Source: http://tax-freedom.com/Opinion2.html
Timestamp: 2019-04-18 16:21:29+00:00

Document:
At your request I have researched the Internal Revenue Code, Title 26 U.S.C., regarding Seizures and Levies. The questions you were concerned with were the procedures for levying a private person’s property. Some of which are: Where does the IRS get its authority without a court order ? Does the property have to be turned over without a court order ? Are the rights, as guaranteed by the United States Constitution, violated ?
About my experience, I am an Enrolled Agent. Enrolled Agents are defined in the IRS Regulations Circular 230, as a person who has demonstrated technical competence in interpreting and administrating the Internal Revenue Code and regulations thereunder. This person has withstood an extensive background check as to moral and ethical practices and has passed a strenuous test in all areas of taxation administered by the Internal Revenue Service. Enrolled Agents are licensed by the Treasury Department and must continue to show proficiency in the tax laws and regulations with documented continuing professional education hours in order to maintain their licenses.
The IRS frequently serves levy notices on third parties who may be holding your property. The IRS knows that all of the notices of levy that are sent to you or your employer are incorrect unless you are involved in a privileged activity as noted at the end of this letter. The primary reason is their has been no assessment, because the IRS can not legally assess a Private Citizen who has his/her income from only private sources.
There are two concepts for me to get across. It is important to discuss the difference between a "levy" and a "seizure". A "seizure" means the act of taking into custody or control something which before was not in custody or control. A "levy" is not a single act, but rather is the whole process by which the money needed to pay a tax is raised, either by exercising control over something already in custody and control of the government or by distraining and seizing property not already in custody of the government. The levy process includes the sale of levied property and the application of the proceeds to the unpaid tax.
I must now advise you that a, "Notice of Levy", is not a levy or seizure. The "Notice of Levy" has no legal effect in the private sector unless it is accompanied with a Judicial Court Order and a "Notice of Seizure". The following cites will demonstrate that a "Notice of Levy" carries no authority to "Levy", and that a "Levy" must be done through "seizure" of the property.
"A Notice of Seizure should be given for a Notice of Levy to be successful. That the levy was impermissible in the absence of the required Notice of Seizure." [Arford v. United States, 934 F 2d 229 (9th Cir. 1991)].
"A 'Levy' for-delinquent taxes requires that property be brought into legal custody through seizure, actual or constructive, and is absolute appropriation of property levied on, and a mere NOTICE OF INTENT TO LEVY DOES NOT CONSTITUTE A LEVY" (Emphasis added). [Freeman v. Meyer. 152 F. Supp. 383, Affd 253 F. 2d 1295 (3rd Circuit 1968)].
"A 'Levy' requires that property be brought into legal custody through seizure, actual or constructive, and is absolute appropriation in law of property levied on, and MERE NOTICE OF INTENT TO LEVY IS INSUFFICIENT" (Emphasis added). [United States v. O'Dell, 160 F. 2d 304, 307 (6th Circuit 1947)].
"The IRS is to comply strictly to the conditions imposed by statute in the seizure and levy process." [Goodwin v. United States, 935 f 2d 1061, (9th Cir. 1991)].
"A stickler for enforcing the statutory notice it is entitled to receive, the government should be no less punctilious with respect to the statutory notice it is required to give." [Kulway v. United States, 917 F 2d 729, 735 (2nd Cir. 1990)].
There are specific procedures that must be followed for a garnishment to be lawful unless one voluntarily consents. This is also known by IRS Agents as evidenced by the Internal Revenue Manuel, page 57(16), titled "Legal Reference Guide for Revenue Officers" (February 9, 1990) States: "A proper levy against any amounts held as due and owing by employers, banks, stockholders, etc. must issue from a warrant of distraint and not mere notice" it then cites United States v. O'Dell, supra.
