IRS Tax Tip 2018-123 lays out the details on the change in the law.
The former deadline to file against the US for a wrongful levy used to be nine months, but now it has been extended to two years. There are a few things to keep in mind though regarding this change.
The statute of limitations does not apply when the final notice of intent to levy is filed or any other notice to levy is filed. It only applies after the levy takes place and the IRS seizes your property. “Property” in this case means wages, money in the bank or other financial accounts, vehicles and real estate.
“If an administrative claim is made within the extended two-year period, the two-year period for bringing suit is extended for one of two periods, whichever is shorter:
o Twelve months from the date the person filed the
claim.
o Six months from the date the IRS disallowed the
claim”.
In order to take advantage of the increased statute of limitations, you must first be able to take advantage of the original statute period of nine months. In other words, if you didn’t file your administrative claim or civil suit within the nine months previously allowed, you don’t get the advantage of the extension of two years. The change in law applies to levies made before, on or after December 22, 2017.
Of course, the best way to avoid a levy in the first place is to call me when you get your first bill!