Final Notice of Intent to Levy
“Final Notice of Intent to Levy” the
letter says in bold font. It arrived today via certified mail in
an official looking envelope indicating it is from the Internal Revenue
Service. Not
good news. You have successfully ignored all the other letters
you have received nicely asking for payment, but this one is different. The
tax man is now doing more than asking, he is now going to take, and take
a lot.
What can you do now? How about read
the United States Constitution – you
know, the document drafted so many years ago by men so far away in a
small convention hall in Philadelphia in the late 1700’s. Amendment
number five of the Bill of Rights to be exact. “No
person shall…be deprived of life, liberty or property without
due process of law…” This actually means something.
These are more than just words mumbled in your high school social studies
course! They mean that the IRS cannot take your stuff unless and
until it provides you with due process of law. What the heck does that
mean? That is simple – notice and a hearing. You
have received the notice today via certified mail. Yes, the mail
you received today is the first leg of the IRS complying with your Constitutional
rights to due process of law before they take your stuff.
The second leg, a hearing, is vitally important
and must be understood. If
you look inside the envelope containing your notice of levy you will
find IRS Form 12153, Request for a Collection Due Process (CDP) Hearing
or Equivalent Hearing. The IRS is required by law to send you this
form and an explanation of what it means. If this form is not
there go to the IRS website at www.irs.gov and
look under Forms and Publications. Download the form and instructions.
This form is your best defense against the IRS taking your stuff today. By
filling it out, you are exercising your Constitutional right to be heard
by a neutral hearing officer before your bank account is emptied.
Have you found the form? Yes? Good. Fill
it out and mail it in. The front of the form is quite easy containing
basically personal information that you should be easily able to provide. The
back is a little more complicated with blocks marked Installment Agreement,
Offer in Compromise, Innocent Spouse.
In block 5 under Basis for Hearing Request
mark Proposed Levy or Actual Levy. Block 6 should be checked as
well. This requires some
explanation. There are two types of hearings that are available
to you depending upon when you are filling out the form – (1) the
CDP Hearing and (2) the Equivalent Hearing. The CDP hearing
is by far the better of the two. You have thirty days from
the date of the Notice of Intent to Levy to request a CDP hearing. If
you submit your request on time, i.e. within that thirty day window,
the IRS is prohibited from taking your stuff. The levy will stop
and you will be provided the opportunity to discuss your case with a
neutral hearing officer form the Office of Appeals.
However, if you do
not submit your request within the thirty days provided by law, you will
not be able to request a CDP hearing and the levy will proceed. Fortunately
you can still request a hearing (the Equivalent Hearing) but it will
not stop levy action. Sorry.
Checking block six can’t hurt, it can only help. If you have
submitted the Form 12153 within 30 days, block six really does not apply. If
you submit later than thirty days it is vital.
Block seven is also vital
but it can be a little confusing. Let’s
start with the block titled “My Spouse is Responsible.” This
involves “Innocent Spouse Relief” a concept which is beyond
the scope of this article. If you feel that you are being unfairly
targeted by the IRS for a tax debt that legitimately belongs to your
spouse or ex spouse, do additional research on Innocent Spouse Relief
and check this block. If you are not married or if you are married and
responsible for the debt, then leave the block unchecked.
Moving on to the space marked “Lien.” Since you have
not received a notice of lien, but rather a notice of levy, this block
does not apply to you at this time.
The first block in section 7 has two
simple choices – Installment
Agreement and Offer in Compromise. Check both. This indicates
to the IRS that you cannot fully pay the tax debt now and you want to
be considered for either an Installment Agreement or an Offer in Compromise. If
you are like most taxpayers, you certainly cannot pay the full amount
now and at best can pay some of it over time. Alternatively, you
might want to offer the IRS some amount less than the full extent of
what you owe. That is called the offer in compromise. By
mailing this to the IRS within thirty days, you will stop the levy action
and give yourself the opportunity to discuss the debt with an IRS representative.
If you mail it later than the thirty day
window, then you will be requesting an Equivalent Hearing and not a CDP
hearing. While the actual meeting
and hearing are basically the same, the single important difference is
that the IRS will continue with their levy action. You can try
to stop the levy action by contacting the IRS and discussing a 120 day
hold on the levy while you go through the hearing process. The
IRS is not bound by law to put the levy on hold for 120 days, but if
you can present a good reason for failure to pay your taxes, they may
stop the levy to give you time to explore collection alternatives with
the hearing officer.
All of the above presumes that you do not
dispute the fact that you owe the money. However, if you feel that
the IRS has made an error and that you do not owe what they claim you
do, then there are other avenues, in addition to the above that you should
pursue. Those avenues are outside the scope of this article.
