Levy Release

If you have an unpaid tax debt, the IRS may have issued a levy, which is a lawful seizure of your property or assets (such as funds from a bank account, Social Security benefits, wages, your car, or your home).

The IRS is required to release a levy if it determines that:

• You paid the amount you owe and no longer have a balance.
• The period the IRS can collect the tax ended before the levy was issued.
• Release of the levy will help you pay your taxes.
• The levy is creating economic hardship (you cannot afford your necessary living expenses).
• You are in an Installment Agreement and the terms of the agreement do not allow for the levy to continue.
• When the levy has secured more than is owed, a portion of the levied property can be released if doing so will not hinder collection.

In addition, the IRS may release a levy for other reasons, including but not limited to:

• You filed for bankruptcy prior to the levy being issued.
• The levy is premature or not in accordance with IRS administrative procedures (proper notice wasn’t sent prior to levy action, the levied property was exempt, etc.).
• The levy was wrongful (the person or business listed on the levy does not have interest in the property that was levied).
• You have a pending installment agreement or pending offer in compromise.

This may include digital assets, find out more on digital assets and how this may apply to you.

You have a balance on your tax account. A notice was sent to you letting you know how much you owe, when it was due, and how to pay. Since you did not make a payment arrangement, the IRS is continuing with its collection process.

If the tax being levied is the result of an audit where you didn’t know you were audited (never got a notice), you didn’t meaningfully participate, or you disagree with the findings, you may be able to ask for audit reconsideration.

If the tax being levied stems from the filing of a joint return and you believe your current or former spouse should be solely responsible for an incorrect item or an underpayment of tax on the return, you may be eligible for relief as an Innocent Spouse.

Call 1-800-829-1040 and be prepared to discuss an alternative way to pay your taxes, which may include providing financial information for the IRS to review.  You should have received a notice of levy in the mail.  Have the notice with you when you call.

You can request an appeal through the Collection Appeal Program.  You can also request a Collection Due Process Hearing or Equivalent Hearing, if you are still within the timeframe allowed.

See Publication 1660 for a full explanation of your appeal rights.

If the IRS issues a levy in violation of the law, the IRS will return the levy proceeds. If the levy was not in violation of the law, there are circumstances where the IRS has discretion to return the proceeds, however you must timely request the return:

• The levy was premature or not in accordance with administrative procedures.
• You have an installment agreement for the tax liability to which the levy proceeds were applied, unless the agreement provides otherwise.
• Returning the payment will assist in other collection.
• With your or the National Taxpayer Advocate’s (NTA) consent, returning the proceeds would be in your (as determined by the NTA) or the government’s best interest.