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Levy: Seizure of Property (Part VI)

Topic: Levy: Seizure of Property (Part VI)

Information on Seized Property:

A. How to recover seized (“levied”) property that has been sold…

To recover your real estate, you (and anyone with interest in the property) may recoup it within 180 days of the sale by paying the purchaser what they paid, plus interest at 20% annually, compounded daily.

B. If your property has been seized (“levied”) to collect tax owed by someone else…

You may appeal the seizure under the Collection Appeals Program or file a claim under Internal Revenue Code section 6343(b), generally within 2 years of the seizure, or you may file a suit under Internal Revenue Code section 7426 for the return of the wrongfully seized property, generally within 2 years of the seizure.

You may also appeal the denial of the request to return the wrongfully seized property under the Collection Appeals Program. For more information, see Publication 4528, Making an Administrative Wrongful Levy Claim under Internal Revenue Code section 6343(b).

(IRS Publication 594 and IRS.gov) (TTT 08/04/2020)

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Levy: Seizure of Property (Part V)

Topic: Levy: Seizure of Property (Part V)

Reasons the IRS may return seized (“levied”) property

The IRS may return your seized property if:

• The seizure was premature,

• The seizure was in violation of the law,

• Returning the seized property will help their collection of your debt,

• You enter into an Installment Agreement to satisfy the liability for which the levy was made, unless the Agreement does not allow for the return of previously levied upon property.

• They did not follow IRS procedures, or

• It is in your best interest and in the best interest of the government.

The IRS may return property at any time if the property has not been sold. If they decided to return your property, but it’s already sold, they will give you the money they received from the sale. You can file a request for return of seized money or money from the sale of seized property, generally up to 9 months after the seizure.

(IRS Publication 594 and IRS.gov) (TTT 07/28/2020)

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Levy: Seizure of Property (Part IV)

Topic: Levy: Seizure of Property (Part IV)

The IRS will “release” a levy if it was issued improperly…

The IRS will also release a levy if it was issued improperly. For example, they will release a levy if it was issued:

• Against property exempt from seizure,

• Prematurely,

• Before the IRS sent you the required notice,

• While you were in bankruptcy and an automatic stay was in effect,

• When the expenses of seizing and selling the levied property would be greater than the fair market value of the property,

• While an Installment Agreement request, Innocent Spouse Relief request, or Offer in Compromise was being considered or had been accepted and was in effect, or

• While the Office of Appeals or Tax Court was considering a collection due process case and the levy wasn’t a Disqualified Employment Tax Levy to collect employment taxes, a state refund, a jeopardy levy, or to collect the tax debt of federal contractor.

• While the Office of Appeals or Tax Court is considering an appeal of the denial of innocent spouse relief.

(IRS Publication 594 and IRS.gov) (TTT 07/21/2020)

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Levy: Seizure of Property (Part III)

Topic: Levy: Seizure of Property (Part III)

Reasons the IRS will “release” a levy

The Internal Revenue Code specifically provides that the IRS must release a levy if they determine that:

• You paid the amount you owe,

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

• It will help you pay your taxes,

• You enter into an Installment Agreement and the terms of the agreement don’t allow for the levy to continue,

• The levy creates an economic hardship, meaning the IRS determined the levy prevents you from meeting basic, reasonable living expenses, or

• The value of the property is more than the amount owed and releasing the levy won’t hinder their ability to collect the amount owed.

Next week additional information on release of a levy….

(IRS Publication 594 and IRS.gov) (TTT 07/14/2020)

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Levy: Seizure of Property (Part II)

Topic: Levy: Seizure of Property (Part II)

How to appeal a proposed seizure (“levy”)?

Taxpayers can request a Collection Due Process hearing within 30 days from the date of their Notice of Intent to Levy and Notice of Your Right to a Hearing.

They should send their request to the address on their notice. For more information, see Form 12153, Request for a Collection Due Process or Equivalent Hearing.

At the conclusion of their hearing, the Office of Appeals will provide a determination.

The taxpayer will have 30 days after the determination to challenge it in the U.S. Tax Court.

If Collection Due Process rights aren’t available for the case, the taxpayer may have other appeal options, such as the Collection Appeals Program.

(IRS Publication 594 and IRS.gov) (TTT 07/07/2020)

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Levy: Seizure of Property (Part I)

Topic: Levy: Seizure of Property (Part I)

Property that can’t be seized (“levied”) by the IRS

Certain property is exempt from seizure. For example, the IRS can’t seize the following: unemployment benefits, certain annuity and pension benefits, certain service-connected disability payments, worker’s compensation, certain public assistance payments, minimum weekly exempt income, assistance under the Job Training Partnership Act, and income for court-ordered child support payments.

They also can’t seize necessary schoolbooks and clothing, undelivered mail, certain amounts worth of fuel, provisions, furniture, personal effects for a household, and certain amounts worth of books and tools for trade, business, or professions.

There are also limitations on their ability to seize a primary residence and certain business assets. Lastly, the IRS can’t seize your property unless they expect net proceeds to help pay off your tax debt.

