IRS Levy…Need More Time?!

In Accounting & Finances, Business, Taxes on September 10, 2018 by Sufen Wang

Clock Ticking on Challenging an IRS Levy? Now More Time is On Your Side

Taxpayers may be singing a new tune this year along the lines of “I fought the law and the law…didn’t win because I now have more time to challenge a levy!” It doesn’t have quite the ring of the original song, but it does bode well for individuals and businesses who think they’ve been hit with a wrongful IRS levy or seizure. Based on new legislation, the time limit to file an admin claim/bring civil action jumped from 9 months to 2 years, granting extra time to either procrastinate or make your case known.

A CRASH course in levies: if you have an outstanding tax debt, it doesn’t just slink away. The IRS can place a levy, which makes it perfectly legal for your property to be seized and sold to satisfy your debt, never to be seen by you again. Yes, your car, your house, and your boat are up-for-grabs, along with wages, and moolah in the bank and other financial accounts.

But wait, there’s a twist! Even if the IRS already sold your levied property, you can get it back – and that’s the scenario where the extended 2-year period comes into play. If – and only if – your property was already hocked, you get 24 whole months from the levy date to file an administrative claim to get your stuff back. The IRS points out that, “Usually, wrongful levy claims involve situations where an individual or business believes that either the property belongs to them, or they have a superior claim to the property that the IRS is not recognizing.”

But wait, there’s another twist! If you do make an administrative claim within the extended 2-year period, you score another extension. Depending on which is shorter, the 2-year period for bringing suit is extended for either:

  • 12 months from the date you filed the claim; OR
  • 6 months from the date the IRS disallowed the claim.

All this only applies to levies made before, on, or after 12/22/17, as long as the previous 9-month period hasn’t expired. Remember that if the IRS still has the property it levied, there’s no time limit for filing that claim – through the motto “sooner is better than later” is always apt.

But wait, there’s one more twist that could spare you the trouble of the prior twists. Anyone who gets the IRS bill, “Final Notice of Intent to Levy and Notice of Your Right to A Hearing,” should immediately get in touch with the IRS. Even at this ultra-super-late-final-notice-why-did-you-wait-so-long-stage, you still might be able to make arrangements to pay your tax liability, instead of having the IRS go to town with a levy.

There are lots of opportunities to clear your tax debt before the IRS comes a-knockin’ for your property. However, if it gets to the point where they’ve already confiscated your belongings, at least now you have a little extra time to get your stuff together to submit that administrative wrongful levy claim to get your stuff back.

Sufen Wang, M.S. Accountancy
Wang Solutions, Long Beach, CA (562) 856-0793

Editor: Hannah Huff, M.F.A. Creative Writing: Poetry, (626) 806-5805

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