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IRS gives more time to challenge wrongful levy

On Behalf of | May 20, 2018 | Tax Law

The IRS has announced that the Tax Cuts And Jobs Act of 2017 provides more time for individuals and businesses to bring a civil action for wrongful levy or seizure. In an attempt to satisfy a tax debt, IRS levies permit the legal seizure and subsequent sale of any property, including vehicles, real estate and personal assets as well as bank accounts and wages.

The Tax Cuts and Jobs Act that was enacted December 22 has extended the time allowed for filing a claim for return of property and bringing a suit from nine months to two years. If the claim is made within that two-year window, the period to bring a suit is then extended by one year from the date of filing the claim. If the claim is disallowed, individuals or businesses have six months from the disallowance to file a suit.

The notice

If an individual or business receives a bill from the IRS titled Final Notice of Intent to Levy and Notice of Your Right to A Hearing, it would be wise to contact an attorney to discuss the dispute and the potential for a suit. If the claim for a wrongful levy is considered valid, the property will be returned to the former owner. This includes:

  • The seized property
  • The same amount of money as was initially levied
  • The same amount of money received through the IRS’s sale of the property

A right to an appeal

Anyone whose claim is initially denied can appeal to the IRS’s Collection Appeals Program. This right to an appeal applies to all tax payers when dealing with the IRS. Nevertheless, the potential for success of the suit and appeal can be increased with the guidance of a knowledgeable attorney.