An IRS levy is the process where the IRS takes money from a third party that is owed to the taxpayer.  Any type of property can be levied. For example, if the IRS levies wages, that means the IRS gets most of the taxpayer's paycheck.

Most levy notices are computer generated.  The IRS generally must send a notice of intent to levy at least 30 days before the actual seizure.  Once IRS issues a levy on a bank account, it is effective for 21 days.  An IRS levy on employee wages is continuing in nature, meaning the levy is indefinite until the IRS removes it.  Employers have the right to fire employees who get hit with levies by the IRS.  Some employers actually exercise this right. 

We have seen the IRS levy customers of self-employed people.  For example, we are aware of one day care center where the IRS levied the payments owed by the parents to the day care center.  Over two hundred parents of little toddlers were levied on account of unpaid tax debts of the day care center.

Since many of the wage levies are computer generated, mistakes are not unknown.  Sometimes the taxpayer does not owe the tax.  Nevertheless, in the case of a wage levy the employer must submit the levied wage to the IRS until the wage levy is released by the IRS.

Particularly onerous cases involve wage earners who have not filed tax returns, and don't have sufficient information to file the back tax returns.  Unless the case is handled correctly, the IRS will continue to levy wages until the returns have been filed and processed.  Processing can take as long as several months!

Wage levies can be released even if the tax is still owed, but the response must take place quickly.  Professional assistance is usually required.  Call us immediately.

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