An IRS levy is IRS seizing or taking of your property to sell and apply against your tax debt. While the lien simply encumbers your property, the levy actually takes it away. Many think that the levy is the most vicious weapon in the IRS’s collection arsenal. The IRS not only has the power to simply take your property and sell it, but also may levy or seize your property before obtaining a judgment against you in court. This does not mean, however, that the IRS has no boundaries in seizing and selling your property. Before it levies any of your assets, five events must take place:
IRS must send you a Notice of Intent to Levy.
You must fail to pay the tax liability within thirty (30) days after the Final Notice of Intent to Levy.
Then, the IRS sends a Notice of Levy to any third party who holds your property or rights in property. The two most common levies are: 1) levy on non-wages, such as bank accounts, a vehicle, or real estate and 2) levy on wages, which seizes a portion of your salary or wages each pay period until the tax debt is paid in full.