Express U.S.

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IRS can seize your social security, property, and paycheck once a year

By Anna CarlsonYelena Mandenberg,

4 days ago

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Signage for the Internal Revenue Service (IRS) is seen outside IRS headquarters in Washington, DC, on April 15, 2025. The US federal tax agency has reached an agreement to share highly regulated taxpayer information with immigration authorities -- a move that could help them identify immigrants they want to deport, court filings showed on April 8, 2025. The deal is a victory for the Trump administration, which has launched a massive deportation push, but has caused an outcry by immigrant rights groups. The Internal Revenue Service (IRS) allows millions of undocumented migrants to pay taxes, a move seen as boosting both their immigration cases and the financial health of massive US federal programs such as Social Security. (Photo by Jim WATSON / AFP) (Photo by JIM WATSON/AFP via Getty Images)

In 2025, neglecting to pay your taxes could result in owing the IRS more money due to penalties , interest, and most commonly, levies. If taxes are not paid by the due date (April 15 for most, barring 13 states with tax extensions), the IRS can initiate a process that might lead to asset seizure.

Levies can be imposed on bank accounts , wages, rental income, commissions, pensions, Social Security, and even life insurance. Tangible assets like cars or real estate are also fair game.

The law mandates prior notification of the taxpayer about their debt, a formal levy notice, and an opportunity for a hearing. Only if there is no response can the levy action proceed.

The IRS has the power to extract funds from your bank account for unpaid tax balances. The tax agency will dispatch Letter 1058, 'Final Notice of Intent to Levy,' before it actually seizes your bank account.

If the IRS threatens wage seizure, a portion of your wages will be directed to the IRS each pay period until alternative payment arrangements for your overdue taxes are made, the amount you owe is settled, or the levy is lifted as part of another legal agreement.

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Money

When the IRS imposes a bank levy, the account funds are frozen and out of reach. Moreover, your bank may impose a $100 processing fee. Funds deposited post-levy date can usually be withdrawn or utilized.

A portion of your salary may be exempt from the levy, and this exempt amount will be paid to you, ensuring you still have an income. If the amount causes a 'hardship,' there are avenues to appeal to the IRS. The exempt amount is determined by the standard deduction and the number of dependents claimed.

In certain situations, the IRS has the power to seize property to fulfill tax obligations. This can include homes, cars, trucks, boats, and specific types of land.

The IRS sells these seized items at auction to cover the tax debt, and if the auction prices don't meet the debt, the individual is still responsible for paying the difference.

Many people opt to redeem their property before dealing with the IRS, which allows them to repurchase the property, similar to a homeowner who has mortgaged their real estate paying off the debt. However, those 'reclaiming' real estate after purchase may need to pay the winning bidder the purchase price plus 20% interest per year, compounded daily, or file an appeal, which can also be done prior to the seizure.

The IRS also holds the power to directly withdraw funds from a bank account held in a third party's name, provided the debtor is listed as a beneficiary or account holder.

If a business employee, vendor, customer, or another third party has a levy placed against them, the business owner is obligated to surrender any property they hold that belongs to the person being levied against.

However, they are not allowed to seize lump sum death benefits, survivor's benefits paid to children, or Supplemental Security Income (SSI). Levies do not occur instantly. Initially, the person will receive a notice outlining the amount due and a formal request for payment.

If this notice is disregarded, a final warning is sent, indicating the intention to levy and the right to challenge it. If there is still no response or agreement to pay, the state can intervene.

For queries about a levy for overdue tax debts, visit the Internal Revenue Service or IRS website at www.irs.gov/payments/get-help-with-tax-debt or contact them at 1-800-829-7560.

For inquiries about a levy for delinquent non-tax debts, visit the U.S. Department of the Treasury website at www.fiscal.treasury.gov/top/contact.html or reach out to them at 1-800-304-3107.

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