To get a levy released, you’ll need to contact the IRS and give them an acceptable reason for releasing the levy. Generally, you can request a levy release if you’ve worked out a payment arrangement, are experiencing an economic hardship due to the levy, or the IRS failed to follow the correct procedures.
Releasing Continuous Levies
Levies can be continuous or one-time events. Bank account levies are one-time only. Wage garnishments and levies of certain federal payments, including Social Security retirement benefits, are continuous.
Continuous levies stay in effect until the tax debt is paid off or the levy is released. The IRS only needs to send you notice of the first levy. After that, the continuous levy automatically keeps seizing a portion of your payments or wages.
Work Out a Deal
If you pay your tax debt in full, work out a payment plan, receive innocent spouse relief, or have an Offer in Compromise accepted by the IRS, the levy should be released. Even better, you can delay the levy by requesting these tax resolution options. The IRS has to wait until they’ve processed your request before moving forward with the levy, which can take a while.
Note that a levy release does not get you back your levied property. A return of levied property is only available in more limited circumstances, which is why you should try to stop a levy before it takes effect.
Failure to Follow Procedure
If the IRS fails to follow procedure when issuing a levy, you can request that the levy be released. This could occur in the following scenarios:
- The statute of limitations for collections has expired.
- The IRS was considering your Offer in Compromise or installment agreement request when the levy was issued.
- You requested a timely Collection Due Process hearing.
- You petitioned Tax Court to hear your case.
- The levy violated the bankruptcy automatic stay.
- You weren’t sent the required notices.
- The property was exempt from seizure.
In these situations, it’s possible that the levied property will be returned to you because the levy was never properly issued under federal law. Consult with a tax attorney for help avoiding or releasing an IRS levy.
Get help with the IRS levy release process by calling Ayar Law at 248-262-3400 or filling out our contact form.