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IRS Bank and Wage Levies: What’s the Difference?

Posted by Brandon Keim | Mar 24, 2023 | 0 Comments

If you're facing a levy from the IRS, seeing a notice that the IRS intends to levy your bank account or your wages can be frightening. But it's important to understand the type of levy you're facing and how it will work. 

IRS Levies

levy is a legal seizure of your assets by the IRS. It can involve real or personal property you own, such as your home, a boat, your car, or assets a third party holds for you, such as a bank account, retirement account, a state tax refund, or your wages.

  1. IRS Bank Levy

When the IRS levies a bank account, you should receive a “Final Notice of Intent to Levy and Notice of Your Right to a Hearing” by mail as well as a Third-Party Contact notice letting you know the IRS is contacting a third-party, such as your bank, concerning the collection of your debt. You'll also have 21 days before the levy goes into effect to give you time to contact the IRS and let them know of any errors or arrange to make payment of your tax debt.

  1. IRS Wage Levy

If the IRS levies your wages, you'll also receive notice in advance. The levy will send part of your wages to the IRS with each paycheck until you:

  • Pay the tax debt in full,
  • You make other arrangements with the IRS to pay the amount you owe, or
  • The IRS releases the levy.

Part of your paycheck may be exempt from garnishment or levy based on the standard deduction and an amount calculated for the number of dependents you have. Your employer will typically give you a form to complete with the number of your dependents and your filing status. You must return the form within three days, or the IRS will use married filing separately with no dependents to determine your exemption.

You Need Experienced Tax Guidance

If you're facing levies from the IRS and seizure of your assets or property or wage garnishment, it is possible to get the IRS to release a levy. But it's time to get an experienced tax professional involved to ensure you have the advice and legal guidance you need. If you need help, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.

About the Author

Brandon Keim

A Certified Tax Law Specialist, CPA, partner at Frazer Ryan Goldberg & Arnold LLP, and former Senior IRS Trial Attorney, Brandon Keim holds an LL.M. in Taxation from Georgetown University Law Center.


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