When one thinks about IRS collections, two common methods come to mind. An IRS levy and an IRS tax lein. Many have confused these as being the same, but, actually, they aren’t.

An IRS tax levy is a seizure of individual assets to pay a tax liability. On the other hand, a tax lien protects and secures the government’s interest in a property and any rights to property. A tax lien will not actually seize a property. It generally, goes in to effect at the sale of the property. The IRS has rights to the proceeds at the time of the sale. Whereas an IRS levy in fact seizes the personal property.

Before the IRS can collect, usuallythree specifications need to be met:

1. The tax has been assessed by the IRS and a Notice of Demand for Payment has been sent.

2. The individual ignored or refused to pay the taxes.

3. The IRS sent a “Final Notice of Intent to Levy and Notice of Your Right Hearing” at least 30 days prior to the levy. The IRS could leave it at a residence, a place of business or deliver it to the last known address that the IRS has on file.

There are 4 standard varieties of levy sources for the IRS:

1. Bank Account: When the IRS removes money directly from your bank account. An individual normally will not realize it until it has already occurred. The bank must freeze funds up to the amount owed on the same day the levy is received. The bank is required to send the funds to the IRS after 21 days if the levy has not been released.

2. Wage Levy: Is sent to the employer and mandates the they withhold a particular percentage of the taxpayer’s paycheck. Up to 85% of a paycheck may be levied by the IRS. The IRS may also levy Social Security Payment

3. Third party accounts: This levy would consist of pension accounts, investment accounts, 1099 sources and essentially any source of income or assets with a few exemptions.

4. Assets: This is the least prevalent type of levy, because it is typically difficult for the IRS to do. This would include automobiles, homes, watercraft or any other sort of asset.

There is also a difference between a continual tax levy and a one-time levy. A continuous levy wouldconsist of wages, social security and other forms of income. A one time levy would include 1099 income and a bank levy. The IRS may only acquire the amount in the account or the amount due the independent contractor the day the IRS levy was issued. This won’t prevent the IRS from levying again.

Techniques to stop irs levy procedures:

An IRS tax levy will proceed until the tax debt is paid, the statute of limitations ends, or other arrangements are made, which can include an Installment Agreement, having the account put in Section 53 or a hardship, or having an Offer in Compromise accepted.

Also, hiring a tax professional with practical experience in working with the collection department of the IRS will ensure that the tax laws are worked to the tax payer’s benefit. An knowledgeable tax representative will also know how to deal with tax liabilities and the fastest method to stop irs levy activity based on the tax payer’s specific situation.