Wednesday, April 15, 2009

Who Else Wants Their Levy Released ?

A levy, is a mandatory garnishment against a taxpayers bank,social security,wage sources. There are a series of collection notices, elevem to be exact that are sent before a levy is even put into action. Where bank levies are one time, wage levies are continuous and will not be released until either the tax is paid in full, a resoliution has been made (i.e. installment agreement, Offer In Compromise,Currently Non Collectible ) or it prevents a hardship on the taxpayer,

Internal Revenue Service requires levies to be released in the following circumstances.
*The liability is satisfied by full payment, i.e., is no longer owed
*The statutory collection period has run out

*Generally, a levy served prior to the expiration of the collection period is good and should not be released. In addition, a levy served after reducing a tax liability to a judgment is valid.


*One week before the statutory collection period runs out, a notice of levy is served at the taxpayer's bank. The bank does not have to send the levy proceeds until the 21 day holding period on bank levies expires, and this will be after the period for collection runs out. This levy does not have to be released when the collection period runs out, because it was served timely.

*A continuous wage levy served before the expiration of the collection statute must be released after the expiration of the collection statute.


*When a notice of levy is served on a taxpayer's right to property, sometimes that includes the right to receive future payments, e.g., pension benefits. If there is a fixed and determinable right to receive those future payments, the levy will attach them when they would have been paid to the taxpayer, even though it is not actually a "continuous" levy. As long as the right to property has been levied before the period for collection runs out, the notice of levy does not have to be released.

1 comment:

footbolito17 said...

very informative...

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