Challenging Wrongful IRS Levies
When taxpayers fail to pay tax debt, the IRS is permitted to issue a levy against them, which permits the agency to seize and sell the taxpayer’s property, including wages, vehicles, real estate, personal assets, and the contents of financial accounts in order to cover the liability. Previously, those against whom a levy was issued only had a brief amount of time in which they could challenge the agency’s claim. However, under the recently enacted Tax Cuts and Jobs Act, which went into effect this year, businesses and individuals now possess more time to file a claim or to bring a civil action against the IRS for wrongful levy or seizure. Filing this type of action is difficult, especially for those who are not represented by an attorney, so if you were recently notified by the IRS that your property is now subject to a levy because of an overdue tax debt, it is essential to contact an experienced tax attorney who can help protect your interests, whether in the courtroom or during settlement proceedings.
Before the Tax Cuts and Jobs Act was enacted last year, when a taxpayer’s property was seized, third parties only had nine months to file an administrative claim or a civil lawsuit for wrongful levy against the IRS. However, under the new law, individuals and businesses now have two years to file this type of claim. In fact, as long as an administrative claim requesting the return of seized property is filed within the two year period, the deadline for filing suit in court is extended a further 12 months from the date that the claim was filed or for six months from the claim’s rejection, whichever time period is shorter. This change applies to all levies issued after December 22, unless the nine month period has not yet expired, in which case, the change applies to levies made on or before that date as well. It’s also important to note that these deadlines go into effect after the IRS has already sold the property seized from taxpayers.
Although the new tax law made major changes to levy-related provisions, some aspects of prior law remain the same. For instance, there is still no time limit for filing an administrative claim if the IRS still retains ownership of the property it seized. Similarly, taxpayers are not permitted to file a wrongful levy claim or to bring a wrongful levy lawsuit against the IRS.
Schedule a One-on-One Meeting with a Dedicated Tax Attorney Today
If you have received an IRS notice of intent to levy, please contact Florida attorney Ronald Cutler, P.A. at 386-490-9949 today for an initial case review. In many cases, taxpayers who take this step are able to negotiate with the IRS to pay the liability in installments, rather than having the IRS proceed with the levy and seize their property.