IRS Notice of Intent to File Levy--How quick is the Automatic Stay?

[avengers]

I received a Notice of Intent to File Levy dated September 24, 2014 (It's a 1058 letter). They give us 30 days to pay the debt or they will start the levy process. I'd already met with my attorney and we plan to electronically file Chapter 7 on October 22, 2014. (I'd ask my attorney, but he's on vacation this week).

I know that, once the Automatic Stay is in place, the IRS can't file the levy (the tax debt qualifies to be discharged). But is it possible that the IRS will file their levy before they get notice of the Chapter 7? For obvious reasons, I don't want to deal with an IRS lien in the bankruptcy case.

Should I call them and try to arrange a payment plan with them, just to delay them from filing the lien? Or am I worrying over nothing and by the time they even attempt to file a lien, they'll have notice and will be prevented from doing so?

And, before anyone asks, we can't file before October 17 so we buy can buy an exempt car before filing. The attorney I hired normally does filings on Wednesdays, which is why it will be the 22nd.

Should I (or my attorney) call the IRS on the day of filing and tell them of the filing to stop them from filing the lien?

[justbroke]

The automatic stay comes in full force the micro-second that you file. Even if the IRS somehow did not get notice for many days, the automatic stay makes any attempt to perfect a lien void from the beginning. (There are very specific caveats, but this would not be one of them.)

I hope you told your attorney that you are buying a car. If the IRS files their lien before you file and you already purchased the car... there could be issues.

[avengers]

The automatic stay comes in full force the micro-second that you file. Even if the IRS somehow did not get notice for many days, the automatic stay makes any attempt to perfect a lien void from the beginning. (There are very specific caveats, but this would not be one of them.)

I realize that they aren't allowed to perfect a lien. I just want to know if they are prevented from perfecting a lien. IOW, if they file a lien after I file chapter 7, my attorney can force them to get rid of it. But that's an extra step. I don't want them to file a lien at all.

From what other sites have said, it looks like I should call the number on the IRS letter as soon as I get a filing number for my Chapter 7 filing. That way, they won't even attempt to file a lien.

I hope you told your attorney that you are buying a car. If the IRS files their lien before you file and you already purchased the car... there could be issues.

They aren't going to file a lien before we file chapter 7. As I said, their letter says they will not file a lien before October 24 (I believe that, by law, they are not allowed to file a lien before the 30 day period is over). We are filing Chapter 7 on October 22 at the latest.

And yes, I told my attorney we are buying a car. The reason is simple. I have two choices: have the trustee take 6000 non-exempt dollars from my bank account or buy a $6000 car that is exempt from bankruptcy. Not a difficult choice to make.

[justbroke]

I realize that they aren't allowed to perfect a lien. I just want to know if they are prevented from perfecting a lien. IOW, if they file a lien after I file chapter 7, my attorney can force them to get rid of it. But that's an extra step. I don't want them to file a lien at all.

That's what I wrote. If they were to file a lien, it would be "void" (meaning that the filing of the IRS Notice of Tax Lien (NTL) after you filed your petition, meant nothing with respect to pre-petition taxes). The question is did they have an enforceable lien at the time of filing. If they did have an enforceable lien, then they can perfect it without an issue, although they would typically file a relief from stay motion. Whether the IRS would pursue a NTL is a question for the IRS or is a tax consultant question, and I'm neither a tax specialist or attorney.

Please know that the IRS is automatically notified electronically within 48 hours of filing. Should you wish to call them, that's fine as well. I don't know if anyone that "needs" to immediately call the IRS after filing, unless the IRS was about to "execute" a levy action. (Even that levy would be void, but it would not be instantaneous and maybe not even "automatic" to recover the levied funds.)

And yes, I told my attorney we are buying a car. The reason is simple. I have two choices: have the trustee take 6000 non-exempt dollars from my bank account or buy a $6000 car that is exempt from bankruptcy. Not a difficult choice to make.

I was just making sure that you informed your attorney and had sufficient exemptions to cover this purchase, as well as your other personal property.

[avengers]

That's what I wrote. If they were to file a lien, it would be "void" (meaning that the filing of the IRS Notice of Tax Lien (NTL) after you filed your petition, meant nothing with respect to pre-petition taxes). The question is did they have an enforceable lien at the time of filing. If they did have an enforceable lien, then they can perfect it without an issue, although they would typically file a relief from stay motion. Whether the IRS would pursue a NTL is a question for the IRS or is a tax consultant question, and I'm neither a tax specialist or attorney.

Thanks. What I was worried about was the IRS tying up my bank account. Again, I know they aren't allowed to do it. But if they inadvertently filed a levy (because they didn't receive notice in time), the bank would put a hold on my account (they have no idea if the levy is allowed or not) and there's a bunch of hassle I would have to go through to get rid of the levy.

[justbroke]

Thanks. What I was worried about was the IRS tying up my bank account. Again, I know they aren't allowed to do it. But if they inadvertently filed a levy (because they didn't receive notice in time), the bank would put a hold on my account (they have no idea if the levy is allowed or not) and there's a bunch of hassle I would have to go through to get rid of the levy.

That would be a levy action. A Notice of Tax Lien is not a levy. If you receive a Notice of Levy, or intent to levy (whatever they call it), then you should probably be more concerned. I have had the threat of an NTL before I filed, and I filed without issue and without notifying the IRS.

Again, feel free to call once you have a case number. They'll probably refer you to their insolvency department and will put a hold on your file.

[avengers]

Sorry for the confusion. Yes, I did mean levy, not lien. The letter is titled "Notice of Intent to Levy"

[justbroke]

Sorry for the confusion. Yes, I did mean levy, not lien. The letter is titled "Notice of Intent to Levy"

In that case, I would notify the IRS by phone with the case number handy. Please know that it can take a couple of days for the Intake Clerk's office to actually create the case in CM/ECF (PACER). However, you should get your case number the instant you file.