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To the IRS, What is a Levy?

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  • Written By: Tricia Ellis-Christensen
  • Edited By: O. Wallace
  • Last Modified Date: 28 November 2014
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An Internal Revenue Service (IRS) levy is a garnishment of wages, additional assessment of income taxes or government payments like social security and disability. A levy can also refer to the ability of the IRS to claim monies owed by seizing your bank account or by selling your assets. An IRS levy can occur as early as ten days after a demand for payment on taxes owed. Normally, one can avoid a levy by proposing and sticking to a reasonable payment plan.

The IRS tends to employ a levy when people either ignore requests for payment of taxes or don’t stick to proposed payment plans. If a tax debt is very large, a proposed payment plan may simply be too modest for the IRS and they may choose to levy your earnings or assets. Usually, the IRS is willing to work with people who owe tax debt because it is much less expensive to have a debt collected over time. The IRS can, however, levy fees and fines or interest if a debt needs to be paid off in payments.

Once the IRS has chosen to levy a bank account or wages, there are few choices left for the person. It is usually at this stage that making payment plans is most difficult and the IRS is most likely to do whatever they wish with money you earn. This can leave some people without sufficient means for support.

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The key is to avoid an IRS levy is by working with the IRS from the start if one owes a tax debt. Alternately, when one owes a very large tax debt, one may want to consider hiring a lawyer to work as mediator in establishing a reasonable payment plan. Delaying working with the IRS is generally the most common reason for the IRS to levy wages or property.

Other collection agencies of the federal government are also empowered to levy wages, refunded taxes or social security and disability payments. For example, unpaid student loans that remain unpaid can result in wage garnishment or deductions from tax refunds. Again working with the government agency to which one owes money is often the easiest way to remain in control of one’s earnings and assets.

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anon295340
Post 9

How far back can the IRS levy wages if you have not filed for over 12 years? Like, if you had a business at that time and have been in between jobs ever since until recently, and are now making good money?

anon178275
Post 8

My boyfriend just had his assets seized. Can they come after me since we live together?

anon61767
Post 7

The federal prison is full of people who thought that the IRS/federal tax was "voluntary". There are also plenty of people living in caribbean and other places who didn't pay for years and years because they didn't want to pay this "voluntary" tax, and had to leave because the IRS was going to take everything they had.

If you get something in the mail from the IRS, open it. If you do not know what it is, go down to the local IRS office! They are not monsters. Most of the time, they will work with you and help you get things straight.

It's when you avoid them or are afraid of going down there so you ignore it that things become bad. If you have not filed, file. If you haven't filed for many years, go down to the IRS and get all of your w2'w, 1099's, etc. from each year, and the back years; the forms are on their website. Then file them.

People get themselves in more trouble by ignoring and avoiding. I know, I did myself, and when I finally had to resolve it due to a huge levy, it was almost painless and I filed the return and wound up getting a $500 refund. That's from a 21K levy! Most of it penalty/interest.

What people don't realize is if you have four in your family say, and you don't file, they file for you. They take your income, give you one exemption for you, subtract it from the income, and look on the tax table. That's your tax. Then they add interest and penalty.

Forget that you have other deductions (family members) or mortgage interest, so it's in your best interest to file old returns. You might be surprised that you owe little to nothing or have a refund.

anon40479
Post 6

don't listen to the person who claims we don't need to pay income tax. relying on tax protester propaganda will only make your life far more miserable. the irs can and will levy your bank account. they can and will garnish any wages or other reported income sources including social security and they can and will seize any form of retirement account (401k, ira's, etc.).

anon39669
Post 5

my boyfriend just got a levy of wages from the IRS. how much can they take?

anon29274
Post 3

Let me comment on the question whether the IRS can levy citizen's assets, social security, bank account, etc. United States Code Title 26, subtitle "A" has no provision for liability of the federal income tax on most citizens of the 50 states. Lawfully and legally, you cannot be compelled to commit perjury and pay a federal income tax on incomes that do not provide a federal payroll. The tax is on federal income. Do you have any? If you volunteer to be a felon by signing a 1040 Form or any other federal tax form under penalties of perjury, admitting to being a recipient of federal income while you do not, you risk being criminally prosecuted even if you made a mistake, as the IRS may see it as an attempt by you to evade some part of the tax. Best thing to do with the federal income tax is to stop paying it by voluntary compliance. No law exists that can make you perjure yourself. How can you be absolutely sure everything on that tax form is true and correct to the best of your belief and knowledge? I know that citizens who are or have been paying income taxes have been caught up with the IRS in owing delinquent taxes and have been threatened with a levy. Well there is good news for you. Unless you are federally employed, the Levy cannot apply to you.

Internal Revenue Code section 6331 (a) only subjects a notice of levy to be served upon a government employer. If you have no government employer then no levy can apply. United States Code Title 42 section 407, prohibits the garnishment or levy of social security benefits. The IRS quotes section 6334 of the Internal Revenue Code for their right to levy social security benefits, but section 6334 is under the direction of a levy as noted in section 6331(a).

anon5634
Post 1

Today I received a tax levy on my Bank account from the IRS which states the bank must hold my account for 21 days. I was on a payment plan with the IRS but it soon became impossible for me to pay them as I am unemployed and am having a very difficult time finding a job due to my horrible credit. I tried calling the IRS but they are closed on weekends. This couldn't have come at a worse time because I am two months behind in rent and I just recently sent my landlord a check for a month's rent which I am now worried will bounce if he tries to cash it. When I call the IRS is it possible they will take away this levy when I tell them how dire my financial situation is? I welcome them to audit me at anytime. what they are doing is going to have me end up on the street. Anyone have any suggestions what I should say?

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