You just got a letter that says the IRS plans to take money from your paycheck, bank account, or other property if a tax debt is not resolved. An IRS levy is the federal government's legal seizure of your property to collect unpaid taxes. Unlike a tax lien, which is a claim against what you own, a levy is the actual taking of money or property. The IRS can levy wages, bank funds, tax refunds, and sometimes vehicles or other assets after giving required notice. The main federal authority is Internal Revenue Code Section 6331, and taxpayers usually have a right to a Collection Due Process hearing before the levy moves forward.

What makes a levy so serious is how fast it can disrupt daily life. A bank levy can freeze money already in the account, and a wage levy can keep hitting each paycheck until the debt is addressed. For someone living paycheck to paycheck or working seasonal jobs, that can turn into a crisis quickly, the way a sudden whiteout squall can shut down a normal drive on I-96.

In an injury claim, a levy can affect settlement money once it reaches your account, and tax debt can complicate negotiations if you are counting on funds for medical bills or lost wages. A pending levy is often a reason to look at an installment agreement, offer in compromise, or other relief before money is paid out.