Zachary Montgomery - Tough Luck, Taxpayer!—IRS Continues to Levy on Social Security Benefits

Many taxpayers (if not all) would agree with the sentiment expressed on a wall plaque that recently caught my eye: “Dear IRS: I would like to cancel my subscription. Please remove my name from your mailing list.” That feeling is intensified for those taxpayers who owe the Internal Revenue Service money for back taxes. The IRS has various tools at its disposal to collect outstanding tax liabilities: notices, liens, personal visits, etc. However, levies are perhaps one of the most powerful tools (weapons?) the IRS wields against taxpayers. In a recent decision by the Eleventh Circuit Court of Appeals, the Court affirmed the lower court’s determination to dismiss the taxpayer’s lawsuit against the IRS. The IRS, the Court held, acted lawfully when it continued to collect the taxpayer’s Social Security benefits from a levy it issued prior to the ten-year collection statute expiration date.

Section 6331

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There are several ways to avoid an IRS levy without paying your full tax liability.  You’ll need to request a Collection Due Process (CDP) hearing before the appropriate deadline if you want to stop the bank levy, wage garnishment, or another type of IRS tax levy.  The most common ways to stop a levy are: dispute the tax liability, request an Installment Agreement, submit an Offer in Compromise, apply for Innocent Spouse Relief, make a case for Financial Hardship.  Read on to find out more about CDP hearings and the options available to you to stop a levy.

Request The CDP Hearing

Before levying your property, the IRS must first (most of the time) send you a notice and give you 30 days to request a hearing.  Only under rare circumstances can the IRS seize your property without sending one of these notices.

If you receive a CDP notice, keep the following information in mind:

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Venar Ayar, IRS Bank Levy Notice
How The IRS Begins The Seizure Process

In 1942, the U.S. government asked noted director Frank Capra to make a propaganda film that convinced a skeptical American public that waging war against both Japan and Germany was a good idea. Prelude to War: Why We Fight was one of several such movies that Capra made during World War II. The four-plus years he spent with the Army cost him dearly, as he had trouble finding work when he returned to Hollywood. Much like the government had to lay some groundwork before sending troops overseas, the IRS must lay some groundwork before it sends a levy notice.  Continue reading to find out how to stop an IRS levy before it begins.

Key Pre-Levy Considerations

A bank levy is the collection procedure of last resort. Unlike tax liens and some other procedures, levies are not automatic. The IRS only proceeds with them if:

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