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What is an IRS Levy?
If you have an outstanding tax debt, the IRS may seize and sell real and/or personal property you currently own in an attempt to settle this debt.
An IRS levy refers to the legal seizure and sale of property owned by the taxpayer in an attempt to collect a debt. An IRS levy differs from a lien, although both can be utilized by the organization to collect monies owed. A lien refers to security for a tax debt, while levies involve physical seizure of property in order to pay a tax debt.
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The following property types may be seized and sold as part of an IRS levy:
- Property you hold (i.e. homestead, rental property or vacation property, boats, cars)
- Property you own but which is held by someone else (i.e. employment wages, retirement accounts, bank accounts, rental income, cash value within life insurance policies, commissions, licenses and accounts receivable).
An IRS levy typically occurs after these requirements have been satisfied:
- A Notice and Demand for payment has been sent to the taxpayer assessing the tax debt owed
- The taxpayer has either refused or neglected to pay this tax debt
- A Final Notice of Intent to Levy and Notice of Your Right to a hearing was sent to the taxpayer at least 30 days prior to the scheduled levy date
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