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When to Make an Administrative Wrongful Levy Claim

IRS tax lien

What is an Administrative Wrongful Levy Claim?

You can file an administrative wrongful levy claim when the IRS seizes property to collect tax revenue owed by another person and you have a superior right to this property. This typically means you either own the property or have a security interest that was filed before any IRS tax lien was filed.

If your property was levied because of taxes you owe, you’ll need to either appeal the levy at a collection due process hearing or ask for a levy release. Wrongful levy claims are limited to cases where the tax debt at issue is owed by another person.

When to Bring Your Wrongful Levy Claim

The time limit to bring a wrongful levy claim depends on the type of property at issue and whether it has been sold. If non-cash assets were seized and haven’t been sold yet, you can bring wrongful levy claim at any time.

For assets that were seized and then sold, you have two years from the date the notice of seizure was given to the property owner. You also have two years from this date when cash is turned over to the IRS from the person who was served the levy.

This two-year period was recently enacted as part of the Tax Cuts and Jobs Act. For levies deliver on or before March 22, 2017, the period to file a wrongful levy claim was nine months.

Filing the Claim

File your written request with the appropriate Collection Advisory Group office, which you can find using Publication 4235.

In your request, you’ll need to include the following information:

  • A detailed description of the levied property.
  • Your basis for claiming an interest in the property
  • Information about the taxpayer who was served the levy and the IRS office that issued the levy
  • The date of the levy
  • Supporting documentation to prove your claim

If your claim is accepted, you may have the property returned to you. If the property has been sold, you may receive the proceeds of the sale or the fair market value of the property.

If your request is rejected, you can appeal this decision under the Collection Appeals Program or file a lawsuit in United States District Court.

Contact an Attorney

Get free, no-obligation tax advice from a Michigan tax lawyer by calling Ayar Law at 248-262-3400 today.

Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.