A wrongful IRS levy is a levy of assets that belong to someone other than the taxpayer. This third party must file an administrative wrongful levy claim to stop the levy or seek a return of levied property.
How Wrongful Levies Occur
The IRS may seize a taxpayer’s property to seek repayment for delinquent tax debt. Sometimes, the IRS mistakenly takes property that belongs to someone other than the taxpayer.
In these cases, the third party is responsible for informing the IRS of the wrongful levy.
Procedure for Wrongful Levy Claims
You can file an administrative wrongful levy claim in writing or bring a civil action against the United States in District Court. You also have the option of going to court after you’ve exhausted your administrative remedies.
You can use this procedure when the levied property is yours or if you have a superior claim on the levied property. For example, the IRS may levy your money from a joint bank account you own with a delinquent taxpayer. You may be able to file an administrative wrongful levy claim if you can show that the levied funds are yours.
You’ll need to provide the following information with your claim:
- Your name and address
- A detailed description of the levied property
- Proof of your superior claim to the property
- The name and address of the delinquent taxpayer
- The IRS office that issued the levy and the date of the levy
- Any other information to support your claim
Timeline for Wrongful Levy Claims
You have a limited time to bring a wrongful levy claim. However, if the IRS still has possession of the levied property and it was specific property (not money), you can bring your claim at any time.
If the levied property has already been sold, you can request the return of the proceeds of the sale within 2 years of the date of the levy.
If your claim is denied, you can appeal the decision through the Collection Appeals Program.
If the IRS has wrongfully issued a bank levy or other type of levy against your property, contact a tax attorney to discuss your options for avoiding the levy or seeking a return of levied property.
The Gartzman Law Firm can help you with levies and other IRS tax problems. Use our contact form to request a consultation with an Atlanta tax resolution attorney.