What Is A Levy?
A Levy is defined as the seizure of money or property to satisfy a legal obligation. The obligation must be one that has been adjudicated by law. The IRS must follow a certain procedure to obtain the right to Levy. In fact the IRS rarely makes mistakes in its levy procedure. If a Levy is issued, things are serious.
When you get a Notice of Intent to Levy, you hire someone to help.
The Levy is the third gradient of collection by the IRS. The first gradient is a series of letters and notices. The second gradient is the filing of a lien. The third gradient is the Levy. The IRS may first use a Levy as a wake-up call that they now seriously intend to collect. A Notice of Intent to Levy is issued when earlier gradients have been unsuccessful. Following the Notice of Intent to Levy is an actual Levy.
In our experience, the target chosen for a first levy is often a minor one, such as a little-used savings account or a job you had several years ago. That’s when you can be certain that the main object the IRS seeks is communication with you (or with you through us.)
What Happens in the Event of a Levy?
A Levy is a serious collection tool. The tax authority may go after your main checking account, your business receivables, or your house. You may be left without funds, or it could kill your business. We once had a team of IRS collection men go into a doctor’s office and interview the waiting patients about how much each owed to the doctor. Such an instance is rare, but it is an example of why you want good communication to occur early in the process.
There is now an appeals process from a Notice of Intent to Levy and from a Levy, but in the instance of a Levy, your accounts may be frozen.
On a Levy, timing is everything. When you get a Notice of Intent to Levy, you hire someone to help. If you wait for the Levy to come, it may be too late.