I hope I have covered the definitions of seizures and levies for you. Now I will use Title 26 U.S.C. to tell you the procedures the IRS must use. I will start with "seizures". The authority for "seizures" comes from Internal revenue Code sections 7321 and 7608 as follows: As stated in Goodwin v. United States and Kulway v. United States, (supra) the IRS compliance with the Lien-seizure-levy process must be strict and literal.
§ 7321. Authority to seize property subject to forfeiture.
(C) to make seizures of property subject to forfeiture under the internal revenue laws.
As noted in these sections, Internal Revenue Enforcement Officers, when enforcing both Subtitle E taxes and other taxes as defined in 7608, are given authority to make seizures of "property subject to forfeiture". It becomes important to know at this point exactly what property comes within the meaning of "property subject to forfeiture" since if the property is outside the scope of the meaning of "property subject to forfeiture", the Internal Revenue Enforcement Officer is not authorized to seize it.
(a) Taxable articles--Any property on which, or for or in respect whereof, any tax is imposed by this title which shall be found in the possession or custody or within the control of any person, for the purpose of being sold or removed by him in fraud of the internal revenue laws, or with design to avoid payment of such tax, or which is removed, deposited, or concealed, with intent to defraud the United States of such tax or any part thereof, may be seized, and shall be forfeited to the United States.
(b) Raw materials--All property found in the possession of any person intending to manufacture the same into property of a kind subject to tax for the purpose of selling such taxable property in fraud of the internal revenue laws, or with design to evade the payment of such tax, may also be seized, and shall be forfeited to the United States.
(c) Equipment--All property whatsoever, in the place or building, or any yard or enclosure, where the property described in subsection (a) or (b) is found, or which is intended to be used in the making of property described in subsection (a), with intent to defraud the United States of tax or any part thereof, on the property described in subsection (a) may also be seized, and shall be forfeited to the United States.
(d) Packages--All property used as a container for, or which shall have contained, property described in subsection (a) or (b) may also be seized, and shall be forfeited to the United States.
(e) Conveyances--Any property (including aircraft, vehicles, vessels, or draft animals) used to transport or for the deposit or concealment of property described in subsection (a) or (b), or any property used to transport or for the deposit or concealment of property which is intended to be used in the making or packaging of property described in subsection (a), may also be seized, and shall be forfeited to the United States.
§ 7303. Other property subject to forfeiture.
(1) Counterfeit stamps--Every stamp involved in the offense described in section 7208 (relating to counterfeit, reused, canceled, etc., stamps), and the vellum, parchment, document, paper, package, or article upon which such stamp was placed or impressed in connection with such offense.
(2) False stamping of packages--Any container involved in the offense described in section 7271 (relating to disposal of stamped packages), and of the contents of such container.
(3) Fraudulent bonds, permits, and entries--All property to which any false or fraudulent instrument involved in the offense described in section 7207 relates.
§ 7304. Penalty for fraudulently claiming drawback.
These code sections give us the comprehensive list of property which Internal Revenue Enforcement Officers have authority to seize. If any property does not fall within the above descriptions it is not "property subject to forfeiture" and the Internal Revenue Enforcement Officers have no authority to seize it.
The levy process includes the power of seizure as authorized in section 7321 and 7608, which is evidenced by sections 7701(a)(21) and 6331(b), as follows.
(21) Levy--The term "levy" includes the power of distraint and seizure by any means.
--The term "levy" as used in this title includes the power of distraint and seizure by any means.
The word "distraint" basically means to retain possession of property, by force if necessary, once it is in the possession of the government. the phrase "by any means" applies to the seizures when and where authorized, and to distraining the property once in the government's possession. Internal Revenue Officers are thus given very broad authority to carry out their legitimate functions.
§ 6331. Levy and distraint.
(a) Authority of Secretary--If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property (except such property as is exempt under section 6334) belonging to such person or on which there is a lien provided in this chapter for the payment of such tax.
