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Publication 594 The IRS Collection Process
an explanation of why your application was denied. If we deny your your tax debt. Under this program, we can generally seize up to
request for a withdrawal, discharge, or subordination, you may appeal 15% of your federal payments (up to 100% of payments due to
under the Collections Appeals Program. a vendor for property, goods or services sold or leased to the
➜ Levy: A seizure of property federal government). We will serve the levy once, not each time
While a federal tax lien is a legal claim against your property, a levy is you are paid. The levy continues until your debt is fully paid, other
a legal seizure that actually takes your property (such as your house arrangements are made, the collection period ends, or the IRS
or car) or your rights to property (such as your income, bank account, releases the levy. The federal payments that can be seized in this
retirement account or Social Security payments) to satisfy your tax debt. program include, but aren’t limited to, federal retirement annuity
income from the Office of Personnel Management, Social Security
We can’t seize your property if you have a current or pending Installment benefits under Title II of the Social Security Act (OASDI), and
Agreement, Offer in Compromise, or if we agree that you’re unable to federal contractor/vendor payments.
pay due to economic hardship, meaning seizing your property would • Your house, car, or other property. If we seize your house or other
result in your inability to meet basic, reasonable living expenses. property, we will sell your interest in the property and apply the
Reasons we may seize (“levy”) your property or rights to property proceeds (after the costs of the sale) to your tax debt. Prior to
If you don’t pay your taxes (or make arrangements to settle your debt), selling your property, we will calculate a minimum bid price. We
we could seize and sell your property. We will not seize your property will also provide you with a copy of the calculation and give you
to collect an individual shared responsibility payment. We usually seize an opportunity to challenge the fair market value determination.
only after the following things have occurred. We will then provide you with the notice of sale and announce the
• We assessed the tax and sent you a bill, pending sale to the public, usually through local newspapers or
• You neglected or refused to pay the tax, and flyers posted in public places. After giving public notice, we will
• We sent you a Final Notice of Intent to Levy and Notice of Your generally wait 10 days before selling your property. Money from the
Right to a Hearing at least 30 days before the seizure. sale pays for the cost of seizing and selling the property and, finally,
your tax debt. If there’s money left over from the sale after paying
However, there are exceptions for when we don’t have to offer you a off your tax debt, we will tell you how to get a refund.
hearing at least 30 days before seizing your property. These include
situations when: Property that can’t be seized (“levied”)
Certain property is exempt from seizure. For example, we can’t seize
• The collection of the tax is in jeopardy, the following: unemployment benefits, certain annuity and pension
• A levy is served to collect tax from a state tax refund, benefits, certain service-connected disability payments, worker’s
• A levy is served to collect the tax debt of a federal contractor, or compensation, certain public assistance payments, minimum weekly
• A Disqualified Employment Tax Levy (DETL) is served. A DETL is exempt income, assistance under the Job Training Partnership Act,
the seizure of unpaid employment taxes and can be served when a and income for court-ordered child support payments.
taxpayer previously requested a Collection Due Process appeal on
employment taxes for other periods within the past 2 years. We also can’t seize necessary schoolbooks and clothing, undelivered
mail, certain amounts worth of fuel, provisions, furniture, personal
If we serve a levy under one of these exceptions, we will send you effects for a household, and certain amounts worth of books and tools
a letter explaining the seizure and your appeal rights after the levy is for trade, business, or professions. There are also limitations on our
issued. ability to seize a primary residence and certain business assets.
What you should do if your property is seized (“levied”) Lastly, we can’t seize your property unless we expect net proceeds to
If your property is seized, call the number on your levy notice or 1-800- help pay off your tax debt.
829-1040 (individuals) or 1-800-829-4933 (businesses). If you’re
already working with an IRS employee, call them for assistance. How to appeal a proposed seizure (“levy”)
You can request a Collection Due Process hearing within 30 days from
Examples of property we can seize (“levy”) the date of your Notice of Intent to Levy and Notice of Your Right to a
• Wages, salary, or commission held by someone else. If we seize Hearing. Send your request to the address on your notice. For more
your rights to wages, salary, commissions, or similar payments that information, see Form 12153, Request for a Collection Due Process
are held by someone else, we will serve a levy once, not each time or Equivalent Hearing. At the conclusion of your hearing, the Office
you’re paid. The one levy continues until your debt is fully paid, of Appeals will provide a determination. You’ll have 30 days after the
other arrangements are made, or the collection period ends, or the determination to challenge it in the U.S. Tax Court. If Collection Due
levy is released. Other payments you receive, such as dividends Process rights aren’t available for your case, you may have other
and payments on promissory notes, are also subject to seizure. appeal options, such as the Collection Appeals Program.
However, the seizure only reaches the payments due or the right to
future payments as of the date of the levy. Reasons we “release” a levy
• Your bank account. Seizure of the funds in your bank account The Internal Revenue Code specifically provides that we must release a
will include funds available for withdrawal up to the amount of the levy if we determine that:
seizure. After the levy is issued, the bank will hold the available • You paid the amount you owe,
funds and give you 21 days to resolve any disputes about who • The period for collection ended prior to the levy being issued,
owns the account before sending us the money. After 21 days, • It will help you pay your taxes,
the bank will send us your money, and any interest earned on that • You enter into an Installment Agreement and the terms of the
amount, unless you have resolved the issue in another way. agreement don’t allow for the levy to continue,
• Your retirement account, including Qualified Pension, Profit Sharing, • The levy creates an economic hardship, meaning we’ve
and Stock Bonus Plans under ERISA; IRAs, Retirement Plans for determined the levy prevents you from meeting basic, reasonable
the Self-Employed (such as SEP-IRAs and Keogh Plans) and the living expenses, or
Thrift Savings Plan. Depending on the terms of the plan a levy may • The value of the property is more than the amount owed and
attach to the funds in which you have a vested right. releasing the levy won’t hinder our ability to collect the amount
• Your federal payments. As an alternative to the levy procedure owed.
used for other payments such as dividends and promissory We will also release a levy if it was issued improperly. For example, we
notes, certain federal payments may be systemically seized will release a levy if it was issued:
through the Federal Payment Levy Program in order to pay
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