Examples of property the IRS can and can't seize (levy)


Examples of property the IRS can and can't seize (levy)

Property that can be seized (levied)

Wages, salary or commission held by some else

If the IRS seizes your rights to wages, salary, commissions, or similar payments that are held by someone else, the IRS will serve a levy once, not each time you are paid. The one levy continues until your debt is fully paid, other arrangements are made, or the collection period ends. Other payments you receive, such as dividends and payments on promissory notes, are also subject to seizure. However, the seizure only reaches the payments due or the right to future payments as of the date of the levy.

Your bank account

Seizure of the funds in your bank account include funds available for withdrawal up to the a mount of the seizure. After the levy is issued, the bank will hold the available funds and give you 21 days to resolve any disputes about who owns the account before sending the IRS the money. After 21 days, the bank will send the IRS your money, and any interest earned on that amount, unless you have resolved the issue in another way.

Your federal payments

As an alternative to the levy procedure used for other payments such as dividends and promissory notes, certain federal payments may be systemically seized through the Federal Payment Levy Program in order to pay your tax debt. Under this program, the IRS can generally seize up to 15% of your federal payments (up to 100% of payments due to a vendor for goods or services sold to the federal government). The IRS will serve the levy once, not each time you are paid. The levy continues until your debt is fully paid, other arrangements are made, the collection period ends, or the IRS releases the levy.

The federal payments that can be seized in this program include, but aren’t limited to, federal retirement annuity income from the Office of Personnel Management, Social Security benefits under Title II of the Social Security Act (OASDI), and federal contractor/vendor payments.

Your house, car, or other property

If the IRS seizes your house or other property, they will sell your interest in the property and apply the proceeds after the costs of the sale to your tax debt. Prior to selling your property, the IRS will calculate a minimum bid price. They will also provide you with a copy of the calculation and give you an opportunity to challenge the fair market value determination. The IRS will then provide you with the notice of sale and announce the pending sale to the public, usually through local newspapers or flyers posted in public places. After giving public notice, the IRS will generally wait 10 days before selling your property. Money from the sale pays for the cost of seizing and selling the property and, finally your tax debt. If there is money left over from the sale after paying off your tax debt, the IRS will tell you how to get a refund.


Property that can't be seized (levied)

Certain property is exempt from seizure. For example, the IRS can’t seize the following:

Unemployment benefits

Certain annuity and pension benefits

Certain service-connected disability payments

Workers compensations

Certain public assistance payments

Minimum weekly exempt income

Assistance under the Job Training Partnership Act

And income for court-ordered child support payments

The IRS also can’t seize necessary schoolbooks and clothing, undelivered mail, certain amounts worth of fuel, provisions, furniture, personal effects for a household, and certain amounts worth of books and tools for trade, business, or professions. There are also limitations on the ability to seize a primary residence and certain business assets.

The IRS can’t seize your property unless they expect net proceeds to help pay off your tax debt.