An erroneous IRS tax levy is any levy that is premature of improperly filed. You can try to stop on improper levy before it happens or request a return of property that was erroneously levied.
Examples of Erroneous Levies
Any of the following situations could be erroneous levies:
- Premature levies issued before the required waiting periods have elapsed.
- Levies issues before all required IRS notices were sent to the taxpayer.
- Levies of property that is exempt from seizure by law.
- An IRS levy issued during the automatic stay in bankruptcy.
- The cost of seizing and selling the property was greater than the value of the property, resulting in no realizable gain to the IRS.
- Levies issued while an installment agreement request, Offer in Compromise, or innocent spouse relief request was pending or had been accepted.
- A levy issued while the Office of Appeals or Tax Court was considering your case.
The levy can also be erroneous if you have already paid your tax debt in full, or if the statute of limitations on collection has expired.
Erroneous Levy Claims
You can make an erroneous levy claim before the levy occurs using the Collection Appeals Program (CAP). You’ll have the chance to present your case before the proceeds are turned over to the IRS.
If the property has already been seized, you will need to file an administrative levy claim. Levied property or the proceeds from selling the levied property may be returned up to two years after the erroneous levy takes place.
If your erroneous levy claim is accepted, your levied property or its proceeds should be returned to you. However, you may still owe back taxes, penalties, and interest to the IRS.
If you haven’t already negotiation a tax debt resolution, the IRS may attempt to levy the same property again or to levy other assets or your wages. You can avoid IRS levies by negotiating a payment plan, Offer in Compromise, or another type of tax resolution.
Contact a tax attorney immediately if the IRS is attempting to levy your property and you want to negotiate a deal to settle your tax debt and protect your assets.
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.