Federal Tax Levy Collection Actions in Detail (Part II)

Reasons the IRS may seize (“levy”) your property or rights to property

If you don’t pay your taxes (or make arrangements to settle your debt), the IRS could seize and sell your property. They will not seize your property to collect an individual shared responsibility payment. They usually seize only after the following things have occurred.

The IRS assessed the tax and sent you a bill,

You neglected or refused to pay the tax, and

they sent you a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days before the seizure.

However, there are exceptions for when the IRS does not have to offer you a hearing at least 30 days before seizing your property. These include situations when:

The collection of the tax is in jeopardy,

A levy is served to collect tax from a state tax refund,

A levy is served to collect the tax debt of a federal contractor, or

A Disqualified Employment Tax Levy (DETL) is served. A DETL is the seizure of unpaid employment taxes and can be served when a taxpayer previously requested a Collection Due Process appeal on employment taxes for other periods within the past 2 years.

If the IRS serves a levy under one of these exceptions, they will send you a letter explaining the seizure and your appeal rights after the levy is issued.

Next week: Examples of property the IRS can seize (“levy”)

(IRS Publication 594 and IRS.gov) (TTT 03/31/2020)