Ultimately, the IRS will specify the specific property it will seize. You will be notified ahead of time when the IRS tries to withdraw from your bank accounts or garnish your wages. If the IRS takes physical property, it will first seize the property, then notify you. A brief overview of the levy process follows:
The final notice of intent to levy is typically sent out 30 days before the IRS will attempt to seize property. The IRS can seize either physical property such as land or vehicles or intangible property such as bank accounts or wages.
After 30 days from the date the IRS issues the Final Notice of Intent to Levy, the IRS will issue a Notice of Levy that will specify the specific property it is attempting to take. The IRS could issue a levy notice to your employer to garnish your wages and it could send a levy notice to your bank to withdraw bank funds. You will receive copies of any levies sent to third parties.
You are entitled to a Collection Due Process hearing within 30 days after receiving the final notice of intent to levy. During this procedure, you can suggest alternatives to a levy such as an installment agreement or an offer in compromise.
Certain property is exempt from levy. Examples include furniture and personal effects up to a certain amount, unemployment benefits, amounts used to pay child support, etc.
The Taxpayer's Advocate office may be helpful if payment of the levy will impose economic hardship on you.
Talk to a tax expert to see what your best options are.
Any information given is general tax information and may or may apply in your specific situation. Please consult with an attorney or other appropriate professional to determine how any advice may apply in your specific situation.
Attorney Curcuru is absolutely right. The notice you received represents the culmination of a series of notices that started with an assessment of taxes. At each stage of those notices, you had rights to assert to either contest the amount being assessed, or to seek alternative payment arrangements. When their has not been a resolution of the tax debt, ultimately the you will receive a notice of intent to levy. That tells you that the IRS will most likely either levy on your bank account or your sources of income. If you're employed, that will be a wage levy. If you are an independent contractor, then the payors who have previously filed form 1099 on you will receive a levy. A levy is a notice to the person holding money for you to hold those funds and send them to the IRS within 30 days. You are required to be sent notice of these levies. Your notice comes to you via mail. (Which means if the IRS is using your address from two years ago... then you won't get adequate notice of the levy in time to respond. )
So once the levy is filed then what ? You either have to pay the taxes to lift the levy, or enter into a payment plan, or take some other action which compels the IRS (and there aren't many of those) to lift the levy. The point is.. you have to take some action or else your bank account will be frozen up to the amount the IRS claims, or your paycheck will be substantially reduced each payday until the tax debt is paid in full. You have some time now to prevent such levies. Get help from a tax attorney. Finally, even if you prevent the bank or wage levy with an installment plan, the IRS is likely to file a Notice of Federal Lien at the courthouse. This will reduce your credit rating. The above are general comments on the question you posed. I am not your attorney and do not represent you. You do need representation.
My colleagues have provided excellent answers - you'd be wise to retain one of them or other counsel to assist in handling the matter.
Evan A. Nielsen is licensed to practice law in California and handles federal tax matters throughout the U.S. The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. This response does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult an attorney.