If you’ve ever had to deal with the IRS for anything beyond filing your annual taxes, getting a refund, or paying what you owe, you know it can be quite overwhelming. This is especially the case when the word “levy” starts to appear on mail from the IRS.
What Is a Tax Levy?
A tax levy is one of the most powerful ways the IRS can collect unpaid taxes.
According to the official IRS website:
“A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a legal claim against property to secure payment of the tax debt, while a levy actually takes the property to satisfy the tax debt.”
Sometimes, a tax levy gets confused with a tax lien.
The Difference Between a Tax Levy and a Tax Lien
For more clarification: A tax levy goes a step further than a tax lien. The IRS delves deeper into the explanation:
“The Internal Revenue Code (IRC) authorizes levies to collect delinquent tax. See IRC 6331. Any property or right to property that belongs to the taxpayer or on which there is a Federal tax lien can be levied, unless the IRC exempts the property from levy.”
With a levy, the IRS can seize assets that include but are not limited to
- Vehicles
- Wages/salary
- Dividends
- Bank account funds
- Social security benefits
- Business assets
- Real estate/Rental income
- 401K Savings or other retirement accounts
A levy can create immediate financial hardship, which is why it is critical to act quickly if you receive notices from the IRS.
Examples of Situations Where a Tax Levy Can Be Issued
The IRS may issue a levy in a variety of situations involving unpaid tax debt. Some common examples include:
Wage Garnishment
If you fail to pay back taxes, the IRS may levy your wages. This means a portion of your paycheck can be withheld directly by your employer and sent to the IRS.
Bank Account Levy
The IRS can freeze and seize funds from your bank account. Typically, the bank must hold the funds for a short period before transferring them to the IRS, which may provide limited time to resolve the issue.
Seizure of Business Assets
Businesses with unpaid employment or payroll taxes may face levies against business bank accounts, receivables, equipment, or other assets.
Social Security Benefit Levy
In some circumstances, the IRS can levy a portion of Social Security benefits to collect unpaid taxes.
Property Seizure
The IRS may seize physical assets such as vehicles, boats, or real estate when tax debts remain unresolved.
How Michael Lapidus Can Help
If you have received notices about a levy, it’s not too late to take action. Michael Lapidus brings extensive experience helping individuals, businesses, and organizations resolve complex tax disputes and collection matters.
A graduate of Columbia University with a B.A. in mathematics, Michael earned his law degree from the Washington College of Law and later obtained an LL.M. in taxation from the Georgetown University Law Center.
Michael can help you with a wide range of tax matters, including:
- IRS disputes
- Income tax collections
- Employment tax issues
- Offers in compromise
- Penalty abatement
- Tax debt resolution
- And more
Michael understands how stressful IRS collection actions can be and works closely with clients to develop practical strategies tailored to their specific financial and legal circumstances.
Are you trying to work through an IRS tax levy without legal representation? You don’t have to do it alone. Michael takes a personal, hands-on approach focused on achieving the best possible outcome for his clients.