A collector may also levy upon a taxpayer's property or rights to property. The most common levies are made against a taxpayer's wages or bank accounts by serving the levy on the holder of the property, but a levy may be made against any property or rights to property belonging to a taxpayer, whether real or personal, tangible or intangible, and may include a seizure of the property itself.
There are three types of levies served on holders of the taxpayer's property. The first type, the “Notice of Levy on Wages, Salary and Other Income” allows DOR to take a certain amount of a taxpayer's wages, salary or other income as payment of a tax liability. This levy remains in effect until the liability is paid in full. The second and third types, the “Notice of Levy” and the “Notice of Levy on Other Income,” are 60-day levies that allow DOR to take possession of the taxpayer's property or rights to property. They remain in effect for 60 days from the date they are first served or until the liability is paid in full or released, whichever first occurs, or until they become unenforceable by reason of lapse of time.
See 830 CMR 62C.55A.1 for exemptions to both the continuous and the 60-day levy.
There are instances when DOR employees levy against the real or personal property of the taxpayer by taking direct possession of it, i.e., by seizure. Before the seizure DOR will generally send the taxpayer a “Notice of Intent to Seize” and allow 10 days for the taxpayer to respond by paying the liability or making other arrangements satisfactory to DOR. If the property to be seized is located on private property, DOR will obtain a “Writ of Entry” from a court before seizure. At the time of seizure, DOR employees will take an inventory of all property seized, secure the assets and post the property with a “Notice of Seizure”. Neither the owner nor the public may gain access to the seized property.
631.2.2. Release of Seized Assets
Once assets are seized they can only be released if the taxpayer pays DOR the liability in full by bank check, postal money order, certified check or cash, or if the taxpayer enters into a payment agreement with DOR. The taxpayer must also reimburse the Commonwealth for any expenses incurred in connection with the seizure.
631.2.3. Sale of Seized Assets
If the taxpayer fails to pay the liability after the property has been seized, the assets will be sold. Assets are sold through public auction or at a sealed bid sale depending upon the type and quantity of property DOR holds. If goods are perishable or likely to decrease greatly in value if they are kept, DOR will appraise the property and, if the owner can be easily found, notify him of the appraisal. The owner may then redeem the property at the appraised price within the time specified in the notice. If the appraised price is not paid, the sale is held as soon as possible.
In most cases, DOR will notify the taxpayer that it intends to sell the seized assets. The notice will specify the property to be sold and the time, place, manner and conditions of the sale. Public notice of the sale will be posted at a city or town hall near the place of seizure or in a newspaper published or circulated within the county where the seizure occurred. The sale will generally be held no fewer than 10 days nor more than 40 days after the date of public notice.
A taxpayer may redeem property at any time prior to sale by paying the full amount owed which includes all expenses incurred while preparing for the sale. Real property may be redeemed up to 180 days after the sale has taken place.
631.2.4. Levy in Excess of Liability
Levies are often served on more than one person holding a taxpayer's assets. This may result in collections in excess of the amount the taxpayer owes. Excess collections may also result from the sale of a taxpayer's assets at a price in excess of his liability. Generally, where the amount of money received by the Department from the sale or levy of a taxpayer's property is in excess of the liability, the surplus will be returned to the taxpayer. However, in those cases where the Department is aware of other claims to the taxpayer's property, the Department may deliver the surplus to the court to allow interpleader proceedings.
631.2.5. Release of Property to Senior Creditors
If a taxpayer's debt to any creditor is senior to or has priority over the debt to the Commonwealth, the creditor may request that DOR surrender the seized property. The creditor must produce the following to substantiate the claim:
- the promissory note or mortgage showing the taxpayer's debt;
- the financing or Uniform Commercial Code (“UCC”) statement in the creditor's favor, reflecting the filing and recording date;
- the notice of default sent to the taxpayer; and
- a statement of balance due or an accounting of the taxpayer's indebtedness.
DOR's Seizure Unit will examine these documents before any property is released. Send documentation along with a letter of explanation to the Seizure Unit at:
Department of Revenue
P.O. Box 7021
Boston, MA 02204
For further information, call (617) 887-6400
Where property is equal in value or less than the amount of the senior lien, DOR will usually release the property to the senior lien holder. Where the property is worth more than the senior lien, DOR may choose to sell the encumbered property, subject to any and all encumbrances.
G.L. c. 62C, §§ 32(e), 53, 54, 55, 55A, 56, 57, 58, 60, 61, 62, 63, 64
830 CMR 62C.55A.1
830 CMR 62C.64.1
Notice of Levy
Release of Levy
Notice of Levy on Wages, Salary and Other Income
Releases of Levy on Wages (Salary and Other Income)