Federal Tax Levy Collection Actions in Detail (Part III)
Examples of property the IRS can seize (“levy”)
· Wages, salary, or commission held by someone else. If the IRS seizes your rights to wages, salary, commissions, or similar payments that are held by someone else, they will serve a levy once, not each time you’re paid. The one levy continues until your debt is fully paid, other arrangements are made, or the collection period ends, or the levy is released. Other payments you receive, such as dividends and payments on promissory notes, are also subject to seizure. However, the seizure only reaches the payments due or the right to future payments as of the date of the levy.
· Your bank account. Seizure of the funds in your bank account will include funds available for withdrawal up to the amount of the seizure. After the levy is issued, the bank will hold the available funds and give you 21 days to resolve any disputes about who owns the account before sending us the money. After 21 days, the bank will send the IRS your money, and any interest earned on that amount, unless you have resolved the issue in another way.
· Your retirement account, including Qualified Pension, Profit Sharing, and Stock Bonus Plans under ERISA; IRAs, Retirement Plans for the Self-Employed (such as SEP-IRAs and Keogh Plans) and the Thrift Savings Plan. Depending on the terms of the plan a levy may attach to the funds in which you have a vested right.
Next week: More examples of property the IRS can seize (“levy”)
(IRS Publication 594 and IRS.gov) (TTT 04/07/2020)