wage and
bank levies
Expert Guidance
If you do not pay your taxes or make settlement arrangements, the IRS or taxing authorities can levy any property you own or have an interest in.
A levy is the IRS’s or state taxing authority’s way of getting your immediate attention. Levies are used to seize large portions of your wages and other assets you have. This includes checking accounts, autos, stocks, bonds, boats, paychecks, and even Social Security checks.
Below are a few of the most common types of levies.
Wage Levies
If the taxing authority levies your wages, a portion will be seized each pay period until you make arrangements to pay the tax, actually pay the tax, or get the levy released by other means, such as demonstrating economic hardship.
Bank Levies
A bank levy is when the IRS seizes funds from your bank account to satisfy unpaid tax liabilities. Before the funds are remitted to the IRS, the bank must freeze the funds for 21 days pursuant to Internal Revenue Code and Treasury Regulations to give you time to contest any potential errors or demonstrate economic hardship.
Real and Personal Property Levies
If the taxing authority levies your property, they can sell your interest in the property at an auction and apply the proceeds to your tax debt. A levy will continue until the asset is wiped out, at which point the taxing authority will move on to the next asset until the tax debt is fully paid or economic hardship is demonstrated.
Economic Hardship: Pursuant to Vinatieri v. Commissioner, 133 T.C. 392 (2009) decision and IRS Chief Counsel, the IRS must release a levy if it determines that the levy is creating an economic hardship due to the financial condition of the taxpayer. Economic hardship exists when you cannot pay your reasonable basic living expenses due to the levy, and specific financial statements and substantiation must be prepared and filed as proof.
If you have just been hit with a levy, or you have received a Final Notice of Intent to Levy from the IRS, reach out to Sunshine Tax Relief ASAP. Time is of the essence when levies are in play.
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