Releasing a levy

They must release your levy if any of the following occur:

  • You pay the tax, penalty, and interest you owe.
  • They discover 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 them collect the tax.
  • You have an installment agreement, or enter into one, unless the agreement says the levy does not have to be released.
  • They determine that the levy is creating a significant economic hardship for you.
  • 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, they 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, or
  • The expense of selling your property would be greater than the fair market value of the property.

Returning levied property

They can consider returning levied property if:

  • They levy before they send 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).
  • They did not follow their own procedures.
  • They agree to let you pay in installments, but they still levy, and the agreement does not say that they can do so.
  • Returning the property will help you pay your taxes.
  • Returning the property is in your and the government’s best interest.