Jo Willetts, EA
Director, Tax Resources
Updated on: July 07, 2022
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The IRS has many options to collect tax debts. Some of its more infamous tools include federal tax liens, wage garnishment, refund offsets, and levies.
A levy is a legal seizure of your property to pay a tax debt. When the IRS issues a levy, it can seize your wages, funds in your bank account, Social Security benefits, retirement income, and personal property like cars, boats, and real estate.
Levies are one of the last steps the IRS will take to collect tax debt. It won’t be a surprise, either. The IRS will send you multiple notices trying to collect your tax debt before issuing levies
Generally, the IRS will issue a levy only after these three things happen:
If the IRS levies your state tax refund, you may get a Notice of Levy on a State Tax Refund after the IRS has taken your refund to pay your back taxes. In addition to property you own, the IRS also has access to property you partially own with others, including business income, bank accounts, rental income, and much more.
What does it take for an IRS tax levy to be released?
The quickest and most effective way to get an IRS levy released (for good) is to pay all the taxes you owe. However, most people dealing with an IRS levy can’t pay. You can get the levy released without paying the taxes you owe. However, you will need to get into an agreement with the IRS to release the levy. If you break this agreement, you will again be subject to an IRS levy. There are a few other ways the IRS will release a levy:
The IRS has 10 years to collect tax debt. Unless the IRS suspends the debt, extends the debt, or accepts a payment plan, the IRS can’t collect the taxes after that date. If you’re within the collection period and can’t pay your tax debt, you have some options to help manage the debt and maybe remove the levy. These include the following:
If any of these options seem too complicated to execute, or the idea of dealing with the IRS and outstanding debt isn’t for you, Jackson Hewitt’s Tax Resolution Services provides a full suite of options to effectively manage IRS issues.
Jackson Hewitt’s team has a wide variety of tools to manage tax issues. Whether simple or complex, our team is trained to work directly with the IRS and keep our clients updated throughout the process. Contact us to learn about our resolution process and see how committed Jackson Hewitt is to working hard for the hardest working.
About the Author
Jo Willetts, Director of Tax Resources at Jackson Hewitt, has more than 25 years of experience in the tax industry. As an Enrolled Agent, Jo has attained the highest level of certification for a tax professional. She began her career at Jackson Hewitt as a Tax Pro, working her way up to General Manager of a franchise store. In her current role, Jo provides expert knowledge company-wide to ensure that tax information distributed through all Jackson Hewitt channels is current and accurate.