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Publication 594 The IRS Collection Process
an explanation of why your application was denied. If we deny your
request for a withdrawal, discharge, or subordination, you may appeal
under the Collections Appeals Program.
➜ Levy: A seizure of property
While a federal tax lien is a legal claim against your property, a levy is
a legal seizure that actually takes your property (such as your house
or car) or your rights to property (such as your income, bank account,
retirement account or Social Security payments) to satisfy your tax debt.
We can’t seize your property if you have a current or pending Installment
Agreement, Offer in Compromise, or if we agree that you’re unable to
pay due to economic hardship, meaning seizing your property would
result in your inability to meet basic, reasonable living expenses.
Reasons we may seize (“levy”) your property or rights to property
If you don’t pay your taxes (or make arrangements to settle your debt),
we could seize and sell your property. We will not seize your property
to collect an individual shared responsibility payment. We usually seize
only after the following things have occurred.
• We assessed the tax and sent you a bill,
• You neglected or refused to pay the tax, and
• We sent you a Final Notice of Intent to Levy and Notice of Your
Right to a Hearing at least 30 days before the seizure.
However, there are exceptions for when we don’t have to offer you a
hearing at least 30 days before seizing your property. These include
situations when:
• The collection of the tax is in jeopardy,
• A levy is served to collect tax from a state tax refund,
• A levy is served to collect the tax debt of a federal contractor, or
• A Disqualified Employment Tax Levy (DETL) is served. A DETL is
the seizure of unpaid employment taxes and can be served when a
taxpayer previously requested a Collection Due Process appeal on
employment taxes for other periods within the past 2 years.
If we serve a levy under one of these exceptions, we will send you
a letter explaining the seizure and your appeal rights after the levy is
issued.
What you should do if your property is seized (“levied”)
If your property is seized, call the number on your levy notice or 1-800-
829-1040 (individuals) or 1-800-829-4933 (businesses). If you’re
already working with an IRS employee, call them for assistance.
Examples of property we can seize (“levy”)
• Wages, salary, or commission held by someone else. If we seize
your rights to wages, salary, commissions, or similar payments that
are held by someone else, we will serve a levy once, not each time
you’re paid. The one levy continues until your debt is fully paid,
other arrangements are made, or the collection period ends, or the
levy is released. Other payments you receive, such as dividends
and payments on promissory notes, are also subject to seizure.
However, the seizure only reaches the payments due or the right to
future payments as of the date of the levy.
• Your bank account. Seizure of the funds in your bank account
will include funds available for withdrawal up to the amount of the
seizure. After the levy is issued, the bank will hold the available
funds and give you 21 days to resolve any disputes about who
owns the account before sending us the money. After 21 days,
the bank will send us your money, and any interest earned on that
amount, unless you have resolved the issue in another way.
• Your retirement account, including Qualified Pension, Profit Sharing,
and Stock Bonus Plans under ERISA; IRAs, Retirement Plans for
the Self-Employed (such as SEP-IRAs and Keogh Plans) and the
Thrift Savings Plan. Depending on the terms of the plan a levy may
attach to the funds in which you have a vested right.
• Your federal payments. As an alternative to the levy procedure
used for other payments such as dividends and promissory
notes, certain federal payments may be systemically seized
through the Federal Payment Levy Program in order to pay
your tax debt. Under this program, we can generally seize up to
15% of your federal payments (up to 100% of payments due to
a vendor for property, goods or services sold or leased to the
federal government). We will serve the levy once, not each time
you are paid. The levy continues until your debt is fully paid, other
arrangements are made, the collection period ends, or the IRS
releases the levy. The federal payments that can be seized in this
program include, but aren’t limited to, federal retirement annuity
income from the Office of Personnel Management, Social Security
benefits under Title II of the Social Security Act (OASDI), and
federal contractor/vendor payments.
• Your house, car, or other property. If we seize your house or other
property, we will sell your interest in the property and apply the
proceeds (after the costs of the sale) to your tax debt. Prior to
selling your property, we will calculate a minimum bid price. We
will also provide you with a copy of the calculation and give you
an opportunity to challenge the fair market value determination.
We will then provide you with the notice of sale and announce the
pending sale to the public, usually through local newspapers or
flyers posted in public places. After giving public notice, we will
generally wait 10 days before selling your property. Money from the
sale pays for the cost of seizing and selling the property and, finally,
your tax debt. If there’s money left over from the sale after paying
off your tax debt, we will tell you how to get a refund.
Property that can’t be seized (“levied”)
Certain property is exempt from seizure. For example, we can’t seize
the following: unemployment benefits, certain annuity and pension
benefits, certain service-connected disability payments, worker’s
compensation, certain public assistance payments, minimum weekly
exempt income, assistance under the Job Training Partnership Act,
and income for court-ordered child support payments.
We also can’t seize necessary schoolbooks and clothing, undelivered
mail, certain amounts worth of fuel, provisions, furniture, personal
effects for a household, and certain amounts worth of books and tools
for trade, business, or professions. There are also limitations on our
ability to seize a primary residence and certain business assets.
Lastly, we can’t seize your property unless we expect net proceeds to
help pay off your tax debt.
How to appeal a proposed seizure (“levy”)
You can request a Collection Due Process hearing within 30 days from
the date of your Notice of Intent to Levy and Notice of Your Right to a
Hearing. Send your request to the address on your notice. For more
information, see Form 12153, Request for a Collection Due Process
or Equivalent Hearing. At the conclusion of your hearing, the Office
of Appeals will provide a determination. You’ll have 30 days after the
determination to challenge it in the U.S. Tax Court. If Collection Due
Process rights aren’t available for your case, you may have other
appeal options, such as the Collection Appeals Program.
Reasons we “release” a levy
The Internal Revenue Code specifically provides that we must release a
levy if we determine that:
• You paid the amount you owe,
• The period for collection ended prior to the levy being issued,
• It will help you pay your taxes,
• You enter into an Installment Agreement and the terms of the
agreement don’t allow for the levy to continue,
• The levy creates an economic hardship, meaning we’ve
determined the levy prevents you from meeting basic, reasonable
living expenses, or
• The value of the property is more than the amount owed and
releasing the levy won’t hinder our ability to collect the amount
owed.
We will also release a levy if it was issued improperly. For example, we
will release a levy if it was issued: