My practice focuses on civil and criminal tax controversies in New Orleans and across Louisiana.I deal with taxpayers who have fallen into the IRS Collection Division’s inventory and are facing federal tax levies by the Internal Revenue Service (“IRS”). A question that comes up often is what the IRS can seize.
The IRS issues two types of federal tax levies: a “regular” levy and a “continuing” levy. A continuing levy is issued by the IRS on wages or routinely paid commissions, so it will remain in place until it is released.
A “regular” levy issued by the IRS reaches the assets owned by the taxpayer at the moment the levy is received. For example, Assume the Taxpayer owes the IRS $10,000. The taxpayer has $100 in his bank account on Monday. Monday at 3:00 pm, the bank receives a Notice of Levy from the IRS for the $10,000 that the federal government is owed. The taxpayer then deposits $10,000 in his account on Tuesday at 10:00 am. How much does the bank have to send to the IRS on account of the federal tax levy?
The bank will send the IRS the $100, which is the money it had when the levy was received. The $10,000 deposited on Tuesday would not be reached by the federal tax levy. The situation is the same with contractors or receivables. The party that receives the tax levy only pays over to the IRS the amount which it owes the Taxpayer at that moment.
If you or your clients have any issues with tax levies issued by the IRS or other federal tax problems, please feel free to contact me directly at (504) 680-6057 or by email at ian@semmlaw.com
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