If a taxpayer has unpaid federal taxes due to the IRS, the IRS can collect the unpaid amount due by levying the taxpayer’s property and rights to property.
A levy is when the IRS seeks to take the property of a taxpayer by force. Typical levies include a bank levy, when the IRS seeks to empty a taxpayer’s bank account, or a wage levy, when the IRS takes some or all of a person’s wages. The IRS can also levy upon third parties that are holding the property of the taxpayer, such as a vehicle, security deposit or other assets. If a person holding the property of a taxpayer fails to surrender that property after receiving a levy from the IRS, that person can be held liable to the IRS up to the value of the property that he or she failed to turn over. Further, if there is no reasonable cause for failing to honor the levy, that person can also be held liable for a penalty equal to 50% of the amount that was recoverable. If you are holding the money or property of a taxpayer and fail to honor a levy served by the IRS, you can be held personally liable for the value of the property that you are holding plus an additional 50% penalty.
Has the IRS recently served a levy upon you for unpaid taxes of another?
Or has the IRS served a levy in respect of your unpaid taxes?
Call us, we can help.