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IRS Liens And Levies

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IRS Property Liens, Bank Levies and Wage Levies - The Gloves Are Off

An effective method of collection by the IRS is the lien and the levy but it can be a financial nightmare for anyone who is unlucky enough to be at the receiving end.  A taxpayer may face one or both of these government collection activities due to an unpaid tax debt.    A levy is a seizure of your property to satisfy a tax debt.  The IRS is not required to go to court to seize your property or to file a lien against your property.  A lien is filed by the IRS in order to protect the government’s interest in an unpaid tax debt. 

Three requirements must be met before a valid tax lien occurs:

(a) A valid tax assessment must be made;
(b) The taxpayer must be given notice and demand for payment within 60 days of the assessment;
(c) The taxpayer must fail to pay the amount assessed. 

Notice of the recording of the lien is not one of the requirements.

Similarly, before a levy occurs the IRS must go through 3 specific steps before a levy occurs:

(a) The IRS must send a “Notice and Demand for Payment”;
(b) Taxpayer neglects or refuses to pay the tax;
(c) The IRS sends the taxpayer a “Final Notice of Intent to Levy along with your rights to a hearing at least 30 days prior to the levy.  The notice may be given in person, left at your home or your usual place of business or sent to your last known address by certified or registered mail, return receipt requested.

Levies and Seizures

Levies may be divided into two categories: 

The first are levies directed at the taxpayer that cover property owned by the taxpayer, often referred to as seizure.
The second category are levies served on third parties who owe the taxpayer money or control assets of of the taxpayer.   Examples of these are banks or similar institutions that hold money or assets on behalf of the taxpayer (checking, savings, etc.), insurance companies that owe commissions to an agent for sales of their products, employers that owe wages to the taxpayer (their employee) . . . etc. etc. 

The IRS can be very creative in finding third parties to levy money from.  For example, in the case of a business that takes credit cards from their patrons, such as a restaurant, the IRS may levy the vendor of Mastercard, Visa, American Express etc. that clears the transaction and credits the business for the business’s sales.  In that case, the restaurant’s vendor receives the payments but rather than crediting the restaurant’s account with the value of the sale, it sends the proceeds to the IRS.  Obviously, if the levy is not stopped, it spells death to the restaurant or other business if the business is highly dependent on income generated by credit sales. 

Gilland Law Firm is well experienced in stopping levies but the taxpayer must take immediate action.

On a wage levy, also called a wage garnishment, the IRS will leave very little in your paycheck to survive, and there’s a good chance that it will not be enough to pay bills. You may not be able to pay your car payment, house payment, minimum card payments, or other important monthly commitments.  On the other hand, the wage levy can be as small as 15% as in the case of a social security levy while in the case of federal vendors, the IRS can levy 100%.

It is best to deal with the IRS and solve the matter before you are faced with an IRS lien or Levy.  However, if you are served with one notice of lien or Levy, your next best alternative is to contact Jim Gilland a professional who is familiar with dealing with the IRS and can help take the worry and devastation out of negotiating with the IRS.

As a local Salt Lake Tax Attorney concentrating in IRS Problem Resolution, I can help release your IRS liens & levies or negotiate a settlement to your IRS tax problems. Please call Gilland Law for your free consultation at 801-444-9302.

Attorney Jim Gilland Is Experienced, Trustworthy and Authorized to Represent Clients In Court of Law If Needed
Utah State Bar
Member Since 06/14/1996
Member Utah Bar Association - Tax Attorney Jim Gilland
Gilland Law Firm, PC, Attorneys & Lawyers, Clearfield, UT
United States
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Authorized To Represent Clients In US Tax Court
United States Court Of Appeals
For The 10th Circuit
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