IRS Intent to Levy – Stop IRS Tax Debt – Essex, Morris, Bergen, Passaic, Union – New Jersey
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The Legal Authority for a IRS Tax Levy
The Internal Revenue Code (IRC) authorizes levies to collect delinquent tax. See IRC6331. Any property or right to property that belongs to the taxpayer or on which there is a Federal tax lien can be levied, unless it is exempt.
IRS Notice of Levy vs. IRS Seizure
There is no legal distinction between levy and seizure.
Generally, use a notice of levy (Form 668-A/668-W) to take a taxpayer’s property held by someone else if it can be turned over by writing a check.
Notice of Levy is often used to take a taxpayer’s bank account, wages, other income, or accounts receivables.
Seizure procedures are used to take a taxpayer’s car, house, or business property.
If a taxpayer’s car is seized in a commercial parking lot, seizure procedures include giving the attendant a Form 668-A, Notice of Levy, to demand that the car be turned over.
There is no required sequence for levying. Generally, though, levy funds that are held by a third party first. This is usually less time consuming.
Appeals for Levies
Generally, taxpayers are entitled to a Collection Due Process (CDP) hearing under IRM 6330, or an equivalent hearing.
Notices of levy can also be appealed under the Collection Appeals Program (CAP) regardless of whether the taxpayer can appeal under IRC 6330. CAP was created to give taxpayers a chance for administrative review that is independent from the Collection function.
Pre-Levy Actions
Required Notices
Before property can be levied, the taxpayer must be given a
1. Notice and demand
2. Notice of intent to levy, and
3. Notice of a right to a Collection Due Process (CDP) hearing
Official Notice and Demand
The notice and demand required by IRC 6331(a) must be left at the taxpayer’s home or business, or mailed to the taxpayer’s last known address.
This is normally taken care of by a master file notice mailed shortly after there is an assessment. The taxpayer has 10 days to pay the amount that is owed. If the taxpayer neglects or refuses to pay the amount due, the Federal tax lien arises.
In addition, the taxpayer must be given a notice of intent to levy at least 30 days prior to the date of the levy. The taxpayer has 30 days to pay the amount that is owed before property can be levied. See IRC 6331(d) .
This notice must be:
a. Given in person
b. Left at the taxpayer’s home or business, or
c. Sent to the taxpayer’s last known address by certified or registered mail
Use of Register Mail
Use registered mail only if the taxpayer is outside the United States. There is no international certified mail.
Exception to the Rule:
If collection is in jeopardy, property can be levied immediately if the taxpayer has been provided notice and demand for immediate payment.
There are exceptions to the pre-levy notice requirements of IRC 6330.
When the collection of tax is in jeopardy under section 6331(a).
A levy is served on a State to collect a Federal tax liability from a State tax refund, referred to as the State Income Tax Levy Program (SITLP). A taxpayer’s state tax refund can be levied, even though the taxpayer may not have already been sent a notice or a right to a hearing
A disqualified employment tax levy is served.
A Federal Contractor Levy is served. A Federal contractor levy is any levy if the person whose property is subject to the levy (or any predecessor thereof) is a Federal contractor.
Last Known Address
Generally, the last known address is the master file address that posted from the most recently filed and properly processed return. A list of returns that are used to update this address is in Rev. Proc. 2010–16. This revenue procedure also describes how taxpayers can give a new address to the Service.
A last known address may be obtained or changed by information received from the United States Postal Service National Change of Address database (NCOA database).
As provided in Treas. Reg.§ 301.6212-2(b)(2), an address obtained from the NCOA database becomes the taxpayer’s last known address unless the taxpayer provides clear and concise notification of a change of address or the Service properly processes a taxpayer’s federal income tax return with a different address.
If a third party provides a new address for the taxpayer, this is not the taxpayer’s last known address, unless the taxpayer verifies it and requests it be used as such by the Service.
Right to a Hearing
When a Notice of Intent to Levy and Notice of Your Right to a Hearing (L1058) is mailed to the taxpayer, it must be sent to the last known address. If other addresses have been received from third parties without a change to the official last known address, send a copy of the L1058 and the enclosures to the taxpayer at these other addresses on the same date that the L1058 is sent to the last known address.
IRS Intent to Levy – Stop IRS Levy – Tax Debt
