A tax levy is a legal action taken by the government to seize a taxpayer’s assets to satisfy unpaid tax debts. The IRS or state tax authorities can impose a levy if an individual or business fails to pay taxes after receiving multiple notices. Levies allow tax agencies to collect unpaid taxes directly from wages, bank accounts, property, or other assets.
A tax levy is enforced when a taxpayer does not respond to IRS or state tax collection notices. The process typically follows these steps:
Tax levies can target different types of assets, including:
Taxpayers can take several actions to stop or release a tax levy:
Ignoring a tax levy can lead to serious financial consequences, including:
To prevent a tax levy, taxpayers should address unpaid taxes promptly and communicate with the IRS or state tax agency.
For more details, visit the IRS website on tax levies.