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A tax levy is a legal action taken by the IRS to seize a taxpayer's property to satisfy a tax debt. It is often preceded by a tax lien, which is a legal claim against the taxpayer's property to secure payment. When the IRS issues a notice of intent to levy, the taxpayer has 30 days to either challenge the levy or pay the amount owed.

A tax levy can have significant impacts on a taxpayer's life. The IRS can seize various types of property, including paychecks, bank accounts, and even vehicles. However, some forms of public assistance payments, such as unemployment benefits, pensions, workers' compensation, and child support payments, cannot be seized.

If a taxpayer cannot pay the tax debt in full before the IRS seizes their assets, they may be able to remove the tax levy by working out a payment plan or making other arrangements with the IRS. Alternatively, the taxpayer can challenge the levy by demonstrating undue hardship or filing an offer in compromise. If the taxpayer's financial situation is dire, they may be placed in Currently Not Collectible status, which temporarily halts collection action.

There are several ways to stop a tax levy. Paying the debt in full within a reasonable period (up to 120 days) will result in an immediate release of the levy. Negotiating an installment agreement or demonstrating undue hardship can also result in the release of the levy. Additionally, filing an offer in compromise or negotiating directly with a field agent may lead to a release of the levy. The Collection Due Process and Collection Appeal Process allow taxpayers to appeal a tax levy, which also releases the levy while the appeal is being considered. Finally, filing for Chapter 7 or Chapter 13 bankruptcy may halt all collection action, including tax levies.

Overall, the best strategy for dealing with tax levies is to avoid them altogether. The IRS is willing to work with taxpayers to come up with mutually agreeable solutions, and taxpayers should maintain lines of communication with the agency to resolve any tax issues. If a taxpayer's tax problem is complex, seeking the help of experienced attorneys, such as those at Low Cost Tax Relief, may be beneficial.

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