- Right to Appeal: Give you a written notice of the intent to levy and explain your rights to appeal.
- Procedure and Reason behind: Document explaining the reason for the levy, the seizure process, and your options.
- Confidentiality: IRS may deliver the notice personally, leave it at your home or your place of business or send it to your last known address by certified or registered mail, return receipt requested
- You own property (such as cars, homes, and personal property)
- funds in bank accounts
- Employment Wages
- Vendor or Contractor payments that are due to you
- Retirement benefits
- Employee Travel Advances
- Your commissions
- Government retirement benefits from the Office of Personnel Management (OPM)
- State income tax refund or state tax refund
Beyond the bare necessities, the IRS can take virtually anything you own. Remember, you can leave the IRS with little. Publication 1494 explains how to calculate the amount of income that is exempt from levy. It considers your filing status, pay frequency, and the number of exemptions you claimed on your most recent tax return when calculating whether your income is exempt.
The IRS sends various types of notices and letters. The following are the most frequent levy notices:
- CP504 – IRS intends to levy your assets
- CP90 – Final Notice of Intent to Levy (Individuals)
- LT1058 – Final Notice of Intent to Levy
- LT11 – Final Notice of Intent to Levy
- CP297: Final Notice of Intent to Levy (businesses)
The IRS will send you several notifications before seizing your assets before you pay your taxes. At first, you’ll get notifications informing you that you owe money to the IRS.
These notifications will explain how much you owe in addition to interest and penalties. You’ll get notices that you owe money to the IRS in the first place. These notices will explain how much you owe in addition to interest and penalties.
Eventually, the IRS will send notifications informing you that it plans to seize your funds. Notice of levy will be the second to last letter. You have the right to a hearing if this letter arrives. The notice of levy will advise you of your right to a hearing, but it will also mention the levy procedure.
The IRS must follow the proper procedures when sending these notices. If it doesn’t, it cannot begin the levy process. The IRS can seize tax refunds to cover unpaid federal taxes without sending you multiple notifications or providing you with a hearing.
Difference between Tax Levy and Federal Tax Lein
An IRS tax levy is different from a lien. A lien protects the government’s interest in your property when you don’t pay a tax debt, but a levy actually takes the property to pay the tax debt. If you do not pay the amount due or make arrangements to settle your debt, the IRS can seize and sell any real estate and business and personal property that you own or have an interest in.
A levy is a legal seizure of your property to satisfy a tax debt. A levy actually takes the property to pay the tax debt. If you do not pay the amount due or make arrangements to settle your debt, the IRS can seize and sell any real estate and business and personal property that you own or have an interest in.
A lien protects the government’s interest in your property when you don’t pay a tax debt. A federal tax lien comes into being when the IRS assesses a tax against you and sends you a bill that you neglect or refuse to pay it. The IRS files a public document, the Notice of Federal Tax Lien, to alert creditors that the government has a legal right to your property. You have the right to appeal if the IRS advises you of the intent to file a Notice of Federal Tax Lien.