Appealing an IRS Bank Levy: How to Appeal Bank Account Garnishment
If you have received an IRS bank levy or IRS levy and you don't not agree with it you should use right to appeal the levy. Typically if you did not agree with the levy you would appeal it within 30 days of receiving the "Final Notice of Intent to Levy and Notice of Your Right to a Hearing". If you did not appeal within those 30 days you still may be able to execute your right to an appeal if you have a valid reason to appeal the bank levy. When you think you have a good case for a hearing it is important that you file for the appeal as soon as possible and also call the phone number on the notice you received and tell them your case and see if they can speed up the process to get the levy stopped immediately.
When to Appeal a Levy and Request a Hearing
An IRS levy can be appealed for many reasons. It is important that you act quickly in order to prevent any seizure of assets because it will be difficult if not impossible to get back anything the IRS has seized. Below are some of the most common reasons taxpayers appeal tax levies and win their appeal.
- Taxes were already paid - Sometimes the IRS makes a mistake and possibly didn't credit your account properly from a payment of taxes that happened prior to the levy being issued.
- You submitted for an offer in compromise - If you submitted an offer in compromise to the IRS they must review your offer and make a determination about your filing before they can purse further collection actions.
- You entered into an installment agreement - If you entered into an installment agreement prior to the notice of intent to levy and have been keeping up on payments then you should be considered in good standing with the IRS and the filing of a tax levy was made in error by the IRS
- The IRS made a procedural error - The IRS must have followed their procedure before issuing the tax levy. They must have assessed the tax liability, you must have neglected or refused to pay or arrange for payment of the amount assessed, and the IRS sent you a final notice of intent to levy at least 30 days prior to beginning the levy.
- Levy happened while you were in bankruptcy - According to bankruptcy law, all collection actions should be stopped during bankruptcy. If the tax amount was assessed and levy notice was sent while you were in bankruptcy then the levy could be appealed.
- Statute of limitations expired on the tax debt - The IRS typically has 10 years to collect on taxes owed since the date the debt was assessed. If this time has passed and the IRS did not collect the money owed within this time period then by law, they cannot collect the taxes owed.
- Innocent Spouse Relief - If you would like to make an innocent spouse relief claim they levy can be appealed. In order to do this you must meet the strict requirements set forth by the IRS regarding this form of tax relief.
- You want to discuss collection alternatives - The IRS would rather not levy your bank account. If you would like to setup some other alternative to pay back your taxes then you can appeal the levy and work with the IRS on another payment or settlement method.
If you are unsure if your reason to appeal would be valid you can either call the number on the notice of intent to levy or you can call us and we can analyze your tax and financial situation and find the best approach for you.
Filing an Appeal or a Request for a Collection Due Process Hearing
Once you receive a "Notice of Intent to Levy and Notice of Your Right to a Hearing" the notice states that you have 30 days to either pay your taxes or request a hearing. If you have received a bank levy it is likely that those 30 days have passed. The good news is that you can still file for the appeal, the only difference is that if you don't agree with the ruling of the appeal you cannot go to court for a further appeal.
To file for an appeal you must request a collection due process hearing. To request a collection due process hearing you must file IRS form 12153 with the IRS. When this form is complete you must send it to the address that is listed on your notice of intent to levy. In the filing you must list your reason for the appeal. The reason can be any of the reasons listed above or any other reason that you have have for not agreeing with the tax levy. Once the appeal is filed the IRS will typically halt collection actions until after your appeal is reviewed and a decision has been made. If they accept your reason then the levy will be stopped, if they do not accept it they will continue collection actions prior to their determination.
If you filed the notice before the 30 days have went by from receiving the notice of intent to levy and you disagree with the findings of the appeal then you can go to court to contest the prior agreement. If you filed for the appeal after the 30 days you will not be able to go to court.
Appeals can be a difficult process for someone who doesn't know the inner workings of the IRS. It is highly suggested that you hire a tax levy professional when dealing with a bank levy.