Levy may be made upon the accrued salary or wages of any officer, employee, or elected official, of the United States, the District of Columbia, or any agency or instrumentality of the United States or the District of Columbia, by serving a notice of levy on the employer (as defined in section 3401(d)) of such officer, employee, or elected official. If the Secretary makes a finding that the collection of such tax is in jeopardy, notice and demand for immediate payment of such tax may be made by the Secretary and, upon failure or refusal to pay such tax, collection thereof by levy shall be lawful without regard to the 10-day period provided in this section.
(b) Seizure and sale of property--The term "levy" as used in this title includes the power of distraint and seizure by any means. Except as otherwise provided in subsection (e), a levy shall extend only to property possessed and obligations existing at the time thereof. In any case in which the Secretary may levy upon property or rights to property, he may seize and sell such property or rights to property (whether real or personal, tangible or intangible).
(c) Successive seizures--Whenever any property or right to property upon which levy has been made by virtue of subsection (a) is not sufficient to satisfy the claim of the United States for which levy is made, the Secretary may, thereafter, and as often as may be necessary, proceed to levy in like manner upon any other property liable to levy of the person against whom such claim exists, until the amount due from him, together with all expenses, is fully paid.
(1) In general--Levy may be made under subsection (a) upon the salary or wages or other property of any person with respect to any unpaid tax only after the Secretary has notified such person in writing of his intention to make such levy.
(C) sent by certified or registered mail to such person's last known address, no less than 30 days before the day of the levy.
(3) Jeopardy--Paragraph (1) shall not apply to a levy if the Secretary has made a finding under the last sentence of subsection (a) that the collection of tax is in jeopardy.
(F) the procedures applicable to the redemption of property and the release of a lien on property under this title.
(e) Continuing levy on salary and wages--The effect of a levy on salary or wages payable to or received by a taxpayer shall be continuous from the date such levy is first made until such levy is released under section 6343.
(f) Uneconomical levy--No levy may be made on any property if the amount of the expenses which the Secretary estimates (at the time of levy) would be incurred by the Secretary with respect to the levy and sale of such property exceeds the fair market value of such property at the time of levy.
You can see that there are conditions that must be met before the Secretary is authorized to levy on property or rights to property. First, you must be a person "liable" to pay a tax. Second, you must have been sent a "notice and demand" for payment of the tax. Third, you must have neglected or refused to pay the tax. And fourth, ten days must have elapsed after the notice and demand. (The ten day period does not apply in the case of a jeopardy determination).
After a levy is authorized, the property upon which the levy extends is given in Section 6331(b), which says that the Secretary may levy "only to property possessed and obligations existing at the time thereof". If the property is not already possessed by the Secretary, the property may be brought into the Secretary's possession by seizure and distraint, but remember only property "subject to forfeiture" may be seized, Section 6331 embraces the power given under Sections 7321 and 7608, it does not expand upon it.
Section 6331(b) has given us a very important definition. It has given us the definition of "property subject to levy", a phrase which makes its appearance in certain key places in both the Internal Revenue Code and in the Treasury Regulations. "Property subject to levy" basically means property which is not exempt from levy under section 6334.
(A) Secretary of the Treasury--The term "Secretary of the Treasury" means the Secretary of the Treasury, personally, and shall not include any delegate of his.
(B) Secretary--The term "Secretary" means the Secretary of the Treasury or his delegate.
Thus, "Secretary" means "The Secretary of the Treasury or his delegate".
Basically, the only property the Secretary (or his delegate) would already have in his possession would be accrued salaries or wages of federal or District of Columbia employees which have not yet been paid out of the federal coffers. Such accrued salaries or wages would be the only Property upon which the Secretary could levy without having to effectuate a seizure, and this is confirmed within section 6331(a) itself.
