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Publication 594 The IRS Collection Process
whether you qualify for a subordination, see Publication 784, How to • Your retirement account, including Qualified Pension, Profit Sharing,
Prepare an Application for a Certificate of Subordination of Federal Tax and Stock Bonus Plans under ERISA; IRAs, Retirement Plans for
Lien. To watch an instructional video about Publication 784, visit www. the Self-Employed (such as SEP-IRAs and Keogh Plans) and the
irsvideos.gov/Individual/IRSLiens. Thrift Savings Plan. Depending on the terms of the plan a levy may
Appeal rights for withdrawal, discharge or subordination attach to the funds in which you have a vested right.
If your application is denied you will receive Form 9423, Collection • Your federal payments. As an alternative to the levy procedure
Appeal Request and Publication 1660, Collection Appeal Rights, with used for other payments such as dividends and promissory
an explanation of why your application was denied. If we deny your notes, certain federal payments may be systemically seized
request for a withdrawal, discharge, or subordination, you may appeal through the Federal Payment Levy Program in order to pay
under the Collections Appeals Program. your tax debt. Under this program, we can generally seize up to
15% of your federal payments (up to 100% of payments due to
➜ Levy: A seizure of property a vendor for property, goods or services sold or leased to the
While a federal tax lien is a legal claim against your property, a levy is federal government). We will serve the levy once, not each time
a legal seizure that actually takes your property (such as your house you are paid. The levy continues until your debt is fully paid, other
or car) or your rights to property (such as your income, bank account, arrangements are made, the collection period ends, or the IRS
retirement account or Social Security payments) to satisfy your tax debt. releases the levy. The federal payments that can be seized in this
We can’t seize your property if you have a current or pending Installment program include, but aren’t limited to, federal retirement annuity
Agreement, Offer in Compromise, or if we agree that you’re unable to income from the Office of Personnel Management, Social Security
pay due to economic hardship, meaning seizing your property would benefits under Title II of the Social Security Act (OASDI), and
result in your inability to meet basic, reasonable living expenses. federal contractor/vendor payments.
Reasons we may seize (“levy”) your property or rights to property • Your house, car, or other property. If we seize your house or other
If you don’t pay your taxes (or make arrangements to settle your debt), property, we will sell your interest in the property and apply the
we could seize and sell your property. We will not seize your property proceeds (after the costs of the sale) to your tax debt. Prior to
to collect an individual shared responsibility payment. We usually seize selling your property, we will calculate a minimum bid price. We
only after the following things have occurred. will also provide you with a copy of the calculation and give you
an opportunity to challenge the fair market value determination.
• We assessed the tax and sent you a bill, We will then provide you with the notice of sale and announce the
• You neglected or refused to pay the tax, and pending sale to the public, usually through local newspapers or
• We sent you a Final Notice of Intent to Levy and Notice of Your flyers posted in public places. After giving public notice, we will
Right to a Hearing at least 30 days before the seizure. generally wait 10 days before selling your property. Money from the
However, there are exceptions for when we don’t have to offer you a sale pays for the cost of seizing and selling the property and, finally,
hearing at least 30 days before seizing your property. These include your tax debt. If there’s money left over from the sale after paying
situations when: off your tax debt, we will tell you how to get a refund.
• The collection of the tax is in jeopardy, Property that can’t be seized (“levied”)
• A levy is served to collect tax from a state tax refund, Certain property is exempt from seizure. For example, we can’t seize
• A levy is served to collect the tax debt of a federal contractor, or the following: unemployment benefits, certain annuity and pension
• A Disqualified Employment Tax Levy (DETL) is served. A DETL is benefits, certain service-connected disability payments, worker’s
the seizure of unpaid employment taxes and can be served when a compensation, certain public assistance payments, minimum weekly
taxpayer previously requested a Collection Due Process appeal on exempt income, assistance under the Job Training Partnership Act,
employment taxes for other periods within the past 2 years. and income for court-ordered child support payments.
If we serve a levy under one of these exceptions, we will send you We also can’t seize necessary schoolbooks and clothing, undelivered
a letter explaining the seizure and your appeal rights after the levy is mail, certain amounts worth of fuel, provisions, furniture, personal
issued. effects for a household, and certain amounts worth of books and tools
What you should do if your property is seized (“levied”) for trade, business, or professions. There are also limitations on our
If your property or federal payments are seized, call the number on ability to seize a primary residence and certain business assets.
your levy notice or 1-800-829-1040. If you’re already working with an Lastly, we can’t seize your property unless we expect net proceeds to
IRS employee, call him or her for assistance. help pay off your tax debt.
Examples of property we can seize (“levy”) How to appeal a proposed seizure (“levy”)
• Wages, salary, or commission held by someone else. If we seize You can request a Collection Due Process hearing within 30 days from
your rights to wages, salary, commissions, or similar payments that the date of your Notice of Intent to Levy and Notice of Your Right to a
are held by someone else, we will serve a levy once, not each time Hearing. Send your request to the address on your notice. For more
you’re paid. The one levy continues until your debt is fully paid, information, see Form 12153, Request for a Collection Due Process
other arrangements are made, or the collection period ends, or the or Equivalent Hearing. At the conclusion of your hearing, the Office
levy is released. Other payments you receive, such as dividends of Appeals will provide a determination. You’ll have 30 days after the
and payments on promissory notes, are also subject to seizure. determination to challenge it in the U.S. Tax Court. If Collection Due
However, the seizure only reaches the payments due or the right to Process rights aren’t available for your case, you may have other
future payments as of the date of the levy. appeal options, such as the Collection Appeals Program.
• Your bank account. Seizure of the funds in your bank account Reasons we “release” a levy
will include funds available for withdrawal up to the amount of the The Internal Revenue Code specifically provides that we must release a
seizure. After the levy is issued, the bank will hold the available levy if we determine that:
funds and give you 21 days to resolve any disputes about who
owns the account before sending us the money. After 21 days, • You paid the amount you owe,
the bank will send us your money, and any interest earned on that • The period for collection ended prior to the levy being issued,
amount, unless you have resolved the issue in another way. • It will help you pay your taxes,
• You enter into an Installment Agreement and the terms of the
agreement don’t allow for the levy to continue,
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