IRS Tax Levy Help From Licensed Tax Agents in Pasadena, CA
A tax levy is the moment IRS collection stops being a letter and starts being money leaving your hands. It is what you want to avoid at all costs, and if it has already happened, what you want resolved as quickly as possible. At Fresh Start Tax Relief Services in Pasadena, our licensed tax agents help taxpayers respond to bank levies, wage levies, and other IRS seizures, and work to get them released. We are a women-owned business with decades of experience dealing with the IRS.
What a Tax Levy Is
A levy is the legal seizure of your property to satisfy a tax debt. It is different from a lien, which is a claim against your property that sits on the public record. A levy actually takes the money or property. Both the IRS and state tax agencies can levy.
Before the IRS can levy most property, it must assess the tax, send you a bill, and then issue a final notice of intent to levy at least 30 days in advance. Our
Intent to Levy notice page explains that notice and the hearing rights that come with it.
Bank Levies
The IRS or state can go into your bank account and levy everything that is in it at that particular time. If you owe the IRS or state $10,000 and happen to have $7,500 in your account, they can take the whole amount to help satisfy your tax debt.
There is one important detail. After receiving a levy, the bank generally holds the funds for 21 days before sending them to the IRS. That window is often the best chance to work out a release before the money is gone. A bank levy also captures only what is in the account on the day it arrives. It does not automatically reach deposits made afterward, although the IRS can issue another one.
Wage Levies
A wage levy works differently. It goes to your employer and continues every pay period until the debt is paid or the levy is released. A portion of each paycheck is exempt, based on your standard deduction and the number of dependents you claim, and the rest goes to the IRS. For many people, that leaves far too little to cover rent, groceries, and other basic bills.
Other Property the IRS Can Levy
Bank accounts and wages are the most common targets, but they are not the only ones. The IRS can also levy Social Security benefits, retirement accounts, money owed to you by customers or clients, state tax refunds, and, in some cases, vehicles or real estate. For business owners, a levy on accounts receivable can disrupt cash flow almost overnight.
Getting a Levy Released
The IRS is required to release a levy in several situations, including when:
- The tax debt is paid in full
- The collection period has expired
- You enter into an installment agreement, unless the agreement says otherwise
- The levy is creating an economic hardship, meaning you cannot meet basic living expenses
- Releasing the levy would help the IRS collect the debt
We review your situation to see which of these applies, then contact the IRS on your behalf to request the release. At the same time, we work on a lasting resolution, such as a payment plan, an Offer in Compromise, or penalty abatement, so the levy does not return.
Levies and Liens Together
A levy often arrives alongside other collection actions. If the IRS has also filed a tax lien, resolving the underlying debt addresses both. We look at the full picture so you are not solving one problem while another grows.
Serving Pasadena and Taxpayers Nationwide
We help clients in Pasadena, San Gabriel, Arcadia, La Cañada Flintridge, and across Los Angeles County. Levies can happen anywhere, and so can our help: "Not only do we service every single county in California, but we service taxpayers nationwide." Learn more about the Tax Superwomen on the Fresh Start Tax Relief home page.
Frequently Asked Questions
How long does my bank hold levied funds before sending them to the IRS?
The bank generally holds the funds for 21 days. That period is often the best opportunity to request a levy release before the money is sent.
Does a wage levy take my entire paycheck?
No. A portion is exempt based on your standard deduction and number of dependents. The rest is sent to the IRS each pay period until the levy is released.
When does the IRS have to release a levy?
The IRS must release a levy when the debt is paid, the collection period has expired, you enter an installment agreement, or the levy is causing an economic hardship.
Can the IRS levy my account without warning?
For most property, the IRS must send a final notice of intent to levy at least 30 days before levying. Some exceptions apply, such as levies on state tax refunds.
Does a bank levy take future deposits too?
No. A bank levy captures only the funds in the account when the levy arrives. The IRS can issue a new levy later, but a wage levy is the one that continues each pay period.