Section 6331(a) states that a levy can be made on accrued salaries or wages by serving a "notice of levy" on the employer of an officer, employee, or elected official, of the United States, the District of Columbia, or any agency or instrumentality of the United States or the District of Columbia. This confirms what was said before since the accrued salaries or wages of such officers, employees, or elected officials represents an obligation of the Secretary existing at the time the levy is made. Since these described individuals are paid from the Federal Treasury, the Secretary of the Treasury already has possession of the funds which would be used to pay the obligation, and the "notice of levy" is simply the Secretary's notice that said funds are being applied to unpaid taxes instead of being paid to the officer, employee, or elected official. No seizure is necessary, and thus no "notice of seizure" (explained later) is ever issued. The notice of levy is usually served on the head of the Federal (or District of Columbia) agency (or the agent designated by him who is charged with payroll duties).
§ 6335. Sale of seized property.
(a) Notice of seizure--As soon as practicable after seizure of property, notice in writing shall be given by the Secretary to the owner of the property (or, in the case of personal property, the possessor thereof), or shall be left at his usual place of abode or business if he has such within the internal revenue district where the seizure is made. If the owner cannot be readily located, or has no dwelling or place of business within such district, the notice may be mailed to his last known address. Such notice shall specify the sum demanded and shall contain, in the case of personal property, an account of the property seized and, in the case of real property, a description with reasonable certainty of the property seized.
So you see that whenever the IRS makes a seizure, they are required by law to issue a "Notice of Seizure"(Form 2433). This notice also has another effect. Remember, at the outset of this letter, I stated that a "levy" was not a single act, but rather the whole process by which money was raised and applied to an unpaid tax. The levy process includes seizure and sale of the property, along with the actual application of the proceeds.
§ 6502. Collection after assessment.
(b) Date when levy is considered made--The date on which a levy on property or rights to property is made shall be the date on which the notice of seizure provided in section 6335(a) is given.
The 9th Circuit Court agrees with these procedures. In Arford v. United States (supra), a Notice of Seizure was a procedural requirement in order to effectuate the actual levy upon the seizure of Arford's retirement pay. This finding is in accord with 26 U.S.C. section 6502(b) which provides that a levy occurs on the date the Notice of Seizure is given pursuant to 26 U.S.C. section 6335(a), and not before.
The IRS levies on accrued salaries or wages by serving a "notice of levy" (Form 668-A or 668-W) on the employer of a Federal or District of Columbia officer, employee, or elected official. This is the only time the Internal Revenue Code states that the service of a "Notice of Levy" makes a levy. In all other cases, section 6502(b) tells us that a levy is considered made only when the "Notice of Seizure" is given.
Now, after reading all this, it should occur to you that the IRS's power to levy is actually very limited. Only property already possessed by the Secretary is subject to levy, and only property subject to forfeiture can be seized and brought into the possession of the Secretary if that property is not already possessed by the Secretary. So to summarize, seizure is limited by statute to certain specific items. Sections 7321 and 7608(b)(2)(C) strictly limit seizure authority to "property subject to forfeiture". Such property is described in sections 7301 through 7304. Property not subject to forfeiture cannot be seized, and a levy on any other property must be made on items already in the possession of the government. Section 6331(b) further states that a levy extends only to "property possessed".
Of course, there is a third way the Secretary may acquire possession of property which is not already in his possession, but you won't find it written in the Internal Revenue Code. The third way is simply an extension of the Secretary's authority under section 6301 to accept collection of internal revenue taxes which are voluntarily paid to him. If the IRS can get property turned over to the Secretary on a voluntary basis, then this property becomes property subject to levy and the Secretary may then levy upon it.
Yes, the IRS is actually bluffing non-federal employers, banks, and other third-party asset holders into turning over property to the Secretary when no authority to enforce such is given in the Internal Revenue Code! I will explain how the bluff works and why any employer, bank, or other third-party asset holder may simply refuse to turn over such property to the Internal Revenue Service, and that there is no penalty for not turning over such assets.
"Levy may be made by serving a notice of levy on any person in possession of, or obligated with respect to, property or rights to property subject to levy, including receivables, bank accounts, evidence of debt, securities, and salaries, wages, and other compensation."
