IRS Tax Reform Tax Tip 2018-123, August 9, 2018
The IRS reminds individuals and businesses that they have additional time to file an administrative claim or bring a civil action for wrongful levy or seizure. Tax reform legislation enacted in December 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 bank or other financial accounts, vehicles and real estate.
- The timeframes apply when the IRS has already sold the property it levied. Taxpayers 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 hadn’t 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. By doing so, a taxpayer may be able to make arrangements to pay the liability, instead of having the IRS proceed with the levy.
- What if I get a levy against one of my employees, vendors, customers or other third parties?
- What is a Levy?
- Publication 4235, Collection Advisory Group Numbers and Addresses (PDF)
- Publication 4528, Making an Administrative Wrongful Levy Claim Under Internal Revenue Code Section 6343(b) (PDF)
- Publication 1660, Collection Appeal Rights (PDF)
- Publication 1, Your Rights as a Taxpayer (PDF)