The IRS recently reminded individuals and businesses that they now have additional time to file an administrative claim or bring a civil action for wrongful levy or seizure. Tax reform legislation enacted in December 2017 extended the time limit from nine months to two years.

Here are some facts about levies and the extension of time to file a claim or civil action:

• An IRS levy permits the legal seizure and sale of property to satisfy a tax debt. For purposes of a levy, the term “property” includes wages, money in a bank or other financial accounts, vehicles and real estate.
• The timeframes apply when the IRS already has sold the property it levied. Taxpayers now can make an administrative claim for return of their property within two years of the date of the levy.
• If an administrative claim is made within the extended two-year period, the two-year period for bringing suit is extended for one of two periods, whichever is shorter:
  • Twelve months from the date the person filed the claim.
  • Six months from the date the IRS disallowed the claim.
• The change in law applies to levies made before, on or after December 22, 2017, as long as the previous nine-month period had not yet expired.
• Anyone who receives an IRS bill titled, “Final Notice of Intent to Levy and Notice of Your Right to a Hearing,” should immediately contact the IRS or a tax professional to discuss potential options. By doing so, a taxpayer may be able to make arrangements to pay (or defer payment of) the liability, instead of having the IRS proceed with the levy. Taxpayers also have other options, such as making an Offer in Compromise to settle the tax debt (subject to eligibility), or seeking temporary “currently not collectible” status to defer payment of the tax during a period of financial hardship.

More Information:

Additional information about levies and the IRS collection process is available on the IRS’s website using the following links:

• What is a Levy?
• What if I get a levy against one of my employees, vendors, customers or other third parties
• IRS Publication 4235, Collection Advisory Group Numbers and Addresses
• IRS Publication 4528, Making an Administrative Wrongful Levy Claim Under Internal Revenue Code Section 6343(b)
• IRS Publication 1660, Collection Appeal Rights
• IRS Publication 1, Your Rights as a Taxpayer

For more information about these rules and other available remedies to IRS collections, contact your professional tax advisor or tax preparer, or call Hertsel Shadian, Attorney at Law, LLC at (503) 352-6985. Please also feel free to share this information with others that might benefit from this information.