Keith Fogg (Procedurally Taxing): Challenging Levy Compliance (March 30, 2022)

Keith Fogg, director of the Federal Tax Clinic at Harvard Law School’s Legal Services Center, has made available for download his article “Challenging Levy Compliance”, published on the Procedurally Taxing blog. The abstract is as follows:

The IRS regularly issues levies to banks and to employers.  Taxpayers subject to the levy have almost no way to stop the levy by suing the party receiving the levy.  Similarly, the party receiving the levy has almost no way to avoid making payment on the levy without running into trouble.  We have discussed the issue of suing to stop the levy before here (raising possibility that such a suit could prevail against a bank levy if the account was filled with funds exempt from levy).  Most cases in which taxpayers sue to stop a levy are relatively straightforward and today I write about one of those cases.  The Fourth Circuit recently affirmed the district court decision in the case of Nicholson v. Unify Financial Credit Union, No. 21-2095 (4thCir. 2022) holding, per curiam, that the suit by the taxpayer against the credit union to stop the credit union from paying the IRS should be tossed.

Click here to read Keith Fogg’s summary of “Challenging Levy Compliance”

Posted by Marin Larkin, Associate Editor, Wealth Strategies Journal.

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