Taxpayer’s don’t forget!! The tax reform legislation enacted in December 2017 gives you more time to challenge an IRS levy! The legislation extended the time limit from nine months to two years for taxpayers to take action against a wrongful IRS levy. This will help taxpayers who are wanting to file an administrative claim or bring civil action for wrongful levy or seizure. This change only applies to levies made after December 22,2017.
For those of you who don’t know, an IRS levy permits the legal seizure and sale of property to satisfy a tax debt. The term property in this case includes your wages, money you have in your bank or other financial accounts, your vehicles and any homes or properties you own. You will receive a notice of levy from the IRS before they take any action. There will be a certain time frame you must respond by before the IRS can levy you. Levy can take form of a bank levy, wage garnishment, seizure of property or other ways. There are ways to stop an IRS garnishment or levy.
Before the IRS can levy you, three requirements must be met. The IRS has to send you a tax bill showing what you owe and for what year. This notice should have information on your tax debt, when payment is do, what tax years you owe for and if you need to take any steps. They will demand payment from you in the letter. To be able to be levied, you not only have to receive your tax bill, you also have to have made no action to pay or settle your tax debt. If you are in a resolution or payment plan with the IRS and haven’t defaulted, you cannot be levied for that year. The IRS can levy you for another tax year if you have not paid that tax debt, but they cannot levy you for a tax year you are paying off. The last requirement that must be met before you are levied is the IRS must send you a Final Notice of Intent to Levy. Along with the Final Notice, the IRS must include your rights for a hearing on the notice. The IRS can give you the Final Notice either in person, leave it at your home or business, or the last known address they have on file, or mail it to the address on file. If you have moved frequently or haven’t changed your address as you’ve moved, your letters could be going to the wrong address.
For those challenging the levy, the timeframe to challenge the levy applies when the IRS has already sold the property it levied. Taxpayers can make an administrative claim for return of their property within two years of the date of the levy. If an administrative claim is made within the extended two-year period, the two-year period for bringing suit is extended for one of two periods, whichever is shorter: 12 months from the date the person filed the claim or six months from the date the IRS disallowed the claim.
If you have received a Final Notice or Intent to levy or are currently dealing with an IRS bank levy or wage garnishment, Polston Tax Can Help! Our team of tax attorneys and accountants can help get the IRS off your back and keep your money safe. Give us a call at 844-841-9857 or click below to schedule your free consultation!