A tax levy is the actual seizure of a taxpayer’s property by the government in order to resolve delinquent tax debt. The tax levy is probably the IRS’s most potent tool to deal with delinquent taxpayers. It quickly gets the Taxpayer’s attention and is the most common reason that new clients come to our Richardson, TX office. The IRS issues tax levies after they have sent several notices to the taxpayer that have gone unanswered, or the taxpayer has failed to stick to an agreement.
What You Should Do If You Receive a Final Notice of Intent to Levy?
Before you are levied, you will receive a Final Notice of Intent to Levy. At that time, you will also receive notice of your right to a Collection Due Process (CDP) hearing. You can request a CDP hearing by filing IRS Form 12153 within 30 days of the notice. By filing form 12153 timely, the IRS will cease collection efforts (not levy you) while the appeal is pending, giving you the opportunity to work with the IRS to avoid the levy. See our blog on Collection Due Process rights to learn more.
It's Too Late. What I Should Do Once I'm Levied?
If you are levied, the key to having the levy released it to do what you should have done when you received the previous notices from the IRS
First call the IRS. Communicate your goal to get them everything that they need from you and to work with them to set up an alternative resolution. You should communicate that if they give you a certain period of time (for example, 2 or 4 weeks), that you will
- Get into tax compliance if you are not already in it,
- Provide them with the appropriate Form 433 so that the IRS has your financial information,
- Provide a resolution alternative based on what you qualify for (Payment Plan, Offer In Compromise, etc…)
- By doing so, you are telling the government what they want to hear and what they need from the taxpayer to make an agreement.
- If the IRS is unwilling to release the entire amount, request amounts needed to pay critical bills. Once again, the IRS does not have to do so, but often will.
- Get into tax compliance as promised on the call.
- Provide the IRS with the requested information and propose a collection alternative.
- The IRS should release the levy if they have not already.
- If they do not, consider a CAP Appeal Request (Form 9423) or TAS (Form 911)
If you need help with an IRS Collection issue, I’d be happy to talk with you. Please give me a call at (972) 821-1991 or email me at bob@jablonskyandassociates.
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