Laws That Limit The IRS’ Power To Levy

Taxpayers with debts for back taxes have rights which are contained within the Internal Revenue Code. These laws limit the power of the IRS to collect and levy. These laws grant taxpayers rights that protect them from the collection enforcement powers of the IRS. Taxpayers should ensure that they invoke the protections of these laws to the fullest by retaining an experienced and knowledgeable tax professional.

Here are the most important collection laws that limit the IRS’ power to levy:

*Internal Revenue Code § 6330 and § 6331(d)

When levying property, at least thirty (30) days beforehand, the IRS must give notice of such levy and the right to appeal through a letter known as a Final Notice of Intent to Levy. After this is received, taxpayers have thirty (30) days to file an appeal to dispute the IRS levy and prevent it from occurring, request and have a hearing with an IRS appeals officer to reach an alternative solution, and, if this fails, petition the United States Tax Court for review.  While this procedure, known as a collection due process appeal, unfolds, all IRS enforcement activity is suspended.

* Internal Revenue Code § 6331(f) and § 6331(j)(2)(c)

The IRS cannot levy or seize property unless it results in a recovery of money based upon the seized property containing some equity. This is known as the “no equity” rule, which, when applicable, eliminates any need for the greater majority of IRS seizures.

* Internal Revenue Code § 6502

The IRS has 10 years to collect an unpaid tax debt. I.R.C. § 6502 allows the IRS ten (10) years to collect a tax debt. After this ten (10) year period expires, the IRS is legally bound to place a credit on a taxpayer’s account for the amount that is uncollectible, and set the account balance at zero. The ten-year period commences from the time the IRS first puts a balance due on its books and ends on what is known as the IRS collection statute expiration date.

* Internal Revenue Code § 6334(a)

Taxpayers do not have to fear what may be the absolute worst- having the IRS seize personal belongings, household goods, furniture, and clothing. I.R.C. § 6334 prohibits the IRS from taking a taxpayer’s everyday essentials.

THE TAX EXPERTS at the Thorgood Law Firm can help protect any taxpayer from the levying authority of the IRS. If you have a tax debt and the IRS is threatening to levy your property, call THE TAX EXPERTS at the Thorgood Law Firm for a FREE consultation at 212-490-0704.

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