Of course, we know now that when the regulation says that the levy may be made by serving a "Notice of Levy" on anyone having property "subject to levy", it means that the levy is made on accrued salaries or wages when the "Notice of Levy" is served on the employer of federal or District of Columbia employees, and, in the case of any other property already possessed by the Secretary, when the "Notice of Levy" is served on the person who has such property. This is a proper procedure for the IRS to adopt since section 6331(b) provides for a levy on any other property already possessed, but does not specifically state how such levy is to be carried out. In the case of a seizure, section 6502(b) already told us that the levy is made when the "Notice of Seizure" is given.
Now, the average person reading this regulation doesn't know what "property subject to levy" is, and when the "Notice of Levy" is served on him, he is led to believe that the law requires him to turn over to the IRS any property he has which belongs to the delinquent taxpayer. You now know, after reading all of the above, that this is not the case.
§ 6332. Surrender of property subject to levy.
(a) Requirement--Except as otherwise provided in this section, any person in possession of (or obligated with respect to) property or rights to property subject to levy upon which a levy has been made shall, upon demand of the Secretary, surrender such property or rights (or discharge such obligation) to the Secretary, except such part of the property or rights as is, at the time of such demand, subject to an attachment or execution under any judicial process.
(c) Special rule for banks--Any bank (as defined in section 408(n)) shall surrender (subject to an attachment or execution under judicial process) any deposits (including interest thereon) in such bank only after 21 days after service of levy.
(1) Extent of personal liability--Any person who fails or refuses to surrender any property or rights to property, subject to levy, upon demand by the Secretary, shall be liable in his own person and estate to the United States in a sum equal to the value of the property or rights not so surrendered, but not exceeding the amount of taxes for the collection of which such levy has been made, together with costs and interest on such sum at the underpayment rate established under section 6621 from the date of such levy (or, in the case of a levy described in section 6331(d)(3), from the date such person would otherwise have been obligated to pay over such amounts to the taxpayer). Any amount (other than costs) recovered under this paragraph shall be credited against the tax liability for the collection of which such levy was made.
(2) Penalty for violation--In addition to the personal liability imposed by paragraph (1), if any person required to surrender property or rights to property fails or refuses to surrender such property or rights to property without reasonable cause, such person shall be liable for a penalty equal to 50 percent of the amount recoverable under paragraph (1). No part of such penalty shall be credited against the tax liability for the collection of which such levy was made.
Again, we see that the law requires the surrender of "property subject to levy" upon which a levy "has been made". And again, the average person doesn't know exactly what all this means. You now know from reading the above that a levy "has been made" when a "Notice of Levy" is served on a person who has property "subject to levy", which means the "Notice of Levy" is given to some other delegate of the Secretary of the Treasury who has such property in his possession (or, in the case of accrued salaries or wages, to the head (or designated payroll agent) of a Federal or District of Columbia agency or instrumentality). It now becomes clear that this Code section was directed to other Treasury Secretary Delegates or heads of Federal or District of Columbia agencies or instrumentalities who may have possession of property, rights to property, or accrued salaries or wages belonging to the delinquent taxpayer, and the law requires them to surrender such property when the "Notice of Levy" is served on them..
Section 6332(c) also hints that there are penalties for failure to turn over property after a "Notice of Levy" has been served. You now know enough to know that this penalty would only apply if you have "property subject to levy" and you fail to surrender it upon demand by the Secretary. This was all discussed earlier and unless you're a person having such property in your possession or control, this penalty cannot possibly apply to you.
No civil action for the collection or recovery of taxes, or of any fine, penalty, or forfeiture, shall be commenced unless the Secretary authorizes or sanctions the proceedings and the Attorney General or his delegate directs that the action be commenced.
§ 7403. Action to enforce lien or to subject property to Payment of tax.
