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Releasing Levies and Levied Property

Releasing a levy

The Internal Revenue Service must release your levy if any of the following occur:

  • You pay the tax, penalty, and interest you owe (please see Full Pay Service).
  • The IRS discovers that the time for collection (the statute of limitations) ended before the levy was served.
  • You provide documentation proving that releasing the levy will help the IRS collect the tax owed.
  • You have an Installment Agreement, or enter into one, unless the agreement says the levy does not have to be released (please see Installment Agreement).
  • The IRS determines that the levy is creating a significant economic hardship for you (please see Currently Not Collectible).
  • The fair market value of the property exceeds such liabiilty and release of the levy on a part of such property could be made without hindering the collection of such liability.

Releasing your property

Before the sale date, the IRS may release the property if:

  • You pay the amount of the government’s interest in the property
  • You enter into an escrow arrangement
  • You furnish an acceptable bond
  • You make an acceptable agreement for paying the tax
  • The expense of selling your property would be greater than the fair market value of the property

Returning levied property

The IRS can consider returning levied property if:

  • The IRS levies before sending you the two required notices, or before your time for responding to them has passed (10 days for the Notice and Demand; 30 days for the Notice of Intent to Levy and the Notice of Right to a Hearing).
  • The IRS did not follow it’s own procedures.
  • The IRS agrees to let you pay in installments, but the IRS still levy, and the agreement does not say that we can do so.
  • Returning the property will help you pay your taxes.
  • Returning the property is in your and the government’s best interest.

Related Links

Source: IRS.gov



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