Winning your properties and assets back after the Internal Revenue Service seized the items is going to be a tough game. If the agency levied your bank accounts and liquid assets, prepare yourself because it might become impossible to get any of the money back.
If the IRS collected your vehicle or business tools, these can be returned under the following conditions:
- The liability has been fully paid via an Offer in Compromise or bankruptcy
- The time for collection has expired, most often ten years since the assessment date
- If the agency finds that the levy release can prompt the tax debt collection process
- If the taxpayer has entered an installment payment deal
- If the agency is convinced that the seizure can trigger financial hardship for you or your dependents.
You can justify your situation using the above-mentioned premises, especially the financial hardship. For instance, if you have an old car, you may say that collecting the vehicle which has little to no value will affect your ability to secure a job, which is required to repay your tax liabilities.
If the levy will greatly contribute to your economic hardship, then you can prove it to the IRS and even highlight how dire your situation is. There are times when the IRS seizes assets just to teach the tax debtor a lesson. As a counter move, you can show how your asset is of little to no value due to mortgages on top of other liens.
You can ask for an immediate release using the grounds indicated and you start this by reaching out to the IRS officer designated to work on your levy notice.
Pay In Full
If you pay your liability to the IRS in full, you may be able to recover the levied property. For example, maybe you have a rich family member or friend who will be willing to lend you money. Alternatively, you may have assets that can be liquidated to repay your tax debt.
In light of the reality that most people with tax debt are in such a position due to their lack of available funds to pay the IRS, this “pay in full” option is the least viable for many taxpayers. However, other tax relief options exist.
Installment Agreement / Offer in Compromise
You may also suggest an installment agreement, which the IRS typically accepts if you propose reasonable payments. An Offer in Compromise might also convince the IRS to release the levy so you can go for it as well.
Lastly, you might want to file an appeal for the IRS levy and other collection steps. The first thing you must do is to contact the IRS unit manager who filed the levy. If they reject the appeal, submit an accomplished Form 9423, or the Collection Appeal Request to your collection office.