Making a Wrongful Levy Claim
If the IRS wrongfully levies property in Nevada, individuals and businesses can file administrative claims with the agency or bring civil actions to reverse the levy and recover assets. The IRS may levy property as a last resort if it has been unable to collect taxes that are owed. In some cases, the IRS will levy property that is owned by a third party or in which someone other than the taxpayer has a superior interest. The taxpayer whose property has been levied by the IRS may also file a claim or civil action if the property was exempt.
What Is a Levy?
A levy is different from a lien. A tax lien is a claim against property that is issued to compel payment when taxes are owed. A levy is when the IRS actually seizes the property and sells it to pay for the taxes that are owed. Levies may be issued by the IRS if the taxpayer has refused to pay the tax debt after receiving a demand for payment and a notice of the IRS’s intent to levy the property. In some cases, the IRS may wrongfully levy property, but there is a remedy available.
Handling a Wrongful Levy
The IRS has an administrative process that people who have had property seized may go through to challenge wrongful levies. People whose property has been wrongfully levied may file an administrative claim with the IRS within two years of the date that the levy was issued. They may also choose to file a civil action. However, if people file a civil action without exhausting the administrative remedies, they will not be able to recover damages.
Third parties who own property that was levied by the IRS to satisfy a tax debt may file administrative claims or civil actions against the government. Taxpayers whose exempt property was levied may also file administrative claims or civil actions. If the property that was seized has not been sold by the government, the people may be able to recover it. If the property has already been sold when the claim or action is filed, the people may be able to recover the money that the government received from the sale. If a claim is denied, people may appeal the decision.