The IRS Final Notice of Intent to Levy is an official document that federal tax authorities issue in order to give you a warning that they are going to start enforced collection activity of your past due liability. This letter is usually sent via certified mail and requires your immediate attention, even if you believe that you do not owe money to the IRS.
The IRS gives you 30 days from the day when the Final Notice was issued to respond to it. If you do not owe any money to the IRS, you still need to call the number listed on this notice and discuss the matter with the IRS representative. If you have a debt, but believe that the amount listed on the Final Notice is incorrect, you can file an appeal request using the enclosed form 12153, Request for a Collection Due Process or Equivalent Hearing. You can also file this request if you wish to resolve your liability with the IRS, but need a little bit more time than 30 days to be able to do that.
If you ignored the Final Notice of Intent to Levy and missed the 30 days period to exercise your appeal rights, the IRS can start enforced collections. This may include bank levies, wage garnishment, levies of Accounts Receivable, and seizure of property. An IRS bank levy is usually a one-day event. In other words, when the Notice of Levy is received by your bank, the bank has to freeze the money you had in your account on that day and send this amount to the IRS. This does not apply to the money you receive any time after the levy. So, if you ignored the Final Notice of Intent to Levy, be aware that you might lose money from your bank accounts.
While it is possible to minimize the damage made to your financial situation by the IRS bank levy, the Levy on Wages, or the IRS Wage Garnishment, is not an easy thing to avoid. If the IRS sends a Levy on Wages notice to your employer, your next paycheck will be significantly lower than you expect. This will continue until your IRS debt is paid in full, or until you set up a repayment option with federal taxing authorities. In some cases it is possible to release a Wage Garnishment, but this is a complex issue and is best done with the help of a tax debt professional.
If you did not respond to the IRS Final Notice of Intent to Levy on time and became a victim of enforced collections, the best thing to do is to arrange an alternative repayment option with the IRS. It can be done by either contacting the department that issued this notice, or by filing form 12153 – Request for a Collection Due Process or Equivalent Hearing mentioned above. Although filing this form after the 30 days period does not stop collection actions, it still gives you the right for an Equivalent Hearing, which you can use to discuss your problem with the IRS Appeals Officer and negotiate a manageable payment plan. If you cannot afford to make any payments to the IRS for your past due taxes, you might be placed on Currently Non Collectible Status.