An IRS levy can put you in a bad financial situation because it seizes your property to satisfy an IRS tax debt that you owe. The IRS can levy any property you have, physical or monetary, so it is important to pay tax debt before a levy is placed on you by the IRS.
IRS Levy Requirements
There is no minimum amount of tax debt needed to levy your property or bank accounts. If you owe any past due tax debt, you need to pay or settle the debt. If not, the IRS can levy your property including your house or car, as well as any money you have in bank accounts including rental income, retirement, wages and commissions.
When Does Levy Take Effect
The IRS does have a collection process it uses prior to levying your property for taxes. First, a Notice for Demand for Payment is mailed to you. If it receives no payment, you will be sent a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days before the levy takes place.
Levy on Bank Account
When a levy is placed on your bank account, the bank must hold all deposits coming into the account for 21 days to pay the tax debt. The levy will only expire when all tax debt is paid, levy is released or time expires in legally collecting the tax debt.
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