Is the IRS Still levying people who owe back taxes? A crazy question - right? Well in the age of a much more austere IRS it's not a silly question at all. The IRS budget has been shaved by 17% since 2010 with more reductions possibly to come(?). With a bigger population now and more IRS headaches to solve including scams, identity theft and the administration of the ACA, their reduced budget gets spread pretty thin. From our vantage point, the biggest reduction of levies and garnishments has come from the Automated Collection Systems of the IRS (ACS). Levies from ACS have become an endangered species of sorts even when someone receives a form CP504 like this.
On the other hand, it's Revenue Officers (R.O.'s) - those folks assigned to your tax problem case locally - who are issuing most of the levies and garnishments these days. Generally, it takes a $250,000 plus liability to get a R.O. assigned or possibly a lot of un-filed returns and economic activity (big 1099's, etc.). Revenue Officers initiate contact to you and/or your tax professional with a business card drop-off and/or other correspondence. R.O.'s truly intend to levy UNLESS you propose an alternative resolution like Offer in Compromise, Currently Not Collectible or Installment Agreement.
Government hasn't been exactly predictable lately :) One never knows whether IRS enforcement could increase or decrease. Private tax collections is underway but it seems to be an ineffective alternative to the IRS. The private guys lack enforcement power like levies and the public has been so inured to phone calls from IRS scams - they quite possibly might ignore them (they should).
Against the general trend of less enforcement on back taxes, passport holders who owe more than $50,000 to the IRS can get their passports revoked (unless they are in a payment plan or an Offer in Compromise).