IRS Notice of Intent to Levy: What it Means, What to Do

notice of tax levyWhat the Intent to Levy Notice Means

If you have received this notice it is likely something has went really wrong with your taxes and you have not taken any action to resolve that problem. The sending of this letter is a required step of the IRS before they can begin to levy assets. Before the IRS can begin to levy they must satisfy the following conditions set forth by US Congress:

  • Give Written Notice of Intent to Levy explaining your right to appeal the levy
  • The notice must be delivered personally, left at your home, or sent by mail to your last known address 30 days prior to them taking action
  • Must include an explanation of the reason for the levy, the levy process, your collection alternatives

The notice of intent to levy satisfies all of these conditions and once you receive you will have 30 days to take action to prevent the levy from taking effect. If no action is taken the IRS will levy against you and can legally take some of the following assets from you in order to satisfy tax amounts due.

  • Garnish Wages from your employer
  • Take contractor or vendor payments due to you
  • OPM retiirement benefits
  • SSA benefits
  • Employee travel advances
  • Bank accounts
  • Commissions
  • Property
  • Rights to Property
  • Any other thing the IRS thinks they can use of yours to satisfy the tax liability

This is the final threat letter you will receive from the IRS before they do take action. Out of all letters you receive from the IRS, this is the one that you should not ignore because it is only a matter of time before the IRS begins their enforced collection process.

What Can You do About the Intent to Levy Notice?

The easiest thing you can do in order to prevent the IRS from levying your assets is to pay the entire amount owed in full and that will instantly halt any collection actions against you. If you cannot pay the taxes owed in full you have to understand that there are other options. The main reason many taxpayers get into the situation of a tax levy is because they don't realize that the IRS is willing to work with them on some other form of payment arrangement. If you agree that you owe the tax owed and you cannot pay in full then your two main options are either enter into an installment agreement or file for an offer in compromise.

  • Installment Agreement
    As stated in the notice of intent to levy, the IRS says you must pay or make alternative arrangements to pay. The suggested arrangement to pay is typically an installment agreement. With an installment agreement you will be able to make monthly payments towards the total tax amount owed. Once you enter into this agreement it will stop penalties from being charged, only interest will be charged going forward. Once you enter into an installment agreement you will be considered to be in good standing with the IRS as long as you keep up on the monthly payments.
  • Offer in Compromise
    An offer in compromise is a settlement option offered by the IRS that allows taxpayers to compromise their tax debt and settle for less than the total amount they owe. This option is only available to those that are extremely financially burdened. If the IRS accepts this type of filing, you will be considered to be in good standing with the IRS. This filing is a complicated filing and the taxpayer must meet strict IRS requirements in order to qualify.

What if You Don't Agree with the Levy Notice?

At times the IRS makes mistakes and will issue a levy notice when it shouldn't have been issued. If you believe the levy has been issued in error it is important to call the IRS right away at the number that is given on the notice. If you have made prior corrective action, such as entering into an installment agreement or filing for an offer in compromise then it is still important to call the IRS to ensure that your account is being reflected correctly. If you don't agree with the levy it is important that you file for an appeal. Even if you talk to someone over the phone you should still file because your time is limited before the IRS begins to levy and you don't want to risk losing your right to appeal and a phone call is not an official request of appeal.