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​​​​​​​​Welcome to the LSNJLAWSM website, provided by Legal Services of New Jersey (LSNJ). LSNJ is a 501(c)(3) nonprofit offering free legal advice to low-income people in New Jersey. Find legal information by clicking on a legal topic or typing a few words into the search box. ​

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Taxes
Your Rights if You Receive an IRS Levy Notice

If you do not pay the taxes the IRS says that you owe, the IRS may take and sell any type of real or personal property you own or have an interest in. This is called a levy, and it is legal. The IRS can take money from your salary, Social Security benefits, bank account, or other assets (money or property) to pay taxes you owe.

When does the IRS send a levy notice?

If you fail to respond to an IRS notice and a demand for payment of taxes, the IRS will send you a second notice (Final Notice of Intent to Levy and Notice of Your Right to a Hearing). The second notice will arrive 30 days before the date that the levy is scheduled to begin. If you do not respond to the notice by paying the taxes or appealing, the IRS will begin to levy the property you own.

How do I stop the IRS from putting a levy on my bank account, wages, or Social Security benefits?

You have appeal rights, which allow you to protect your income before the IRS takes it. These rights are called Collection Due Process (CDP) rights. One of the CDP rights is a requirement that the IRS send you a notice 30 days or more before the levy is to begin. The notice explains your right to request a hearing within 30 days with an impartial Appeals Officer. For this request, you must file Form 12153. The form should be sent to you in the same envelope with the Notice of Intent to Levy. You may also download it from the IRS website.

What should I include on the form?

On Form 12153, you should raise every possible serious good reason why the levy should be withdrawn and the IRS not be allowed to levy on your assets. Examples of serious good reasons include:

  • You already paid the tax the IRS says that you owe.
  • Your former spouse is responsible for the tax.
  • You are unable to pay the tax because you recently lost your job or have very high medical bills.

You can also ask the IRS to reconsider whether you actually owe the tax. You may give the reasons you believe you do not owe the tax if you have not raised these reasons before.

What happens after I file the form requesting a hearing?

Once you file a Form 12153, the IRS stops all collection actions.

What happens at the hearing?

At the CDP hearing, you may suggest three other options to avoid a levy.

  1. You may ask for an installment agreement (if you are able to make a payment to the IRS every month for a total of 36 months or three years, until you pay the tax you owe).
  2. You may ask to be placed in currently not collectible status (if you have no money at all to pay your tax debt, but probably will have money to pay in the future).
  3. You may ask for an offer in compromise (if you believe that you will never be able to pay your tax debt).

Although you may have suggested these options earlier, the Office of Appeals may be in a better position to consider allowing you to use one of these options.

The Office of Appeals will send its decision to you and the collection division of the IRS as soon as possible. If the decision is unfavorable to you, you have 30 days to file a petition in Tax Court to review that decision.

Do not ignore notices from the IRS!

If you receive any notice from the IRS, especially a Notice of Proposed Levy or Final Notice of Proposed Levy, you should contact the IRS immediately. You should also file Form 12153.

Tax Legal Assistance Project

If you need help with an IRS notice, you may be eligible for help from Legal Services of New Jersey’s Tax Legal Assistance Project (TLAP). Contact TLAP by calling LSNJLAWSM, Legal Services of New Jersey’s statewide, toll-free legal hotline, at 1-888-LSNJ-LAW (1-888- 576-5529). If you are not eligible for assistance from Legal Services, the hotline will refer you to other possible resources.​

8/7/2017