What do I do if I receive a threat from the IRS to seize my property?

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If the IRS has threatened to initiate a levy on your property, call 252-321-2020 today to ask for assistance from attorney Kevin Sayed.  All material here originally published by the Internal Revenue Service.

Taxpayers now have more time to challenge a levy

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:o Twelve months from the date the person filed the
    claim.
    o 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.

More Information:

Please call Kevin M. Sayed, J.D., LL.M. Taxation, with Colombo Kitchen Attorneys for help with IRS tax issues.  

Enforced Collection Actions

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The IRS recently decided to begin a campaign to aggressively levy wages and income, bank accounts, and other payments and assets that serve as cash or cash equivalents. For the last few years the IRS would routinely intercept federal payments (which will continue) to businesses or individuals. The IRS will soon begin aggressive collection campaigns on cash or payments. See the website below for common types of levy and collection and enforcement actions available to the IRS.

https://www.irs.gov/businesses/small-businesses-self-employed/enforced-collection-actions

If taxes are not paid timely, and the IRS is not notified why the taxes cannot be paid, the law requires that enforcement action be taken, which could include the following:

  • Issuing a Notice of Levy on salary and other income, bank accounts or property (legally seize property to satisfy the tax debt)
  • Assessing a Trust Fund Recovery Penalty for certain unpaid employment taxes
  • Issuing a Summons to the taxpayer or third parties to secure information to prepare unfiled tax returns or determine the taxpayer’s ability to pay

Note: To collect delinquent tax debts, certain federal payments (vendor, OPM, SSA, federal salary, and federal employee travel) disbursed by the Department of the Treasury, Bureau of Fiscal Service (BFS) may be subject to a levy through the Federal Payment Levy Program (FPLP).

Important Information for Employers

Employment taxes are:

  • The amounts an employer should withhold from employees for income, social security, and Medicare taxes (also called withheld or trust fund taxes), plus
  • The amount of social security tax and Medicare taxes an employer pays on behalf of each employee

Paying employment taxes late, or not including payment with a return if required, could result in additional penalties and interest on any unpaid balance. Failure to Deposit (FTD) penalties of up to 15 percent of the amount not deposited may be charged, depending on how many days the payment is late.

Enrolling in and making current tax deposits through the Electronic Federal Tax Payment System (EFTPS) can help employers stay up-to-date with their payment requirements.

If you need help with employment or contracts, business or corporate matters, or business tax optimization, call Kevin M. Sayed, J.D., LL.M. Taxation at Colombo Kitchin attorneys, 252-321-2020.