You Can Sue the IRS for Unauthorized Collection Action

Posted on August 01, 2012

Can you sue the IRS if it improperly takes action to collect a tax liability from you? The answer is absolutely yes. In a recent federal case, the taxpayer entered into an installment agreement with the IRS and made two successive payments. However, before she could make her third payment, the IRS levied on her wages for a total of ten weeks. The taxpayer suffered a severe financial hardship including losing her home, losing the furniture in the home, closing her bank account and being forced to move in with her daughter. Although the IRS eventually returned the levied money to the taxpayer, the taxpayer filed a lawsuit against the IRS for the unauthorized collection of taxes. Ruling for the taxpayer, the Court awarded $100,000.00 to her stemming from the IRS