November 22, 2021

Regardless of IRS Levy Form Issued, Continuous Levy Attaches to Future Rental Income

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Among other collection enforcement methods, the IRS is authorized under the appropriate circumstances to initiate a levy—an administrative collection tool whereby the IRS seizes a delinquent taxpayer's property in order to satisfy their unpaid tax liabilities. When exercising its authority to levy, the IRS is not required to obtain a judgment against a delinquent taxpayer; rather, according to the Internal Revenue Code (IRC) §6331(a), “all property and rights to property” belonging to a taxpayer are subject to levy.¹ Generally, when a taxpayer’s property is held by another party and may be relinquished by writing a check (i.e., bank account, business receivables, etc.), or when wages or salary are in the crosshairs, a notice of levy appears as one of the Forms 668-A, 668-W or 668-R.² Recently, the IRS issued a short Chief Counsel Advice Memorandum (CCA) which reminded readers that: (1) rental income is generally subject to levy, and (2) either of Forms 668-A or 668-W could be appropriately used “in the context of levying current and future rental payments.”³

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In the CCA, the IRS considered case law, treasury regulations and a long-standing Revenue Ruling to reiterate that rental income may indeed be subject to a levy with continuous effect. More specifically, the IRS stated that:

Rental income is generally subject to a levy with continuous effect meaning that, to the extent that future rental liabilities are fixed and determinable, meaning the terms are provided for in a rental contract, the single levy reaches both current and future rental payments.⁴

Additionally, while the IRS typically uses Form 668-A, Notice of Levy on Wages, Salary, and Other Income for levying wages and salary, the CCA clarified that the use of Form 668-W does not invalidate the levy nor its continuous attachment in the context of future rental income. The IRS stated in the CCA that it had not:

“located any guidance or authority expressly addressing whether a Form 668-A or a Form 668-W should be used in the context of levying current and future rental payments.”


Remember, not only can IRS levies attach to future rental income—once attached, the levies may stick longer than you might realize. According to current IRS guidance and caselaw, even after the statute of limitations on collection ends, a levy on a fixed and determinable rent stream survives until the full liability is satisfied.⁵ Along this line of reasoning, a levy on future rent payments, even under a month to month lease, does not need to be periodically reissued because “the IRS has historically recognized contract rights as a right upon which one levy is sufficient to cover payments deferred until the future.”⁶ Especially considering the recent efforts to increase and improve the IRS’s enforcement powers in conjunction with its already comprehensive authority to levy, we urge you to be vigilant and seek guidance from experienced tax professionals whenever you have questions or concerns about IRS levies. Contact the Frost Law team today at (410) 497-5947 or schedule a confidential consultation with our contact form.


  1. See also United States v. Nat'l Bank of Commerce, 472 U.S. 713 (1985); Chevron, U.S.A., Inc. v. United States, 705 F.2d 1487, 1489-90 (9th Cir. 1983).
  2. Note that a Form 668-B is used when the IRS directly seizes property of a type that may not be converted by writing a check. In this case, the IRS takes physical possession of the property and sells it a public sale.
  3. CCA 202137010.
  4. CCA 202137010. See also Treas. Reg. §301.6331-1(a); KMG Properties v. Internal Revenue Service, No. 08–1544, 2009 WL 1885930, at *8 (W.D. P.A June 30, 2009); Revenue Ruling 55-210 (Jan. 1, 1955).
  5. Dean v. United States, No. 20-14421, 2021 WL 2689599, at *3 (11th Cir. Appeals June 30, 2021) (citing 26 C.F.R. §301.6343-1(b)(1)(ii) (“a levy on a fixed and determinable right to payment which right includes payments to be made after the period of limitations expires does not become unenforceable upon the expiration of the period of limitations and will not be released under this condition unless the liability is satisfied”)).
  6. KMG Properties, at *8.
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