Virginia Levy Laws

A levy occurs when the government, or a party working on its behalf, claims a person’s property to pay a tax debt. The claim is a legal seizure of property and the Internal Revenue Service can sell the property (including a home, car or boat) or claim liquid assets (such as wages, bank accounts and life insurance). Notices of delinquent taxes can come from the IRS, called “Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320” or from the commonwealth of Virginia, “Notice of Intent to File Memorandum of Lien.”

Tips

  • When a state agency serves a Notice of Levy, it means that steps are bring taken to collect a tax debt directly from the taxpayer's wages, bank account or other funds.

Understanding Why a Levy Occurs

A levy occurs after repeated attempts by the IRS or Virginia Department of Taxation to clear unpaid tax debt. Before a levy takes place, the tax payment is tallied and sent to the individual. The procedure for a levy then goes into motion if that person refuses to pay the tax.

Exploring the Levy Timeline

The IRS or Virginia Department of Taxation must give at least 30 days notice before executing a levy on a property. That letter can be sent via certified mail or delivered to a person’s home or workplace. The person can request a Collection Due Process Hearing and begin tax court proceedings. The person also has the option to work out a payment plan for the owed taxes. If terms can be agreed upon between the parties, no levy will take place. If not, property can be seized 30 days after the notice is sent.

Items That Can't Be Levied

Only property that belongs to a person and will be used to pay the tax debt can be levied. Some items that cannot be levied include personal effects (including fuel, furniture and provisions) of up to $7,720 in value, school books, undelivered mail, unemployment benefits, some disability or public assistance payments, and income recorded for child-support payments.

Assessing Property Collection

A sheriff or deputy will come to a person’s home and make a list of property to be levied. The list is prepared for the IRS or department of taxation and the property owner will get a list of items to be seized and sold. If exempt items are on that list, a property owner can contest those items with the court. A law enforcement official will return to collect items that qualify for the levy prior to sale.

How to Stop a Tax Levy

As a taxpayer, the easiest way to stop levy is to request a "Collection Due Process" hearing within the deadline set by Virginia law. This suspends the levy pending negotiations with the IRS or the Virginia Department of Taxation on some payment alternatives for the unpaid taxes. The tax agency will usually allow a decent amount of time, in the region of 60 to 90 days, to explore the alternatives for paying the tax debt.