from paying the tax debt. In such cases, the IRS typically works with the individual to establish a viable payment plan.
When the IRS seizes property, an individual can contact the employee who was in charge of the seizure or ask an IRS manager to review his case. He can also request a Collection Due Process within 30 days of receiving the levy notice to discuss matters such as collection options, not being able to dispute the liability or having paid the owed tax amount before receiving the notice. After the Office of Appeals issues a determination, the individual can contest it within a period of 30 days.