When Should You Appeal a Tax Situation?

Written by Top Tax Defenders | Nov 1, 2017 12:00:00 PM

The IRS has the right to pursue any debt that is owed to the federal government. Even so, you have rights as a taxpayer that the IRS cannot violate or take away from you.
One of the most important rights you have as an American citizen is the right to dispute an IRS levy against your income or assets. You can pursue a levy appeal confidently by learning more about the required process.

IRS Levies

The IRS can legally file a levy against any income or asset that you own. The levy can be applied to your:

wages or salary
bank account
real estate
1099 earnings
retirement account
dividends
professional licenses
life insurance policy
rental income
accounts receivable
commission

Depending on what asset or source of income the levy is applied to, you risk losing funds that you could otherwise use to support your family with, put towards retirement, or depend on for your financial comfort. However, if you believe that the IRS is in the wrong and has no just cause for this claim, you have the right to appeal it.

Reasons to File an IRS Appeal

You may have a valid reason to appeal the IRS levy if your particular tax situation meets certain criteria. Some of the more common reasons for filing a levy appeal include:

your federal taxes are already paid off in full
you are currently set up on an IRS installment agreement or payment plan
the IRS has accepted your Offer in Compromise (OIC)
you recently filed an OIC and are awaiting a decision from the IRS
you recently filed an OIC and are awaiting a decision from the IRS
the IRS did not follow proper protocol during the levy process
you recently filed for bankruptcy
the statute of limitations for collecting the IRS debt has passed

If any of these scenarios apply to your situation, you can file an appeal immediately to dispute and possibly halt the levy. You must provide ample proof like receipts, bank statements, and other documentation to back up your claim.

How to File an IRS Levy Appeal

The actual appeals process for disputing an IRS levy is not overly complicated. However, it does require your due attention and full commitment.

To start the tax appeal process, you should first write a letter to your local IRS director. The letter should clearly outline the reasons for your appeal and any proof that you have to back up your claim. It is important that you send copies of receipts, statements, and other documents rather than the originals.

After you write and send the letter to your local IRS director, you can then request the records of the auditor who is in charge of your case. This request, which can be made following the guidelines of the Freedom of Information Act, lets you have access to the very information that the auditor will be using to handle your tax situation.

Finally, if you are not confident in your ability to follow through with the appeals process or you need help understanding the tax laws that apply to your case, you should hire a tax professional to assist you. The tax pro can write the letter, file the appeal, and follow through with the process to help you prove your claim and stop the levy against you.

A tax levy can leave you short of money and put assets like your life insurance and bank accounts at risk. You may be able to put a stop to it by appealing the levy against you. You can file the levy by following the required process and hiring a tax professional who is experienced and well-versed in the current tax codes.

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