Jeopardy levy may precede normal collection notices

Plain-English summary

Chief Counsel advised that the IRS can make a jeopardy levy even when it has not made a jeopardy or termination assessment. The levy may occur at several points before the usual notice-and-waiting periods have run, including before notice and demand, before the Section 6331(a) waiting period expires, or before completion of collection-due-process notice periods. The IRS must still have facts that would have supported a jeopardy assessment. Those facts include an apparent plan to leave the country, concealment or dissipation of assets, threatened insolvency, or possession of more than $10,000 in unclaimed cash or its equivalent.

Ruling snapshot

• Question: Can the IRS issue a jeopardy levy without first making a jeopardy or termination assessment?
• Outcome: advice
• Key authorities: IRC §§ 6303, 6320(a), 6330(a), 6331(a), 6331(d), 6867(a); Treas. Reg. § 1.6851-1(a)(1)

Full text (IRS public release)

ID:        CCA_2018020714332320
UILC:      6331.30-00

Number: 201830013
Release Date: 7/27/2018
From:
Sent: Wednesday, February 07, 2018 2:33:23 PM
To:
Cc:
Bcc:
Subject: FW: Innocent Spouse and Jeopardy


Good afternoon,

A “jeopardy levy” is not limited to situations in which there is a jeopardy or termination
assessment. See IRM 5.11.3, Notice of Levy - Jeopardy Levy without a Jeopardy. A
jeopardy levy without a jeopardy or termination assessment can happen: (1) after the tax is
assessed but before the section 6303 notice and demand for payment is issued; (2) after
the notice and demand is issued but before the 10-day period in section 6331(a) has
expired; (3) after the 10-day period but before the 30-day notice of intent to levy (section
6331(d)) and notice of a right to a CDP hearing (sections 6320(a) and 6330(a)) have been
issued; or (4) after the notice of intent to levy and notice of a right to a CDP hearing have
been issued, but before the 30-day period has passed. See I.R.M. 5.11.3.5.

A jeopardy levy requires a condition that would have allowed a jeopardy assessment to be
made even if there has not been a jeopardy or termination assessment. I.R.M. 5.11.3.2.
See Policy Statement P-4-88 in I.R.M. 1.2.13.1.27 regarding what needs to be present to
make a jeopardy assessment. Collection is in jeopardy when at least one of the following
conditions exists: (1) the taxpayer is or appears to be designing to leave the United States
or to conceal himself; (2) the taxpayer is or appears to be designing to hide, transfer,
conceal, or dissipate his assets; (3) the taxpayer's financial solvency appears to be
imperiled; or (4) an individual is in physical possession of cash, or its equivalent, in excess
of $10,000 who does not claim the cash as his, or as belonging to another person whose
identity can be readily ascertained and who acknowledges ownership of the cash. Policy
Statement P-4-88; see I.R.C. § 6867(a); Treas. Reg. § 1.6851-1(a)(1).

Please let us know if you have any other questions or concerns.

Thanks,
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