The Irs Collection Process Publication 594 (Page 7 of 8) in pdf

The IRS Collection Process Publication 594

Page 7

Reasons we “release” a levy

If your property has been seized (“levied”) to collect tax owed by

you may appeal under the Collection Appeals Program or

someone else,

The Internal Revenue Code (IRC) specifically provides that we must

(within the time prescribed by law), file a claim under Internal Revenue

release a levy if we determine that:

Code section 6343(b), or you may (within the time prescribed by law)

•

You paid the amount you owe,

file a suit under Internal Revenue Code section 7426 for the return of

•

The period for collection ended prior to the levy being issued,

the wrongfully seized property. For more information, see Publication

•

It will help you pay your taxes,

4528, Making an Administrative Wrongful Levy Claim under Internal

You enter into an Installment Agreement and the terms of the

•

Revenue Code section 6343(b).

agreement don’t allow for the levy to continue,

How to recover economic damages

•

The levy creates an economic hardship on you, meaning we’ve

If our seizure was in error, your payment was lost or misplaced, or there

determined that you’re unable to meet basic, reasonable living

was a direct debit Installment Agreement processing error and you

expenses, or

incurred bank charges, we may reimburse you for charges you paid. For

•

The value of the property is more than the amount owed and

more information, see Form 8546, Claim for Reimbursement of Bank

releasing the levy won’t hinder our ability to collect the amount owed.

Charges. If your claim is denied, you can sue the federal government for

In addition, a levy on wages or salary must be released as soon as

economic damages.

possible if we determine that your tax isn’t collectible.

If we intentionally or negligently didn’t follow Internal Revenue law

We’ll also release a levy if it was issued improperly. For example, we’ll

while collecting your taxes, or you’re not the taxpayer and we wrongfully

release a levy if it was issued:

seized your property, you may be entitled to recover economic damages.

•

Against property exempt from seizure,

Mail your written administrative claim to the attention of the Advisory

Prematurely,

•

Group Manager for your area at the address listed in Publication 4235,

•

Before we sent you the required notice,

Collection Advisory Group Addresses. If you’ve filed a claim and your

•

While you’re in bankruptcy and an automatic stay is in effect,

claim is denied, you can sue the federal government, but not the IRS

employee, for economic damages.

•

Where the expenses of seizing and selling the levied property would

be greater than the fair market value of the property,

Summons: Used to secure information

•

While an Installment Agreement request, Innocent Spouse Relief

request, or Offer in Compromise is being considered or had been

If we’re having trouble gathering information to determine or collect

accepted and is in effect, or

taxes you owe, we may serve a summons. A summons legally compels

•

While the Office of Appeals or Tax Court is considering certain appeals

you or a third party to meet with an officer of the IRS and provide

and the levy wasn’t a Disqualified Employment Tax Levy to collect

information, documents, and/or testimony.

employment taxes, a state refund, or jeopardy levy.

If you’re responsible for a tax liability and we serve a summons

Reasons we may return seized (“levied”) property

on you, you may be required to:

We may return your property if:

•

Testify,

•

Its seizure was premature,

•

Bring books and records to prepare a tax return, and/or

Its seizure was in violation of the law,

•

Produce documents to prepare a Collection Information Statement,

•

Returning the seized property will help our collection of your debt,

Form 433-A or Form 433-B.

•

You enter into an Installment Agreement that doesn’t allow a levy,

immediately call the

If you can’t make your summons appointment,

•

We didn’t follow IRS procedures, or

number listed on your notice. If you don’t call us and don’t attend your

•

It’s in your best interest (as determined by the Taxpayer Advocate) and

appointment, serious legal action may be taken against you.

in the best interest of the government.

you’ll

If we serve a third-party summons to determine tax liability,

If we decide to return your property but it’s already been sold, we’ll

receive a notice indicating that we’re contacting a third party. Third

give you the money we received from the sale. You can file a request for

parties can be financial institutions, record keepers, or people with

seized property to be returned, or we can return seized property on our

relevant information to your case. We won’t review their information

own initiative, generally up to 9 months after the seizure.

or receive testimony until the end of the 23rd day after the notice was

given. You also have the right to:

How to recover seized (“levied”) property that’s been sold

•

Petition to reject (“quash”) the summons before the end of the 20th

you (and anyone with interest in the

To recover your real estate,

day after the date of the notice, or

property) may recoup it within 180 days of the sale by paying the

Petition to intervene in a suit to enforce a summons to which the third

•

purchaser what they paid, plus interest at 20% annually.

party didn’t comply.

If we issue a third-party summons to collect taxes you already owe,

you won’t receive notice or be able to petition to reject or intervene in

a suit to enforce the summons.

The Irs Collection Process Publication 594 Page 7

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