How Do I Stop an IRS Levy On My Bank or Employer?
In order for the IRS to comply with the law, they must first give you what is called a Final Notice of Intent to Levy pursuant to 26 USC § 6330 which provides in pertinent part (my emphasis added):
(a) Requirement of notice before levy
(1) In general
No levy may be made on any property or right to property of any person unless the Secretary has notified such person in writing of their right to a hearing under this section before such levy is made. Such notice shall be required only once for the taxable period to which the unpaid tax specified in paragraph (3)(A) relates.
26 USC § 6330 provides this respecting the timing and manner of service of the notice (my emphasis added):
(a)(2) Time and method for notice
The notice required under paragraph (1) shall be—
(A) given in person;
(B) left at the dwelling or usual place of business of such person; or
(C) sent by certified or registered mail, return receipt requested, to such person’s last known address;
not less than 30 days before the day of the first levy with respect to the amount of the unpaid tax for the taxable period.
When you receive the notice, it is VERY important that your request for the hearing be made timely. 26 USC § 6330(a)(3) specifies that the information included with the notice the IRS sends you shall include (my emphasis added):
“The notice required under paragraph (1) shall include in simple and nontechnical terms—
(B) the right of the person to request a hearing during the 30-day period under paragraph (2);”
When get the aforementioned notice and read it you will see that 26 U.S.C. § 6330(e) provides that as soon as a Collection Due Process Hearing (CDPH) is timely requested “the levy actions which are the subject of the requested hearing…shall be suspended for the period during which such hearing, and appeals therein, are pending…” Requesting a Collection Due Process Hearing (CDPH) is the most effective way to stop an IRS levy on a bank account or paycheck since suspension of collection activity upon such request is mandated by the law.
The IRS has a tendency to try and base your entire hearing upon what you put in that request.
I have seen the IRS fax a release of levy to an employer in as little as two days subsequent to the CDPH hearing request being sent. This makes it possible for the employee to never miss a full paycheck and for the bank depositor to retrieve their funds.
Almost anyone can stop an IRS levy by timely requesting a CDPH hearing as provided in 26 U.S.C. § 6330(b)(1). However, if appropriate steps are not taken to win the hearing, eventually the IRS will get around to holding the hearing and in all likelihood decide against you and move forward on the levy. The IRS Terminator package is designed to give you the absolute best chance to win your hearing.
More than once I have heard of situations where the IRS sent a levy to an employer or bank before they sent the Final Notice of Intent to Levy. It is still possible to request a CDPH hearing in a situation such as this and get the collection activity suspended before the IRS takes your paycheck or funds.
There are probably not many feelings worse than the one that happens when your bank or employer notify you that they have been served a Notice of Levy by the IRS instructing them to keep most all of your next paycheck or deliver the funds in your bank account to them.