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Published:   |   Last Updated: December 21, 2023

Levy Release

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The IRS can release a levy in some circumstances.  If the IRS denies your request to release the levy, you may appeal this decision.  You may appeal before or after the IRS places a levy on your wages, bank account, or other property.  After the levy proceeds have been sent to the IRS, you may file a claim to have them returned to you.  You may also appeal the denial by the IRS of your request to have levied property returned to you.

This notice or letter may include additional topics that have not yet been covered here. Please check back frequently for updates.

What does this mean to me?

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.

How did I get here?

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.

What are my next steps?

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1.

Contact the IRS

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.

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2.

Appeal

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3.

Request Return of Levied Proceeds

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.

 

Where can I get additional help?

Understanding your notice or letter

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If you still need help

The Taxpayer Advocate Service is an independent organization within the IRS that helps taxpayers and protects taxpayers’ rights. We can offer you help if your tax problem is causing a financial difficulty, you’ve tried and been unable to resolve your issue with the IRS, or you believe an IRS system, process, or procedure just isn’t working as it should. If you qualify for our assistance, which is always free, we will do everything possible to help you.

Visit www.taxpayeradvocate.irs.gov or call 1-877-777-4778.

Low Income Taxpayer Clinics (LITCs) are independent from the IRS and TAS. LITCs represent individuals whose income is below a certain level and who need to resolve tax problems with the IRS. LITCs can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or a small fee. For more information or to find an LITC near you, see the LITC page on the TAS website or Publication 4134, Low Income Taxpayer Clinic List.

Related IRS Forms, Letters and Notices

    • Form 668-A, Notice of Levy
    • Form 668-B, Levy
    • Form 668-D, Release of Levy / Release of Property from Levy
    • Form 668-E, Release of Levy
    • Form 668-W, Notice of Levy on Wages, Salary, and Other Income
    • Form 2433, Notice of Seizure
    • LP68, We Released the Taxpayer Levy
    • Letter 3788C, Rescission Letter – Notice of Intent to Levy Filed Erroneously Withdrawl Required
    • Letter 6096, Individuals Heald Harmless on Wrongful Levy or Retirement Plan
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Where am I in the tax system?

Levy Release

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