The IRS levied my bank accounts
The IRS levied my bank accounts but didn’t notify me first. What do I do now?
Before the IRS can take your property, whether cash or your dining room table, it must comply with the Constitution. Under the Fifth Amendment the IRS cannot deprive you of your property without due process of law. This means that the IRS must provide you with thirty days notice that they are going to take your cash and/or other property, and must provide you with the opportunity of a hearing. The governing directive can be found in the treasury regulations at section 301.6331-2(a)(1). According to this regulation “the notice must be given in person, be left at the dwelling or usual place of business of the taxpayer or be sent by registered or certified mail to the taxpayer’s last known address.”
In most cases the IRS is careful to comply with these legal requirements and they do send a notice of intent to levy and notice of your right to a hearing before they empty your bank account. However, the IRS is a huge organization dealing with hundreds of millions of taxpayers, and sometimes the proper notice does not go out. Then there is the issue of mailing the notice to the wrong address. It happens.
Example – In 2002 you lived at 123 Elm Street in Toledo, Ohio. In 2003 the IRS determined that you owe them $10,000 for prior year taxes. In 2003 you moved to 789 Dover Boulevard in Dover Delaware. You filed your taxes timely in 2003, 2004 and 2005 reflecting your new mailing address. After sending half a dozen letters to 123 Elm Street in 2006 the IRS sends by registered mail a notice of intent to levy to the same address – 123 Elm. Since you now live in Dover, Delaware and not Toledo, Ohio you never receive the notice of intent to levy and therefore cannot respond to it. The levy is wrongful. The IRS knew your current address but for some reason sent it to the prior residence.
So they took your stuff but did not give you notice. In a nutshell, they cannot do that and you should ask for your money back. The procedures for asking for your money back are outlined in the U.S. Treasury regulations, section 301.6343-2.
According to that section, you simply need to write a letter (no special forms are necessary) to the “Special Procedures Staff” in the Internal Revenue District where you live. If you need the address call the IRS at 1-800-829-1040 or try to find it online. The letter must contain the following information:
1. Your name and address
2. A list of the property they took
3. The date of the levy
4. A statement outlining why you think the levy was improper.
As with most of your important rights, if you do not exercise them quickly you lose them. If the IRS has taken the cash out of your bank account you have nine months from the date of the levy to mail the letter referred to above. The same time limit does not apply to property, which the IRS can return at any time
Arthur Weiss, Esquire
Law Office of Arthur Weiss, P.C.
3130 E. Broadway, Ste. 160
Tucson, AZ 85716