Tax levies

dealing with the IRS

Generally speaking, a taxpayer can have a levy lifted -- removed -- with the proper request. 

A tax levy is an emergency!  If this should happen to you or to your client, the very first order of business should be to contact a tax professional with expertise in the area of tax collections representation.  The professionals at Gill & Company, are well suited to help you are your clients with this type of financial emergency.

Bank levy
A levy is often the first encounter with enforced collection activity that a taxpayer with an outstanding tax debt might encounter.   A notice is served upon the bank or banks that a taxpayer does business with, and the levy instructs the bank to seize the funds that are in your bank account on that day, and hold the money for three weeks, and then remit to the IRS.  During that three week period, it is possible to have the levy lifted, and the money returned, if there is a gross error.  Unlike other levy actions, a levy on a bank account is a one-time hit.  Money deposited even a day after the levy is issued, is not subject to seizure, although, in theory, the IRS could issue another levy to seize those funds, too.

Wage levy
A wage levy is much like a judgment garnishment.  It is served upon the taxpayer's employer, and works like a financial vacuum cleaner, sucking out the taxpayer's wages, each and every payday, until paid in full, or lifted by the IRS.  Certainly this is a situation where immediate intervention is indicated by a tax professional.

In addition to wage and bank levies, there are a number of other levy tools that the IRS uses to a lesser degree, including the levy of accounts receivables from customers of business taxpayers, and the seizure of property, automobiles and real estate.  While rare, these collection activities occur generally when other means of collection have failed, or the taxpayer refuses to cooperate with the Internal Revenue Service.

Generally, tax levies do not appear on credit reports, and once issued, a tax professional can often have the levy lifted, with the offer of a voluntary payment arrangement or other action.  A bankruptcy filing will in most all instances, stop and lift a tax levy, and is often the course of final resort.  

Wage levies, since they are rather permanent, are most often quickly lifted with cooperation.  Bank levies, since they are a one-time hit, are usually "halted" to prevent further seizure, but are seldom reversed to free up monies being held, unless the levy was issued incorrectly or in error.

Like other tax problems, the advice, counsel, and representation of a tax professional is very important.  A tax professional with experience representing clients before the IRS with tax collection matters, can properly develop a strategy to get the IRS off the back of a taxpayer, and will take the emotions out of dealing with the IRS -- which is often more painful than a trip to the dentist.

For more information on how the tax professionals at Gill and Company can assist you with IRS levies, or other tax problems, please click here to learn more.