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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.