IRS Collections

• The IRS has collection powers that outstrip those of non-government creditors. For example, the IRS can also levy assets that most creditors can't seize, such as your Social Security benefits. In addition, the IRS does not need to get a court order to place a lien on your property or levy your wages or assets. Instead, the IRS can serve or send you a notice stating its intention to begin levying your assets. If you receive such a notice, don't ignore it. You can request a review of your case if you dispute the IRS's claim that you owe taxes. You can also ask about alternatives to a levy, such as an installment agreement.
  
  

Levies

• A levy, sometimes called a "garnishment," is a legal process for seizing your assets. The IRS can levy assets that you have in your possession, as well as assets that third parties hold for you. For example, a portion of your future wages, held by your employer, can be levied (seized) by the IRS to pay off your tax debt. The IRS can also levy money in your bank and investment accounts.
  
  

Alimony

• Alimony, also known as spousal support, is money paid by a separated or divorced spouse on an ongoing basis. Spouses may agree to an alimony obligation as part of their separation agreement or divorce settlement, or a family court may order one spouse to make these payments to the other. If you receive alimony, that money is not protected from a levy and the IRS can serve your spouse with a levy that orders him to pay your alimony directly to the IRS. The IRS doesn't levy child support payments, however, as these payments benefit your children, not you.
  
  

Options

• If you depend on your alimony payments to pay your day-to-day bills, contact the IRS. You may be able to secure economic hardship relief. The levy notice from the IRS contains a phone number that you can call. Explain to the IRS representative the levy is causing you financial difficulties. Be prepared to document this information with information that backs up your claim, such as pay stubs, proof that you are on unemployment and bank statements.
  
  If the IRS withdraws the levy, you will still owe the tax debt, along with penalties and interest. The economic hardship withdrawal won't stop the accrual of interest and penalties, according to the "Tax Bill & IRS FAQ" on Nolo.com. The IRS representative can inform you of your options for dealing with your tax debt, including setting up a payment plan or making an "offer in compromise," which settles your tax debt for less than you owe.