(a) Filing--In any case where there has been a refusal or neglect to pay any tax, or to discharge any liability in respect thereof, whether or not levy has been made, the Attorney General or his delegate, at the request of the Secretary, may direct a civil action to be filed in a district court of the United States to enforce the lien of the United States under this title with respect to such tax or liability or to subject any property, of whatever nature, of the delinquent, or in which he has any right, title, or interest, to the payment of such tax or liability. For purposes of the preceding sentence, any acceleration of payment under section 6166(g) shall be treated as a neglect to pay tax.
(b) Parties--All persons having liens upon or claiming any interest in the property involved in such action shall be made parties thereto.
(c) Adjudication and decree--The court shall, after the parties have been duly notified of the action, proceed to adjudicate all matters involved therein and finally determine the merits of all claims to and liens upon the property, and, in all cases where a claim or interest of the United States therein is established, may decree a sale of such property, by the proper officer of the court, and a distribution of the proceeds of such sale according to the findings of the court in respect to the interests of the parties and of the United States. If the property is sold to satisfy a first lien held by the United States, the United States may bid at the sale such sum, not exceeding the amount of such lien with expenses of sale, as the Secretary directs.
This is the due process written into the Internal Revenue Code. If the IRS wants to enforce collection of a tax, they have to file suit in Federal District Court, obtain a judgment, and execute the judgment with a court order in order to lawfully enforce the collection of the delinquent tax. The only obvious exception to this is when the Secretary already has possession of some property, in which case no court order is needed to reach the property since the property is already possessed.
Of course, the IRS likes to bluff people into voluntarily turning property over to them by serving "Notices of Levy" on them, as if this "makes" a levy and as if the person must surrender to the IRS any property he has belonging to the delinquent taxpayer. This is not the case, but as long as enough people fall for this bluff the IRS is going to continue using this ploy since it is far less expensive and far more efficient than having to go to court.
So the question comes down to this: What am I to do if I am ever served with a "Notice of Levy" ? Before I answer this, you must realize that you do not have to surrender any property to the IRS on the basis of such a notice, unless of course you are in custody or control of property "subject to levy". If the government wants to compel you to surrender any property belonging to the delinquent taxpayer, they must get a court order just like in any other garnishment proceedings. Basically, you should just sit back and wait for the Department of Justice to file suit. This way you will be protected by the court should you have to turn any property over to the government.
If you think that you can avoid being sued by complying with the "Notice of Levy" and turning over the property to the IRS, you would be wrong. It is true that you would avoid being sued by the Department of Justice, but you would then expose yourself to being sued by the person whose property you turned over. His cause of action would be against you since you turned his property over to the government without a court order, without his consent or permission, and without being required to surrender the property under any statute. He would have no cause of action against the IRS since the IRS basically did nothing wrong, and they were acting within the scope of their authority by accepting any property voluntarily turned over to them.
(e) Effect of honoring levy--Any person in possession of (or obligated with respect to) property or rights to property subject to levy upon which a levy has been made who, upon demand by the Secretary, surrenders such property or rights to property (or discharges such obligation) to the Secretary (or who pays a liability under subsection (d)(1)) shall be discharged from any obligation or liability to the delinquent taxpayer and any other person with respect to such property or rights to property arising from such surrender or payment.
This section relies on 6331 and both sections require a levy on property.
Because there is no judicial process and no levy has been made the person taking property based on a "Notice of Levy" is not relieved from liability to the person owning the property. Also, this section was written for the government's own Treasury Secretary Delegates or heads (or designated payroll agents) of Federal or District of Columbia agencies or instrumentalities who turn over "property subject to levy" upon which a levy "has been made". Unless you're a delegate of the Secretary of the Treasury or head (or designated payroll agent) of a Federal or District of Columbia agency or instrumentality you are not indemnified and you are exposed to a lawsuit by the owner of the property should you turn it over to the IRS.
