IRS Levy Procedures
The IRS must follow certain procedures before seizing your property. Typically, that process goes something like this:
- You receive a notice stating that tax has been assessed and asking you to pay it.
- You don’t pay or resolve the matter by the deadline.
- A Final Notice of Intent to Levy is sent to you.
If these notices aren’t sent, the levy may be improper and you could request a levy release. When these procedures are followed, you have 30 days to request a hearing and attempt to stop the levy.
Levy Without Notice
There are limited circumstances where the IRS doesn’t need to let you know about the levy until after it takes place. Those situations are as follows:
- The IRS believes the collection of the tax is in jeopardy
- Levy of a state tax refund.
- Levy for tax debt owed by a federal contractor.
- Levy for unpaid employment taxes when the taxpayer has previously requested a Collection Due Process (CDP) hearing for employment taxes in the past two years.
Jeopardy levies aren’t common. They should only be used in situations where the taxpayer appears likely to flee the country, transfer their assets out of the country, or is about to become financially insolvent.
When any of these levies take place, you should still receive an IRS notice. It will inform you of your right to contest the levy after it takes place. Make sure you preserve your appeal rights and meet all deadlines if you don’t agree with the levy.
The 30-Day Deadline
If you don’t request a CDP hearing within 30 days of the notice, the IRS can move forward with the levy. You still have the right to request a hearing in these cases, as long as it’s been less than one year since the levy notice was issued. These are known as equivalent hearings.
You lose two important rights when you miss the deadline for a CDP hearing. First, the IRS doesn’t have to wait until the hearing is completed to move forward with the levy. Second, you don’t have the right to appeal the decision to Tax Court.
Consult with a tax attorney immediately after you receive a Notice of Intent to Levy so that you can appeal the decision before your assets are seized.
Contact an Attorney
Ayar Law provides creative solutions to your tax problems, including Offers in Compromise and audit defense. Call us at 248-262-3400 to get free, no-obligation tax advice from one of our tax attorneys.
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