Levies & Garnishments

Levies and garnishments are the taking of something that you own without your consent to satisfy a debt.  When the IRS or the Department of Revenue believes that you have unpaid taxes, penalties, and/or interest and that you are not being cooperative, these agencies may have the legal authority to take some of the things that you own whether in your possession or in the possession of another without your consent.  The IRS and the Department of Revenue are generally required to issue a series of notices to a taxpayer before they can take a taxpayer’s property and/or rights to property. 

When a taxpayer owes taxes, the IRS and the Department of Revenue often issue a Notice of Levy to the following:

Financial institutions

If the IRS serves a Notice of Levy upon your financial institution, the financial institution is required by law to hold all funds in your accounts (up to the amount listed on the Notice of Levy) for a specified period of time.  After the specified time frame has passed, the financial institution must then send the funds to the IRS.   This Notice of Levy only applies to the funds in the accounts at the time it is received.  

If the Department of Revenue serves a Notice of Levy upon your financial institution, the financial institution may be required to remit the funds in your account to the Department of Revenue.  This may last up to 60 days.

Employers

If the IRS or the Department of Revenue serve a Notice of Levy on Wages, Salary and Other Income upon an employer, the employer is required by law to send a portion of the employee’s paycheck to the appropriate agency until the Notice of Levy is released.  The amount of your pay that is sent to the IRS or the Department of Revenue depends, in part, upon the amount of your dependents.  For many taxpayers, the amount of pay they receive when under a wage levy is insufficient to meet their monthly expenses.

Third parties

If the IRS serves a Notice of Levy upon a third party, that third party may be required by law to send all funds owed to you at that time to the IRS.  The funds that are subject to these levies are typically remitted to the IRS within a short time after the Notice of Levy is received.  This Notice of Levy may or may continue until a release is issued. If the Department of Revenue serves a Notice of Levy upon a third party, that third party may be required by law to send all funds owed to you at that time to the Department of Revenue.  This may last up to 60 days. It is possible to obtain the release of a Notice of Levy after it has been issued.  If possible, it is advantageous to attempt to avoid the issuance of a Notice of Levy.

The items seized by the IRS and the Department of Revenue can be sold to pay down your tax debt.  Not all of your possessions are subject to levy by the IRS and the Department of Revenue. The taxpayer owed several hundred thousand dollars to the IRS and the IRS issued a wage levy to the taxpayer’s employer. Accordingly, a significant amount of the taxpayer’s weekly paycheck was sent directly to the IRS leaving her with very little to support herself. She felt overwhelmed by the situation and the wage levy remained in effect for numerous years. Attorney Gregory Dzialo obtained the release of the wage levy, helped her reduce the balance due, and negotiated an installment agreement with the IRS. Now the taxpayer is able to retain a more sizeable portion of her paychecks.