"this treasury decision recodifies the portion of 26 CFR Part 301 entitled "Discovery of Liability and Enforcement of Title" into 27 CFR Part 70"
27 CFR Part 70 is exclusively for the enforcement of Alcohol, Tobacco and Firearms. Unless you are providing services and or are involved in this type of activity the taking of money on a Notice of Levy is theft.
Turn the property over, and the owner will sue you. Don't turn the property over, and the government may sue you, but should this happen you will have a judicial order which will protect you and your company from civil action. The best thing to do, under the circumstances, is to simply not turn over any property to the IRS unless you get a court order ordering you to do so. The "Notice of Levy" has no legal muscle behind it as explained earlier.
1. What is property "subject to levy" as used in section 6332, and is the property you are demanding property "subject to levy upon which a levy has been made"? Please note that I am aware of section 6502(b), which states that a levy is made on the date the section 6335(a) "Notice of Seizure" is given. Has the "Notice of Seizure" been issued?
2. Please explain the indemnification process under section 6332(d) if I turn the property over to you and the owner of the property sues me.
3. Is this "Notice of Levy" the result of a judgment entered by a court?
Since it does not appear to be a court order, and does not have a case number or a Judicial signature. What will happen to me if I do not turn this property over to you?
All of these are legitimate questions which should express genuine concerns you have about the whole levy procedure. Of course, the IRS will try to hint that you should turn the property over in order to avoid any penalties and court proceedings, but when they answer question #3, they will be forced to tell you that they will simply have to go to court in order to reach the "Levied" property. If you've ever been the garnishee in a garnishment proceeding, it is really not that bad. I would also suggest you give the agent a copy of this letter.
This letter should have answered most of your questions about levies and what your duties are if you should ever receive one. If you have any further questions, please do not hesitate to contact me again.
Please use the check sheet that I have attached to help you when you receive a Notice of Levy to see if it is valid or just an attempt to deceive you.
Do not proceed to the next step (question) unless the answer to each and every question below is YES. If the answer to ANY question is NO, the levy is invalid and is LEGALLY UNENFORCEABLE. YOU MAY BE HELD PERSONALLY LIABLE FOR HONORING SUCH A "NOTICE" WITHOUT AN ATTACHED COURT ORDER. Inform the IRS that you are unable to honor the "levy" untill ALL of the legal requirements for such have been met.
1.) Is there a copy ofthe court ordered warrant of distraint and Notice of Lien included with the Notice of Levy ?
2.) Does the tax that the IRS claims is owed arise from taxable activities subject to miscellaneous excise taxes under Title 26 USC, subtitle E, or those that would pertain to the enabling regulations of Title 27 CFR Part 70 (alcohol, tobacco, and firearms), or are you a Federal employer as defined in Title 26, section 3401(d) (in one of the U.S. territories and responsible for administering provisions under 26 USC subtitle C ?
3.) Was a valid Notice and Demand for unpaid tax sent to the individual whose property is the target of the levy ?
4.) Has a vaild Notice of Lien been filed with the appropriate court at least 10 days after the Notice and Demand was received, and has the court issued a warrant of distraint pusuant to IRS section 7403 ?
5.) Has the IRS sent at least three notices to the individual asking for payment and has the individual refused to pay ?
6.) Has the IRS sent a Notice of Intent to Levy to the individual at least 30 days prior to the date on the Notice of Levy you received ?
7.) Is the Notice of Levy signed by an IRS agent and is there a delegation order in existence giving that particular agent the authority to issue a Notice of Levy ?
If ALL of the above conditions have been satisfied, the levy could be valid. However, if you turn over property in response to an improper levy, the individual who owns the property can sue you personally for punitive as well as actual damages (26 CFR 301.6332-1c).
IT IS YOUR RESPONSIBILITYAS THE FIDUCIARY TO INSURE THAT ALL OF THE LEGAL REQUIREMENTS ARE MET !

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§ 7321

§ 7303

§ 7304

§ 6331

§ 6335

§ 6502
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§ 6332

§ 7403