Return of Levy Proceeds or Seized Property

The IRS issued a levy and the levied proceeds have been applied to your balance.  The IRS may consider returning all or a portion of the levied proceeds if any of the following conditions apply:

• The levy was premature or not in accordance with administrative or procedures,
• You now have an installment agreement for the tax liability included on the levy, unless the agreement provides otherwise,
• Returning the payment will facilitate the collection of the tax liability, or
• With your or the National Taxpayer Advocate’s (NTA) consent, returning the payment is in your (as determined by the NTA) and the government’s best interest.

You have a balance on your tax account. A notice was sent to you previously letting you know how much you owe, when it was due, and how to pay. Since the IRS did not hear from you it continued with its collection process and issued a levy that attached to your funds. The funds were sent to IRS and applied to your tax liability.

If the funds or property are not yet in IRS possession, see Levy Release.

If the funds or property are in IRS possession, your only recourse is to request that IRS consider returning the funds by filing an administrative return of property claim.  There is a time limit for making a claim.

1. If the United States has not yet sold the specific seized property, a claim can be made at any time.
2. If the property has been sold, the claim must be made within 2 years from the date of the Form 2433, Notice of Seizure, was given to the owner of the property.
3. If funds have been turned over to the IRS or will be turned over to the IRS, the claim must be made within 2 years from the date the notice of levy.        

(Note: For levies and seizure made prior to March 22, 2017, the timeframe to file a claim is 9 months instead of 2 years.)

1. The name, current address, and taxpayer identification number of the person requesting the return of the money or property purchased by the United States;
2. A description of the property levied upon;
3. The date of the levy;
4. A statement of the grounds on which the return of the money (or property purchased by the United States) is being requested.

If the tax being levied is the result of an audit where you didn’t know you were audited (never got a notice), you didn’t meaningfully participate, or you disagree with the findings, you may be able to ask for audit reconsideration.

If the tax being levied stems from the filing of a joint return and you believe your current or former spouse should be solely responsible for an incorrect item or an underpayment of tax on the return, you may be eligible for relief as an Innocent Spouse.