A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a claim used as security for the tax debt, while a levy actually takes the property to satisfy the tax debt.
If you do not pay your taxes (or make arrangements to settle your debt), the IRS may seize and sell any type of real or personal property that you own or have an interest in. For instance,
* The IRS could seize and sell property that you hold (such as your car, boat, or house), or
* The IRS could levy property that is yours but is held by someone else (such as your wages, retirement accounts, dividends, bank accounts, licenses, rental income, accounts receivables, the cash loan value of your life insurance, or commissions).
The IRS usually levies only after these three requirements are met:
* The IRS assessed the tax and sent you a Notice and Demand for Payment;
* You neglected or refused to pay the tax; and
* The IRS sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy. The IRS may give you this notice in person, leave it at your home or your usual place of business, or send it to your last known address by certified or registered mail, return receipt requested.
You may ask an IRS manager to review your case, or you may request a Collection Due Process hearing with the Office of Appeals by filing a request for a Collection Due Process hearing with the IRS office listed on your notice. You must file your request within 30 days of the date on your notice. At the conclusion of your hearing, the Office of Appeals will issue a determination. You will have 30 days after the determination date to bring a suit to contest the determination.
Levying your wages, federal payments, state refunds, or your bank account.
If the IRS levies your wages, salary, or federal payments, the levy will end when:
* The levy is released,
* You pay your tax debt, or
* The time expires for legally collecting the tax.
If the IRS levies your bank account, your bank must hold funds you have on deposit, up to the amount you owe, for 21 days. This holding period allows time to resolve any issues about account ownership. After 21 days, the bank must send the money plus interest, if it applies, to the IRS.
Filing a claim for reimbursement when the IRS made a mistake in levying your bank account.
If you paid bank charges because of a mistake the IRS made when it levied your account, you may be entitled to a reimbursement. You will have 30 days to appeal the determination to the Tax Court.
For more information, or to set up an initial consultation, contact
Charles T. Dillon, Esq.
504 Baltimore Avenue
Towson, Maryland 21204
Tel: (410) 321-7696
Tax, Business, and International Legal Services