(IRS Publication 594 and IRS.gov) (TTT 06/30/2020)

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People First Initiative: Installment Agreements (Part II)

Topic: People First Initiative: Installment Agreements (Part II)

For taxpayers under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are suspended. Taxpayers who are currently unable to comply with the terms of an Installment Payment Agreement, including a Direct Debit Installment Agreement, may suspend payments during this period if they prefer. Furthermore, the IRS will not default any Installment Agreements during this period. By law, interest will continue to accrue on any unpaid balances.

Q. If necessary, what is the best way to suspend direct debit payments for a Direct Debit Installment Agreement (DDIA)?

A. Taxpayers should contact their bank directly to stop payments if they prefer to suspend direct debit payments during the suspension period. Banks are required to comply with customer requests to stop recurring payments within a specified timeframe. The following resources provide guidance on how to work with the bank to stop payments: · U.S. Department of the Treasury, Office of the Comptroller of the Currency, Answers about Automatic Withdrawals: How can I stop a pre-authorized debit from being paid from my checking account? · Consumer Financial Protection Bureau, How do I stop Automatic payments from my bank account?

IRS may be able to suspend certain single DDIA payments upon request, but due to disruptions caused by COVID-19 issues it may be difficult to reach an assistor. Note that if payments are stopped, in order to avoid possible default of the agreement once the suspension period expires on July 15, 2020, taxpayers must inform their bank to allow the debits to resume at least two weeks before their next payment is due.

(This FAQ is not included in the Internal Revenue Bulletin, and therefore may not be relied upon as legal authority. This means that the information cannot be used to support a legal argument in a court case.)

(IRS FAQ – IRS.gov) (TTT 06/23/2020)

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People First Initiative: Installment Agreements (Part I)

Topic: People First Initiative: Installment Agreements (Part I)

For taxpayers under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are suspended. Taxpayers who are currently unable to comply with the terms of an Installment Payment Agreement, including a Direct Debit Installment Agreement, may suspend payments during this period if they prefer. Furthermore, the IRS will not default any Installment Agreements during this period. By law, interest will continue to accrue on any unpaid balances.

Q. Will direct debit payments continue to be deducted from my bank for Direct Debit Installment Agreements (DDIAs) during the suspension period?

A. Yes. IRS will continue to debit payments from the bank for Direct Debit Installment Agreements (DDIAs) during the suspension period. However, taxpayers who are unable to comply with terms of their Installment Agreement may suspend payments during this period. Installment agreements will not default due to missing payments during the suspension period through July 15, 2020.

(This FAQ is not included in the Internal Revenue Bulletin, and therefore may not be relied upon as legal authority. This means that the information cannot be used to support a legal argument in a court case.)

(IRS FAQ – IRS.gov) (TTT 06/16/2020)

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People First Initiative: Liens and Levies (Part II)

Topic: People First Initiative: Liens and Levies (Part II)

Q. What should a taxpayer do if they need a lien release, certificate of discharge, or have another lien issue?

A: The IRS is processing all electronically submitted lien certificate applications normally and assigning them within 10 days. To protect the health and safety of IRS employees and taxpayers, the IRS is NOT currently processing lien certificate applications mailed to the Advisory Consolidated Receipts (ACR) site in Florence, Kentucky. The IRS is working to reopen its offices and to restore mail service and will provide updates as the situation changes. The IRS requests that taxpayers use the E-Fax line for our ACR site (844-201-8382) for certificates such as: discharge of property from the federal tax lien; withdrawal of the notice of federal tax lien; and subordination of the federal tax lien. Publication 4235, Collection Advisory Group Numbers and Addresses (PDF), has additional information on the process for submitting applications for lien certificates, and on related topics. Please visit IRS.gov and search “Lien Certificates” for further information.

(This FAQ is not included in the Internal Revenue Bulletin, and therefore may not be relied upon as legal authority. This means that the information cannot be used to support a legal argument in a court case.)

(IRS FAQ – IRS.gov) (TTT 06/09/2020

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People First Initiative: Liens and Levies (Part I)

Topic: People First Initiative: Liens and Levies (Part I)

Q. Will levies and wage garnishments remain in place or will these be paused from 4/1 to 7/15? Can the taxpayer request a pause? If so, how?

A. Levies will not be automatically released. IRS will consider taxpayers’ requests to release levies on a case by case basis if the levy is causing an economic hardship. “Economic hardship” means the levy prevents the taxpayer from meeting basic, reasonable living expenses. The IRS may ask for additional financial information to determine if a levy is causing an economic hardship.

To request a release of levy, if the taxpayer is working with a revenue officer, they should contact the revenue officer. For cases not assigned to a revenue officer, taxpayers who require a levy release should call the number on the notice of levy. If you are unable to get through, fax your request to 855-796-4524. Please include your name, address and social security numbers (for both of you and your spouse if you filed jointly) with your request. In addition, include the name, address and fax number of your employer or bank where the levy is being processed. Note that this fax number will only be used to address emergency levy release requests. Due to our current limited staffing, we will not respond to other issues sent to this fax line.

(This FAQ is not included in the Internal Revenue Bulletin, and therefore may not be relied upon as legal authority. This means that the information cannot be used to support a legal argument in a court case.)

(IRS FAQ – IRS.gov) (TTT 06/02/2020)