What is a Tax Levy?
A tax levy is when the IRS takes your assets or property to pay for your outstanding tax bill. This happens if you fail to pay your tax debt or at least set up some payment agreement with the IRS. It is the most strongest collection method used by the IRS and this collection right is unique to the IRS. Don’t forget, the IRS is the fiercest debt collector in the U.S.

Will the IRS Levy Your Assets?
Before the IRS will start to levy your assets, you would have received a ton of demands and notices. The only time the IRS will attempt to seize your assets is if any of the following things have already taken place:
- You received a notice requesting payment on your tax debt.
- You never replied to the notice or missed your arranged payments.
- The IRS notified you of their intent to levy and offered you 30 days to respond or appeal.
After that 30 days expires, the IRS may start to seize your assets. To prevent that from happening, you need to immediately contact the IRS to appeal or hire a tax professional to help you do it. A licensed tax professional has more experience with tax resolution and will be better able to analyze your tax and financial situation to help you pursue the best option.
Exceptions to the 30-Day Levy Notice Requirement
In certain rare instances, the IRS might levy your property or wages even before sending you the Final Notice of Intent to Levy and Rights to a Hearing. They have the power to seize your property without providing a notice beforehand. Here are some of the reasons for why this may happen:

Jeopardy Levy
The IRS may seize your property without warning if they feel that the collection of tax is in jeopardy. For example, if they feel your trying to leave the country, if you’re dissipating assets by moving them outside the country, transferring your assets to other people, or if your “financial solvency appears to be imperiled”.

Disqualified Employment Tax Levy
The IRS is able to serve a Disqualified Employment Tax Levy (DETL) to cover unpaid employment taxes. A DETL can happen if you requested a Collection Due Process appeal on employment or payroll taxes for other periods within the past two years.

Federal Contractors and State Tax Refunds
For federal contractors, the IRS isn’t required to give notice of the levy until after the tax levy ensues. Also, the IRS is able to seize state funds without providing hearing rights 30 days in advance.

What Property Can the IRS Levy?
In most cases, a tax levy starts with the IRS reaching out to organizations or people that pay you. It will inform these entities to send all future payments directly to them. Usually, these individuals or entities comply since if they don’t, the IRS will hold them responsible. It also includes the following:

IRS Wage Garnishment
The most common form of IRS levy is wage garnishment. This is when the IRS will contact your employer and will require them to withhold a percentage of your income. Although your boss won’t fire you over this since that’s illegal, it can still be financially painful and embarrassing. Once wage garnishments start, they remain in place until the debt is paid, you make alternative arrangements with the IRS, or the period for debt collection expires.

IRS Bank Levy
In this collection method, the IRS will get in touch with your bank and request the funds in your account. Normally, you will be give a 21 day grace period to take care of the situation. During that time, any funds in your bank account will be frozen to prevent you from withdrawing or using them.

IRS Social Security Levy
In certain situations, the IRS even has the power to request the Social Security Administration to send them 15% of your payments.

IRS 1099 Levy
If an individual or a business owes money to an independent contractor, the IRS can demand that money be paid to them instead. They can issue multiple 1099 levies to collect on 1099 income. On top of that, the IRS can even contact the tenants living in buildings you own, holder of your retirement account, and basically anyone else who pays you money.

Other Property the IRS Can Seize
The IRS is also able to seize your cars, boats, land, and real estate.

The IRS can also seize real estate, land, cars, and boats. The IRS can take anything of value and sell it (auction it) to cover the tax debt. However, the IRS rarely seizes these types of property. In fact, the IRS will only do this in extreme situations.

How Can You Stop a Tax Levy?
If you ever receive a notice from the IRS, you need to take immediate action. Sometimes the best way to return to good standings with the State or IRS is to hire a tax professional. In order to set up a resolution with the IRS or State, you need to get into filing compliance. It’s really difficult to get your assets back once the IRS seizes them. That’s why it’s crucial to take quick action.

Author's Bio: 

I am Amelia Grant, journalist, and blogger. I think that information is a great force that is able to change people’s lives for the better. That is why I feel a strong intention to share useful and important things about health self-care, wellness and other advice that may be helpful for people. Being an enthusiast of a healthy lifestyle that keeps improving my life, I wish the same for everyone.

Our attention to ourselves, to our daily routine and habits, is very important. Things that may seem insignificant, are pieces of a big puzzle called life. I want to encourage people to be more attentive to their well-being, improve every little item of it and become healthier, happier, stronger. All of us deserve that. And I really hope that my work helps to make the world better.