Removing a Tax Levy

An IRS levy involves the seizure of an individual’s property or funds to satisfy an unpaid tax debt. It is one of the final collection actions taken by the IRS. A levy can be placed on a bank account, retirement account, or even your wages.

Removing a Levy from Wages

If the IRS has placed a levy on your wages, you can have it removed by making arrangements to pay the tax debt. Also, the levy may be automatically released if the statute of limitations on your debt expires. The statute of limitations is typically ten years from the date the IRS assesses your balance.

You can request a Collection Due Process hearing within 30-days of the date on your levy notice. The IRS will not proceed with a levy until this hearing has concluded.

The IRS then contacts the individual’s employer, when a taxpayer’s wages are going to be levied. Employers get at least one pay period after receiving Form 668-W, Notice of Levy on Wages, Salary and Other Income before they begin taking funds from the employee’s wages to send to the IRS. During this period, the taxpayer is encouraged to contact the IRS to resolve his or her tax issue.

Removing a Levy from Bank Account

If the IRS puts a levy on your checking or savings account, your bank is required to hold the amount for 21 days. During this period, any issues about the ownership of the account can be resolved. After the 21-day period, the bank sends the levied funds to the IRS.

If the levy on your wages or bank account is causing you financial difficulties, you may be able to get it corrected. You can speak to an IRS agent on the phone number included on your collection notice to discuss your options.

You can typically request a payment plan to resolve your tax debt over time. The fastest way, however, is to pay the balance in full.

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