Overview

Enforced collection actions are the legal methods tax authorities (most commonly the IRS) use to collect unpaid tax liabilities when ordinary collection efforts fail. These actions include: levies (seizing bank accounts or other property), garnishments (directing an employer or payer to withhold wages), and seizures (taking physical property such as vehicles or business equipment). For official definitions and procedures, see the IRS collection pages on levies and liens IRS collections and Collection Due Process rights IRS CDP.

How the process usually unfolds

  • Notice and demand: The IRS sends a bill (notice and demand for payment). If the bill is ignored, collection escalates.
  • Final notice: Before most enforced actions the IRS must send a “Final Notice — Notice of Intent to Levy and Notice of Your Right to a Hearing”. You typically have 30 days to request a Collection Due Process (CDP) hearing to dispute the levy. (See IRS CDP rights.)
  • Levy or seizure: If unresolved after notices and any hearing opportunities, the IRS can issue levies on assets or instruct third parties (like banks or employers) to surrender funds.

Key differences: levy vs garnishment vs seizure

  • Levy: A legal seizure of property to satisfy a tax debt. Common targets include bank accounts, retirement plan distributions (subject to rules), and accounts receivable. IRS: Levy.
  • Garnishment: Often used interchangeably with wage levy; the IRS can issue a levy to a third party (your employer) to withhold part of your wages. State laws also create wage garnishments for non-tax debts—rules and limits differ.
  • Seizure: Physical removal of property (vehicles, business equipment, real estate) when other collection measures fail. The IRS has procedures for sale and for protecting certain exempt property.

Exemptions and limits

Some income and property are protected from levy under federal law (for example, certain public benefits). The Internal Revenue Code and IRS guidance list exempt items and limits on how much can be taken. For Social Security and similar benefits, consult IRS guidance and Consumer Financial Protection Bureau resources on debt collection.

Real-world impact (practitioner insight)

In my 15 years helping clients with tax problems I’ve seen enforced actions quickly magnify financial stress—bank levies can freeze operating capital for small businesses, and wage levies can make payroll unaffordable. Early response almost always produces better outcomes than waiting for enforcement.

Immediate steps if you receive a levy or seizure notice

  1. Read the notice carefully and note the deadline to request a CDP hearing (usually 30 days).
  2. Contact the IRS immediately using the phone number on the notice—ask for collection options and whether an installment agreement or temporary hold is possible.
  3. Gather financial documents (bank statements, pay stubs, monthly budget) to prove hardship or to prepare a proposal.
  4. Consider professional representation (CPA, enrolled agent, or tax attorney) to request relief and negotiate—representation can prevent costly mistakes.

Options to stop or limit enforced actions

  • Payment plans: An installment agreement can stop levies if the IRS accepts and you stay current.
  • Offer in Compromise (OIC): If you cannot pay in full, an OIC may settle the debt for less than owed. See our article “Offer in Compromise: How Income Versus Equity Affects Eligibility” for details and qualification factors.Offer in Compromise: How Income Versus Equity Affects Eligibility
  • Prepare documentation: A realistic OIC requires complete income, expense, and asset documentation—see our guide “Preparing a Realistic Offer in Compromise: Income, Expenses, and Supporting Docs.”Preparing a Realistic Offer in Compromise: Income, Expenses, and Supporting Docs
  • Collection Due Process (CDP) or Equivalent Hearing: Request a hearing within the timeframe in the final notice to challenge the levy or propose alternatives. See IRS CDP guidance IRS CDP.

Common misconceptions

  • Ignoring notices will stop enforcement: False. Delays usually make matters worse and can lead to levies or seizures.
  • The IRS will take everything: False. Federal law and IRS rules protect certain income and necessary property; but protections are limited and must be claimed.

When to seek professional help

If the IRS has issued a levy, a qualified tax professional can: request a CDP hearing, negotiate an installment agreement or OIC, request a seizure hold for hardship, and advise on bankruptcy implications. In my practice, early engagement often preserves business operations and reduces personal hardship.

Authoritative sources

Professional disclaimer

This article is educational and does not constitute legal or tax advice. For personalized guidance about levies, garnishments, or seizures, consult a qualified tax professional, enrolled agent, or tax attorney.