Received Letter 2439 Notice of Jeopardy Levy, How to Respond

Received Letter 2439 Notice of Jeopardy Levy?

While there are many different types of letters and notices that the IRS can send a taxpayer on matters involving taxes, interest, and penalties none are as dangerous as the IRS Letter 2439 which refers to a Notice of Jeopardy Levy. In most situations, taxpayers have to receive multiple notices before an actual levy can be issued. These are often contained in CP503 and CP504 Notices. In some situations, the Internal Revenue Service believes that their ability to collect on an IRS Tax Levy is in jeopardy and therefore they obtain the ability to seek a levy without going through the usual process of sending several rounds of pre-notice letters. This is referred to as a Notice of Jeopardy Levy and the Taxpayer receives the notice on a Letter 2439 or 2439A. When a taxpayer receives one of these types of notices they obtain the ability to pursue an Appeal or Collection Due Process Hearing. Let’s take a look at the basics of IRS Letter 2439.

IRM 5.11.3.2 (Jeopardy Levy Considerations)

As provided by the IRM:

• • • Generally, if collection is in jeopardy, there is a jeopardy or termination assessment. Then there is an immediate notice and demand which is followed by a jeopardy levy.

    • Sometimes, however, there may already be an assessment before jeopardy is known and in some of those cases, collection under regular procedures may have begun before the jeopardy is known.

A taxpayer must be offered IRC 7429 appeal rights when:

• • • The notice and demand described in IRC 6303 for an assessment has not been issued or the 10-day waiting period arising after the issuance of that notice has not expired; or

    • A notice of intent to levy described in IRC 6331 (d)(1) specifying each tax and tax period has not been issued for the property subject to levy or the waiting period described in IRC 6331 (d)(2) has not expired. See IRM 5.11.1.3.2(4), Required Notices.

    • A taxpayer must be offered Collection Due Process (CDP) rights pursuant to IRC 6330 (f) within a reasonable period of time after the levy when the taxpayer has not been offered a hearing previously for the taxable period for the type of tax subject to the levy.

    • A taxpayer will be offered an appeal under the Collection Appeals Program (CAP) when the taxpayer is not entitled to either CDP appeal rights or section 7429 appeal rights, and when the taxpayer who is entitled to such rights has declined them.

    • Situations in which a taxpayer may request an appeal under CAP can arise in the following situations in which the Service is generally prohibited from levying, but for which an exception for jeopardy levy has been provided:

      • • On the appearance date of a summons,

        • While an installment agreement is pending or active,

        • For 30 days following the date of termination of an installment agreement and during an appeal of the termination,

        • During the period a rejected installment agreement can be appealed or is being appealed,

        • During the period an offer in compromise is pending, or

        • During the period a rejected offer in compromise can be appealed or is being appealed.

What is IRC 7429?

As provided by the Internal Revenue Code:

(a)Administrative review

(1)Administrative review

• • • (A) Prior approval required No assessment may be made under section 6851(a), 6852(a), 6861(a), or 6862, and no levy may be made under section 6331(a) less than 30 days after notice and demand for payment is made, unless the Chief Counsel for the Internal Revenue Service (or such Counsel’s delegate) personally approves (in writing) such assessment or levy.

    • (B) Information to

• • • • taxpayer Within 5 days after the day on which such an assessment or levy is made, the Secretary shall provide the taxpayer with a written statement of the information upon which the Secretary relied in making such assessment or levy.

(2)Request for review

• • • Within 30 days after the day on which the taxpayer is furnished the written statement described in paragraph (1), or within 30 days after the last day of the period within which such statement is required to be furnished, the taxpayer may request the Secretary to review the action taken.

(3)Redetermination by Secretary

• • • After a request for review is made under paragraph (2), the Secretary shall determine— (A)whether or not—

      • (i) the making of the assessment under section 6851, 6861, or 6862, as the case may be, is reasonable under the circumstances, and

      • (ii) the amount so assessed or demanded as a result of the action taken under section 6851, 6861, or 6862 is appropriate under the circumstances, or (B)whether or not the levy described in subsection (a)(1) is reasonable under the circumstances.

Requesting a CDP Hearing

Taxpayers may request a CDP hearing upon receipt of a:

• • • Letter 3172, Notice of Federal Tax Lien Filing and Your Rights to a Hearing Under IRC 6320

    • Letter 11, Final Notice – Notice of Levy and Notice of Your Right to a Hearing

    • ACS LT 73

    • ACS LT 75

    • Letter 1058, Final Notice Reply within 30 Days

    • Letter 1058 (BR), Final Notice Reply within 30 Days (Braille Version)

    • Letter 1058 (SP), Final Notice Reply within 30 Days – Spanish

    • Letter 1058-A, Notice of Intent to Levy and Notice of Your Right to a Hearing for Joint Filers

    • Letter 1058-A (SP), Notice of Intent to Levy and Notice of Your Right to a Hearing for Joint Filers (Spanish)

    • Letter 1058-B, Final Notice Reply Within 30 Days – Branded Prescription Drugs

    • Letter 1058-D, Post Levy Collection Due Process Notice

    • Letter 1058-D (SP), Post Levy Collection Due Process Notice (Spanish)

    • Letter 1058-F, Post Levy Federal Contractor Collection Due Process

    • Letter 1058-F (SP), Post Levy Federal Contractor Collection Due Process (Spanish)

    • Letter 1058-I, Final Notice Reply within 30 Days – Insurance Provider Fee

    • CP 77, 90, 92, 242 and 297 Letter 2439, Notice of Jeopardy Levy and Right of Appeal

Timing an Appeal vs CDP

Typically, the taxpayer has to choose whether they prefer an Appeal or a Collection Due Process Hearing. While oftentimes the Collection Due Process Hearing will benefit the taxpayer more than an appeal, with a Notice of Jeopardy levy — timing is a key issue and since the appeal can come faster, oftentimes a taxpayer may have to decide on the appeal in order to get a quicker review of this situation than waiting out the collection due process, which can still take significantly more time, even when Jeopardy Levy is involved

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