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What is an IRS levy?

An IRS levy is action taken by the federal government to seize property, bank accounts and wages, among other assets, legally in order to satisfy a taxpayer's tax liability. If the taxpayer has not paid or arranged with the IRS to pay a tax burden, the government could initiate a levy against all properties or interest in properties held by the taxpayer. In some cases, the IRS can even seize a tax refund due to the taxpayer from the state of Georgia.

The process requires three things to occur before any levy will actually take place. First, the IRS sends a Notice and Demand for Payment. Second, the taxpayer does not pay the tax. Third, the IRS sends a Final Notice of Intent to Levy and Notice of Your Right to A Hearing. This should be sent at least 30 days before levy action is initiated.

When a levy results in unbearable hardship to a taxpayer, he or she may ask for the levy to be removed. This does not exempt the person from the liability owed, and a tax payment plan may be negotiated with the IRS. Within 30 days of receiving notice, the taxpayer can ask for a hearing with the Office of Appeals. The taxpayer may also ask an IRS manager to review the case.

Any taxpayer facing an IRS levy may determine that it is in his or her best interest to solicit assistance from a tax attorney. The attorney may work for the taxpayer to help ensure that his or her rights are maintained and to reach a sustainable resolution on the amount that is determined to be owed.

Source: IRS, "Levy", September 16, 2014

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