The Irs Collection Process Publication 594 (Page 6 of 8) in pdf

Page 6

Reasons we may seize (“levy”) your property or rights to property

The federal payments that can be seized in this program include, but

aren’t limited to, federal retirement annuity income from the Office of

If you don’t pay your taxes (or make arrangements to settle your debt),

Personnel Management, Social Security benefits under Title II of the

we could seize and sell your property. We usually seize only after the

Social Security Act (OASDI), and federal contractor/vendor payments.

following things have occurred:

•

If we seize your house or other

•

We assessed the tax and sent you a bill,

Your house, car, or other property

property, we’ll sell your interest in the property and apply the

You neglected or refused to pay the tax, and

•

proceeds (after the costs of the sale) to your tax debt.

•

We sent you a Final Notice of Intent to Levy and Notice of Your Right

Prior to selling your property, we’ll calculate a minimum bid price.

to a Hearing at least 30 days before the seizure.

We’ll also provide you with a copy of the calculation and give you an

However, there are exceptions for when we don’t have to provide a 30

opportunity to challenge the fair market value determination. We’ll

day notice before seizing your property. These include situations when:

then provide you with the notice of sale and announce the pending

•

The collection of the tax is in jeopardy,

sale to the public, usually through local newspapers or flyers posted in

•

A levy is served to collect tax from a state tax refund,

public places.

A levy is served to collect the tax debt of a federal contractor, or

•

After giving public notice, we’ll generally wait 10 days before selling

•

A Disqualified Employment Tax Levy (DETL) is served. A Disqualified

your property. Money from the sale pays for the cost of seizing and

Employment Tax Levy is the seizure of unpaid employment taxes and

selling the property and, finally, your tax debt. If there’s money left

can be served when a taxpayer previously requested a Collection Due

over from the sale after paying off your tax debt, we’ll tell you how to

Process appeal on employment taxes for other periods within the

get a refund.

past 2 years.

Property that can’t be seized (“levied”)

If we serve a levy under one of these exceptions, we’ll send you a letter

Certain property is exempt from seizure. For example, we can’t seize the

explaining the seizure and your appeal rights after the levy is issued.

following: unemployment benefits, certain annuity and pension benefits,

certain service-connected disability payments, workers compensation,

What you should do if your property is seized (“levied”)

certain public assistance payments, minimum weekly exempt income,

If your property or federal payments are seized, call the number on your

assistance under the Job Training Partnership Act, and income for court-

levy notice or 1-800-829-1040. If you’re already working with an IRS

ordered child support payments.

employee, call him or her for assistance.

We also can’t seize necessary schoolbooks and clothing, undelivered

Examples of property we can seize (“levy”)

mail, certain amounts worth of fuel, provisions, furniture, personal

•

If we seize

Wages, salary, or commission held by someone else

effects for a household, and certain amounts worth of books and tools

your rights to wages, salary, commissions, or similar payments that

for trade, business, or professions. There are also limitations on our

are held by someone else, we’ll serve a levy once, not each time

ability to seize a primary residence and certain business assets.

you’re paid. The one levy continues until your debt is fully paid, other

arrangements are made, or the collection period ends.

Lastly, we can’t seize your property unless we expect net proceeds to

Other payments you receive, such as dividends and payments on

help pay off your tax debt.

promissory notes, are also subject to seizure. However, the seizure

How to appeal a proposed seizure (“levy”)

only reaches the payments due or the right to future payments as

You can request a Collection Due Process hearing within 30 days from

of the date of the levy.

the date of your Notice of Intent to Levy and Notice of Your Right to

•

Seizure of the funds in your bank account will

Your bank account

a Hearing. Send your request to the address on your notice. For more

include funds available for withdrawal up to the amount of the

information, see Form 12153, Request for a Collection Due Process

seizure. After the levy is issued, the bank will hold the available funds

or Equivalent Hearing. At the conclusion of your hearing, the Office

and give you 21 days to resolve any disputes about who owns the

of Appeals will provide a determination. You’ll have 30 days after the

account before sending us the money. After 21 days, the bank will

determination to challenge it in the U.S. Tax Court.

send us your money, plus any interest earned on that amount, unless

If you don’t file a hearing request within 30 days, you’re not entitled

you have resolved the issue in another way.

to a Collection Due Process hearing, but you may be entitled to an

•

As an alternative to the levy procedure used

Your federal payments

Equivalent Hearing. The request for an Equivalent Hearing, however,

for other payments such as dividends and promissory notes, certain

doesn’t prohibit us from seizing and doesn’t suspend the 10-year period

federal payments may be systemically seized through the Federal

for collecting tax. In addition, you’re not entitled to a judicial review of

Payment Levy Program in order to pay your tax debt.

the decision from the Equivalent Hearing.

Under this program, we can generally seize up to 15% of your federal

payments (up to 100% of payments due to a vendor for goods or

If Collection Due Process rights aren’t available for your case, you may

services sold or leased to the federal government). We’ll serve the levy

have other appeal options, such as the Collection Appeals Program.

once, not each time you are paid. The one levy continues until your

debt is fully paid, other arrangements are made, the collection period

ends, or the IRS releases the levy.

The Irs Collection Process Publication 594 Page 6

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