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The Weil Law Group, PA

What is a Tax Levy?

Definition– a tax levy is the seizure of property to pay taxes owed. A tax levy will occur after you’ve received a tax lien. However, unemployment benefits, annuity and pension benefits, disability payments, workers’ compensation, and public assistance or child support payments cannot be seized by the IRS.

 

What It Really Means

A tax levy allows the government to recover all past owed money from your income taxes. A tax levy is the fancy term for the enforcement of a tax lien. It allows the government to potentially garnish your wages, freeze your bank accounts, or take your home.

 

Example

Charles owes $20,000 in past due taxes to the federal government. He has made no attempt to pay them previously. Charles owns a vacant piece of land that is valued at $15,000 and a car that is valued at $5,000. The government is able to place a tax lien on the vacant land and the car owned by Charles, in order to satisfy the debt. Charles then contacts the IRS to set up a payment plan to pay the amount due, but then fails to make any payments. The government is then able to legally take ownership and control of the vacant property and vehicle, and sell them, in order to recoup the money owed.

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