How Can a Jeopardy Levy Place You In Jeopardy?

As we have discussed in some previous posts, IRS levies are usually attention-getting tools as opposed to collection tools. The Service almost always cancels bank and other levies if the taxpayer enters into a repayment or other plan. But if the IRS suspects that it will have no other opportunity to collect the tax due, it may use a no-notice levy and immediately seize the taxpayer’s assets. The taxpayer will have no idea that anything is amiss until the waiter quietly says that “there is a problem with your debit card.”

Your Rights in a Jeopardy Levy Case

Typically, the IRS must provide a 30-day notice before it levies the taxpayer’s available assets. Furthermore, it must thoroughly document the need for this levy. Usually, there must be sufficient evidence that the taxpayer has been completely uncooperative. But according to Internal Revenue Manual 5.113, in some cases, the Service may pursue a no-notice levy after only a cursory assessment, if it has a reasonable basis to believe that a levy is the only way it can collect the tax debt. The underlying statute does not set the reasonableness standard, so courts usually rely on a separate provision that authorizes a no-notice levy if there is evidence of:

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