Levies
The IRS can legally seize your property to satisfy your tax debt. They following three conditions must be met before the IRS can proceed with a levy:
- You must first be sent a Note and Demand for Payment;
- You then do not pay the tax; and
- You are sent a levy notice called a Final Notice of Intent to Levy and Notice of your Right to a Hearing at least 30 days before the levy. You will then have 30 days to request a Collection Due Process Hearing. The IRS may not proceed with any levy action until after 30 days have passed and you have not requested a hearing or until after your scheduled hearing or the time has elapsed to appeal the results of your hearing. The only exception to this requirement is when the IRS levies your state tax refund. You may receive the Notice after your refund is levied and the IRS is allowed to levy your state tax refund, even if you request a hearing.
If you do not pay your taxes or set up a collection alternative, the IRS may levy your paycheck, bank accounts, retirement accounts, or any property being held by third parties. They may also seize and sell any property that you own, including your home.
Most levies only attach to your rights to assets that exist when the levy is served. The exception to this is a wage garnishment which will not end until the debt is paid in full, the levy is released (usually because you have set up a collection alternative), have filed a bankruptcy petition, or the Statute of Limitations on collections has expired.