Appealing an IRS Tax Levy: When and How to Request
If you receive a “Final Notice of Intent to Levy,” you generally have 30 days to respond. There should be an “LT 11” or “LT 1058” in the letter. If you agree with the notice, you can pay your taxes or try to set up a resolution with the IRS. Sometimes it is a good idea to appeal, as it puts the levy on hold while your appeal is pending. Moreover, the appeal gives you time to work out a resolution with the IRS.
If you don’t take one of these steps, the levy will take place. Once the IRS seizes your money or assets, it is very difficult to get them back.
How to Request an Appeal for a Tax Levy
If you do not agree with the notice, you can file an appeal. To do that, you need to fill out and submit IRS Form 12153 (Request for a Collection Due Process or Equivalent Hearing) or request the CAP procedure (Collection Appeals Program).
In some cases, you may be able to work out a solution with IRS Collections, but ideally, you should also request an appeals hearing. You can cancel your hearing if you get the problem cleared up before then. Remember, the IRS cannot garnish your wages or levy your bank account while the appeal is pending.
When to Consider Appealing a Tax Levy
You can appeal a levy for many reasons. Here are the most common reasons for an appeal. If you don't meet any of the criteria listed below you can consider these other methods to stop the tax levy.
You already paid your taxes in full
If the IRS made a mistake and didn’t record your payment, you should start the appeals process to protect your assets.
You’re already making payments on an installment agreement
If you’re making timely payments on an installment agreement, you are considered to be in good standing with the IRS. If
You received a levy notice, that’s a mistake, and again, you need to appeal.
You already submitted an offer in compromise
If you applied for an offer in compromise, the IRS can’t levy your assets until it reviews the offer.
The IRS made a procedural error
The IRS needs to follow strict procedures before issuing a tax levy. If the agency missed a step along the way, you can appeal. These are the three basic steps that need to happen:
- The IRS assessed a tax liability and sent you a notice to demand payment.
- You neglected or refused to pay the amount.
- The IRS sent you a final notice of the intent to levy and gave you 30 days to appeal.
You are filing bankruptcy
- Bankruptcy puts a halt on collection activity, including tax collections. If the IRS sent the notice of intent to levy during your bankruptcy, the levy should be voided. Have your bankruptcy attorney or a tax professional help you appeal.
The statute of limitations has expired
The IRS only has a limited time to collect taxes. That’s usually 10 years. If that time period has passed, the IRS doesn’t have a right to levy, and you need to appeal the levy.
Your spouse or ex-spouse was exclusively liable for the taxes owed
In rare cases, you can apply for innocent spouse relief. This is where you prove that you are not liable for the taxes, and the IRS does not hold you responsible.
You want to discuss alternative collection options
There are many other ways to settle your taxes. If you want a tax settlement or a payment plan, you can file an appeal to discuss those options.
How to File a Request for a Collection Due Process Hearing
In order to request a collection due process hearing, you must complete IRS Form 12153 (Request for a Collection Due Process or Equivalent Hearing). You may also create a written appeal with the information requested on that form. You must explain why you don’t agree with the levy. You can use the reasons listed above or any other applicable reasons.
Send the form to the address on your intent to levy notice. Once you file for an appeal, the IRS will typically stop collection activity until the appeal process is done.
After the hearing, the Office of Appeals will issue a determination about your case. If you do not agree with the determination, you have another 30 days to appeal again.
How to Get Help Appealing a Tax Levy
If you receive a “Final Notice of Intent to Levy”, you should talk with a tax professional about your options. A tax professional can analyze your situation and help you find the best plan of action. They can go through the appeals process with you and help you find the best resolution.