Tax debt accumulates in a variety of ways, but when taxpayer actions, or in this case, inaction, results in a levy, one thing all taxpayers can agree on is that the result can be crippling.

To be clear, levies are not the same as liens. A federal lien give the IRS a claim to taxpayer property to secure the payment of taxes owed.  A levy allows the IRS to legally seize and sell any type of property you own or have interest in including houses, cars, or boats.  The IRS can also levy “property” such as wages, retirement accounts, dividends, licenses, rental income, the cash loan of your life insurance, accounts receivable and bank accounts.  They can levy any of these items to satisfy the tax debt, however wage and bank levies or most common.

The IRS can levy any account the taxpayer has signature authority over. Once a bank levy is served, a bank must wait 21 calendar days before sending payment. This is considered a holding period. This period allows time to settle disputes about ownership of bank accounts, or allow time for the bank levy to be released or to have the levy amount decreased. For third parties who have funds in the levied account, the bank cannot be liable for any amount, even if the third party proves the funds in the levied account did not belong to the taxpayer.

A levy results only after a taxpayer has neglected to pay their tax and disregarded a "Notice and Demand for Payment" and the "Final Notice of Intent to Levy and Notice of Your Right to a Hearing". After receipt of the final levy notice, response must take place within 30 days. The levy ends if the taxpayer pays the tax debt, the levy is released, or time expires to legally collect the tax.

To avoid a levy, it is important to pay taxes, remain in compliance with the IRS, or to respond to IRS notices promptly. People who have ignored their tax debt only to find themselves impacted by a levy quickly realize they are in over their heads. At this point, a safe choice is to contact tax professionals such as StopIRSDebt who are familiar with solutions to bring taxpayers into compliance. Because levies can be devastating on family finances, it is important to reverse the levy as quickly as possible.

Taxpayers have rights when it comes to a tax levy. Finding an aggressive tax professional to fight for your rights with the IRS can be a time-saving and stress-reducing option.