When the IRS issues a levy against you, they are engaging in a legal seizure of your property to fulfill an outstanding tax debt. To issue a levy, the IRS must first meet certain requirements, and once a levy has been issued, you have a right to file a claim to have your property returned to you.
When Can the IRS Issue a Levy?
The IRS can issue a levy if you have not paid your taxes and have not agreed to pay in installments. Typically, the IRS will only take this action once they send you a tax bill you have ignored or refused. In most cases, the IRS is also required to send you a Final Notice of Intent to Levy and a notice of your right to a collection due process (CDP) hearing before issuing a levy. They will also notify you of their ability to contact third parties like your bank or employer seeking collection.
What Can You Do?
If you did not request a CDP hearing before the levy was issued, you still have a right to request an equivalent hearing after the fact. At this hearing, you can request that the IRS release the levy if it is causing you significant economic hardship. You also have a right to request an installment agreement as an alternate means of paying your tax debt, or if you believe that the tax debt is mistaken or incorrect, you may be able to contest the levy altogether. Furthermore, if you believe that the tax debt is the sole responsibility of your spouse, you can raise a spousal defense at the equivalent hearing. If your request to release the levy is denied, you also have the right to appeal the IRS’s denial.
Requesting a levy release and resolving your tax liability can be complicated. Strict timelines and procedures can cause missteps and leave you frustrated about how to proceed. The tax professionals at Highland Tax Group can help. Contact us today.