IRS collections

Is Certain Property Exempt From IRS Seizure?

June 15, 2017 | by Dennis N. Brager

The IRS has broad authority when attempting to collect delinquent tax, but there are limitations to what collections actions they can take. The IRS generally has to follow certain procedures before they can levy, or seize, your property, and certain property is exempt from IRS seizure.

Generally, the IRS must send a taxpayer a Notice of Intent to Levy, which gives the taxpayer 30 days to request a Collection Due Process hearing. This gives you a chance to avoid the levy by negotiating an IRS installment agreement, an offer in compromise, or disputing the underlying tax liability, if you have not previously had an opportunity to do so.

The IRS also has a general policy to only seize a taxpayer’s assets as a last resort. If you are attempting to negotiate and cooperate, you should be able to work out an arrangement and prevent your assets from being levied.

What Is an IRS Jeopardy Levy?

June 13, 2017 | by Dennis N. Brager

The IRS must generally issue a notice to a taxpayer before proceeding with a levy on their assets. The taxpayer is given 30-days to request a Collection Due Process hearing (CDP hearing), where the taxpayer can attempt to avoid the levy action by negotiating an installment agreement, disputing the tax liability that resulted in the levy, or presenting other defenses. The IRS will usually not take any levy actions during the 30-day period, or while the CDP hearing process is ongoing.

There are exceptions to the 30-day notice requirement. One situation where the IRS is not required to provide a notice is when they believe that collection of the tax is in jeopardy, known as a jeopardy levy. In this case, the IRS can bypass the notice requirement and immediately levy the taxpayer’s assets, such as a bank account, the taxpayer’s wages, cars, or other property.

In these situations, the taxpayer has no choice but to request an appeal of the levy after it has taken place. The taxpayer may request a CDP hearing, or hearing under the Collection Appeals Program, to argue that the jeopardy levy was unreasonable.

When to Use the IRS Collection Appeals Program

June 12, 2017 | by Dennis N. Brager

The Collection Appeals Program (CAP) is an IRS procedure available to appeal a broad range of collection actions. However, it does have some pitfalls when compared to a Collection Due Process (CDP) hearing, so consider consulting with a tax attorney if you are not sure which procedure to use.

The CAP procedure can be used to dispute the following collection actions:

• Before or after the IRS files a Notice of Federal Tax Lien

What Happens at a Collection Due Process Hearing?

June 5, 2017 | by Dennis N. Brager

A Collection Due Process (CDP) hearing may be your last chance to prevent an IRS collection action, such as bank account levy. It is also an opportunity request that the IRS withdraw or release its tax lien. At a CDP hearing, you may request an installment agreement, offer in compromise, innocent spouse defense, or you may dispute the amount of tax you owe. However, you can only receive a CDP hearing if you request it in writing within 30-days of receiving the IRS Notice of Intent to Levy.

A CDP hearing will be available if you receive any of the following notices:

Notice of Federal Tax Lien Filing

Can the IRS Collect From a Non-Liable Spouse?

May 26, 2017 | by Dennis N. Brager

The IRS may be able to collect delinquent tax debt from a non-liable spouse in some cases. This means that tax debt that was accrued by one spouse on a return filed separately, may still result in collection action being taken on the other spouse. However, the IRS cannot pursue collection from a non-liable spouse in every case.

First, it is important to distinguish between joint tax debt and separate tax debt. Joint tax debt is any tax debt related to a return filed jointly. Separate tax debt could be related to a return filed before the taxpayer was married or a return filed after the marriage using the married filing separately status.

For joint tax debt, the IRS can collect from either or both spouses. They can levy your bank account, or your spouse’s bank account, or both. The Internal Revenue Manual states that wage levies should generally be applied to the spouse with higher earnings. However, in flagrant cases of neglect or refusal to pay, the IRS can levy the wages of both spouses.