The IRS can partially release a levy that includes an excessive assessment

Plain-English summary

The IRS had abated part of a deficiency assessment as excessive, but later issued a levy that still reflected the excessive amount. Counsel considered whether the levy remained effective up to the correct assessment or instead had to be withdrawn and replaced. The advice identified a simpler solution: use Form 668-D to release the levy only to the extent of the excessive amount. That form permits a partial release of levy or property from levy.

Ruling snapshot

• Question: How should the IRS correct a levy that includes an amount already abated as excessive?
• Outcome: Advice given: use Form 668-D to make a partial release.
• Key authorities: IRC § 6343

Full text (IRS public release)

ID: CCA_2017103109524120
UILC: 6343.00-00

Number: 201746024
Release Date: 11/17/2017
From:
Sent: Tuesday, October 31, 2017 9:52:41 AM
To:
Cc:
Bcc:
Subject: RE: assessment/levy question

Good morning.

A portion of a deficiency assessment was abated as excessive. However, the Service issued a levy reflecting the excessive amount. Cindy asked if “the levy [is] good up to the correct amount of the assessment or should R withdraw levy and issue new one for correct amount?” Last week, I tossed around a couple of ideas. This is a better solution than what I suggested last week: Form 668-D, Release of Levy/Release of Property from Levy, has a section for doing a partial release, and it can be used here. By the way, I don’t understand the supervisor’s reasoning.

If you would like to discuss this further, please contact me.