The IRS has vast powers and one of the powers they exercise to settle the tax issues is the seizure of property. We know that not every person who is dealing with tax issues is a bad person who is trying to hide their properties or who has bad intentions and wants to fudge on their taxes. Most of the people face tax issues due to little knowledge and the situation become more aggravated when the right strategy is not exercised at the right time. Similarly there are ways to deal with the IRS properly seizure and you can stop them if you follow the right strategy.
Process of property seizure
If a person or any organization neglects, refuses or fails to file the tax return within a specified time limit, then the IRS can seize the property of the person or organization. But this is not like if one has failed to file the tax return then within overnight they would seize the property. There is a proper procedure and time limit within which the process is carried out. The process consists of three stages. In the first stage they send the taxpayer a “Notice of Demand for Payment,” in which the taxpayer is assessed and demanded for the payment. In the second stage the taxpayer has to follow the orders of the IRS, but if he/she refuses to do so, then it would lead to the third stage. In the third stage the IRS would issue “Final Notice of Intent to Levy and Notice of Your Right to Hearing” which is delivered to the taxpayer personally or sent to the last known address of the taxpayer.
Understanding the IRS notices and letters
Always keep in mind that disregarding the notice or the letter from the IRS can be problematic for you and sometimes ignoring a single letter can lead you to huge losses. The IRS sends millions of letters or notices to the masses which would vary in their nature and one has to reply accordingly. For instance, it could be notice stating: late filing, overdue payments, refunds, identity verification, or they have questions regarding the tax returns. Depending on the kind of the notice you would have varied options to respond and you should promptly respond which will keep you away from many problems.
If you are facing problem understanding the notice or letter, then you should contact the Taxpayer Advocate Service (TAS) immediately at 1-877-777-4778 to make sure that the issue is resolved instantly. TAS’ advocates are independent of the IRS and they directly report to the National Taxpayer Advocate (NTA) and in each state there would be at least one Local Taxpayer Advocate. You should always keep records of your notices which would be useful at later dates. Also keep in mind that if you find the letter suspicious then you should contact the IRS immediately and don’t respond to the letter prior to the confirmation.
Collection Due Process Hearing
Once you receive a “Notice of Federal Tax Lien” or “Notice of Intent to Levy” you can request the IRS to review your case or you can request IRS appeal section for collection due process hearing. You would have 30 days to do so and failure in producing the evidences and convincing the IRS would ultimately end up in property seizure.
When should you consider for an IRS levy appeal?
When you think that there is something fishy about the levy than you can consider for an appeal. There could be many reasons considering for an appeal,but following reasons are prominent in most of the cases.
- Sometimes it happens that the IRS mistakenly sends notices. For instance, you had filed the tax and the notice was sent just a day later or moments later of your file.
- You have already made an “Installment Agreement” with the IRS, but the notice was being issued after the agreement.
- Procedures were not followed by the IRS properly. Procedures or protocol means the three stages of procedures as discussed above.
- The IRS has sent the notice when you were in bankruptcy.
- You were not given an opportunity to dispute the tax liability
- If the tax was owed by your spouse or former spouse then you should appeal, that you are not liable for the debt. In that case you could qualify for the “innocent spouse relief” or the IRS can transfer the liability to your spouse or former spouse.