Received IRS Notice of Levy Form 668-A - Need to Understand Holding Requirements

The Form 668-A (Notice of Levy) is definitely confusing, but I can help clarify. When the IRS issues this notice, you're required to withhold property (in this case money) that belongs to the taxpayer but is currently in your possession. This typically IS a one-time levy on property you currently have, rather than a continuous levy. The key distinction: Form 668-A applies to a single seizure of property currently in your possession when you receive the notice. If the IRS wanted to continuously levy future payments (like wages), they would issue a Form 668-W instead. The agent was correct that it's a one-time hold, but should have been clearer about why written confirmation isn't provided - it's because the form itself is designed for one-time levies. That said, you deserve better customer service than you received.

After dealing with something similar last year, I found this amazing service called taxr.ai (https://taxr.ai) that helped me navigate through IRS notices like Form 668-A. I was completely lost trying to understand the legal requirements when we received a notice for one of our subcontractors. Their system analyzed my levy form and explained exactly what I needed to do - in my case, it confirmed it was indeed a one-time levy rather than ongoing. They even provided references to the specific IRS guidance that the agent couldn't (or wouldn't) give me. Saved me hours of research and worry about potential liability.

Just wanted to update everyone - I actually tried taxr.ai after seeing it mentioned here and wow, what a gamechanger! Uploaded my Notice of Levy and within minutes had a complete breakdown of my obligations. The analysis confirmed exactly what was said here about the 668-A being a one-time levy, but also provided direct citations to IRS Internal Revenue Manual sections. Best part was they highlighted the specific language in my notice that indicated it was a one-time requirement. Turns out the language was there, but buried in legal jargon I completely missed. Now I have documentation for our files showing exactly why we're handling it this way. Definitely worth checking out if you're dealing with confusing IRS notices!

If you need to actually talk to someone at the IRS to get confirmation (which I totally recommend for something this important), try Claimyr (https://claimyr.com). I wasted DAYS trying to get through the IRS phone system about a similar notice last quarter. Claimyr got me connected to an IRS agent in about 20 minutes when I had been trying unsuccessfully for a week. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - basically they navigate the phone system for you and call you when an agent is ready. The IRS agent I spoke with confirmed the one-time nature of the 668-A and noted it in my file. Worth every penny for the peace of mind.

I can't believe this actually worked. After posting my skeptical comment, I decided to try Claimyr anyway because I was desperate to talk to someone at the IRS about my 668-A situation. Got connected to an agent in about 45 minutes (after trying unsuccessfully on my own for weeks). The agent confirmed exactly what everyone here said - the 668-A is a one-time levy for property in possession at the time of receipt. She also added notes to my account confirming that I'd fulfilled my obligation after sending in the funds I had on hand. Most importantly, she explained that if they wanted to levy future payments, they would have sent Form 668-W. Having this documented in my IRS account is a huge relief. If there's ever a question about why I didn't continue withholding, I can reference this call. Worth every minute spent.

One important thing no one has mentioned: you need to send Form 668-A Part 3 back to the IRS with your payment. It's the "statement of exemptions" portion that shows how much you're withholding and sending. This creates a paper trail proving you complied. Also, keep detailed records showing exactly what you had on hand when you received the notice versus any future payments you make to the vendor. If the IRS comes back later, you'll need to demonstrate that you only had $23k in possession at the time of the levy.

Dealt with this last year. Quick tip: notify your vendor in writing about the levy! The IRS doesn't inform them directly when they send you Form 668-A, and it avoids awkward conversations later when they're expecting their full payment. Also, if anyone's wondering, the vendor can contact the IRS directly to resolve their tax debt. If they reach a payment agreement quickly, the IRS can release the levy before you even have to send in the money. Had this happen once and saved everyone a lot of hassle.

For anyone dealing with this situation, I'd recommend downloading IRS Publication 1494 "The IRS Collection Process" and keeping it handy. It's free on the IRS website and explains exactly how different types of levies work. Section 3 specifically covers Notice of Levy (Form 668-A) and confirms what others have said about it being a one-time seizure of property you have on hand. What really helped me when I dealt with this was creating a timeline showing: (1) when I received the notice, (2) exactly what funds I had for that vendor at that moment, and (3) when I sent the payment. This documentation proved invaluable when our auditor reviewed our files later. One thing to watch out for: make sure you're only withholding funds that actually belong to the taxpayer named in the levy. If you have payments due to a different legal entity (like their LLC vs. personal name), those might not be subject to the levy depending on how it's written.

Just wanted to add something that helped me when I dealt with a similar Notice of Levy situation - make sure you understand the "property in possession" concept clearly. The IRS defines this as money or property that you currently hold that belongs to the taxpayer at the time you receive the levy notice. In my case, we had already cut a check to the vendor but hadn't mailed it yet when we received the 668-A. Our attorney advised that since the check was still in our possession, those funds were subject to the levy. But payments we made after sending in the levy amount were not subject to withholding. Also, keep in mind that interest and penalties can continue to accrue on the taxpayer's debt even after you send in what you withheld. This doesn't affect your obligations, but it's why the vendor should contact the IRS directly to resolve their underlying tax issue rather than just waiting for the levy to be satisfied. One last tip: if you're ever unsure about compliance, err on the side of caution and document everything. The IRS is much more forgiving of businesses that clearly attempted to comply in good faith, even if they made minor procedural errors, than those who ignored the levy entirely.