ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

IRS Levy - What You Need to Know

Updated on May 12, 2011

IRS Levy

An IRS levy can be a serious consequence for individuals who fail to pay their taxes on time or default on an agreed payment plan with the Internal Revenue Service. Generally an IRS levy is often a last step that is not needed for people who settle debts and don’t ignore letters from the organization. The Internal Revenue Service states that they will not issue levies unless three factors are met. The first factor is that the person just didn’t pay the taxes owed by the due date. The second factor is that the person received a letter known as Demand for Payment. The Internal Revenue Service sends out a letter stating that the individual owes a certain amount and it must be paid within a certain time frame or that person must come up with an agreed upon payment plan.

If the Internal Revenue Service doesn’t hear from the individual then a second notice is sent out, known as Final Notice. The Final Notice states that they will issue an IRS levy 30 days from when the person received the letter. The individual will then be given the option to request for a hearing if he or she chooses to do so. Then if these three factors have been met and an individual still ignores contact from the Internal Revenue Service, then an IRS levy or lien will begin.

IRS Levy – What Can be Levied

An IRS levy can be placed upon a person’s wages, any type of government refund, stocks, savings bonds, savings and-or banking accounts, Social Security income and other forms of assets. Boats, vehicles, motorcycles and other items may also be subject to seizure. Generally what happens is the Internal Revenue Service will order a wage garnishment to an individual’s employer. According to information about the Federal Payment Levy Program, generally about 15 percent of wages are garnished per pay period; however, the Internal Revenue Service may look into other factors before issuing a 15 percent wage garnishment, such as funds that are owed to decide on a percentage that may be less.

If a person is self-employed where a wage garnishment cannot be issued then an IRS levy may be placed on a bank and-or savings account. Funds that are available in either type of accounts will be placed in a freeze period. What this means is that the account holder to the banking or savings accounts will be unable to access available funds. What it also means is that the individual or individuals on the account won’t be able to take any of the funds out until a levy is lifted. The Internal Revenue Service expects that the person or persons on the account to contact them within 21 days to settle the matter, if they fail to do so then funds that are in accounts will be removed that is owed. The Internal Revenue Service can also seize funds for penalties and interest that have accumulated to satisfy the debts.

If a wage garnishment and banking assets cannot be taken for a particular reasoning then the Internal Revenue Service will begin proceedings to seize or put liens on other forms of assets such as a house, car, property or any other belongings to satisfy the debt or debts.

An IRS levy means you owe Uncle Sam and he comes to collect. Photo courtesy of bjearwikie of sxc.hu
An IRS levy means you owe Uncle Sam and he comes to collect. Photo courtesy of bjearwikie of sxc.hu

IRS Levy Conflicts

Through out the years, a great deal of individuals have tried to battle the Internal Revenue Service on the grounds that they have no authority or there is no law that states that income taxes must be paid. As a result, many individuals have lost their homes and other assets to seizure and some have even had to serve jail time. 

What You Should Do About an IRS Levy

If you have received notices from the Internal Revenue Service and cannot come up with the funds or have no way to paying then you may be able to work out a payment plan. Consider contacting the nearest Public Welfare office or Attorney Bar Association in your area to see if you qualify for legal aid or to find an attorney who may work pro-bono to help you through your case. It may be especially helpful to speak to attorney to protect your assets and rights through the ordeal with an IRS levy and other seizures.

Reference for IRS Levy – What You Need to Know:

IRS.gov

Comments

    0 of 8192 characters used
    Post Comment

    • profile image

      Mark Randall 

      7 years ago

      It is important to remember that the IRS is always going to get the money that is owed to them. By avoiding the situation, it will usually only make things worse and sometimes even more expensive. If you are unsure what steps need to be taken, you can always seek professional help to get you through the process.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)