The IRS Form 668D (CP78), also known as the Release of Levy/Release of Property from Levy notice, is a document issued by the Internal Revenue Service (IRS) to inform a taxpayer or third party that a specific levy has been released. This form is typically associated with the IRS’s collection enforcement actions. In this article, we will unravel the complexities of IRS Form 668D (CP78) and provide essential insights into its purpose, the circumstances prompting its issuance, and how to respond if you receive one.
What Is IRS Form 668D (CP78)?
IRS Form 668D (CP78) is a legal document released by the IRS to sunlight a resolved tax issue. The IRS executes levies to seize a taxpayer’s property or money to settle back taxes. However, once the taxpayer fulfills the tax obligations or when it’s established that releasing the levy is in the best interest of both the taxpayer and the government, Form 668D (CP78) is sent out.
The Role and Impact of IRS Form 668D (CP78)
This notice plays a vital role in restoring a taxpayer’s control over their property or funds. It effectively terminates the levy, clearing up the individual’s or business’s financial and legal liabilities related to a previously unpaid tax bill.
Why You Might Receive IRS Form 668D (CP78)
There are several reasons why the IRS might issue Form 668D (CP78):
- The tax debt has been fully paid.
- The period for collection ended before the levy was executed.
- Releasing the levy will facilitate the collection of the tax.
- IRS has agreed to an Offer in Compromise or Installment Agreement to satisfy the tax debt.
- The taxpayer’s financial condition establishes that the levy creates an economic hardship.
What to Do If You Receive IRS Form 668D (CP78)
Upon receiving the Form 668D (CP78), it is advisable to keep it for your records. If you dispute the release of levy, it’s best to consult with a tax advisor or attorney to assist you in your case.
Frequently Asked Questions
What are the main differences between IRS Form 668D (CP78) and other IRS levy forms?
Form 668D (CP78) is a release of levy form, unlike other levy forms that communicate the initiation of a levy action. It signals the cancellation of the levy.
What should I do if I mistakenly receive IRS Form 668D (CP78)?
If you believe you’ve received this form in error, contact the IRS immediately to resolve the issue. Retain a copy of the form for your records as well.
How long does it take for a levy to be released after receiving IRS Form 668D (CP78)?
The release of the levy should be almost instantaneous after the issuance of the IRS Form 668D (CP78). Its effects should be noticeable as soon as your bank or employer receives the form.
In conclusion, IRS Form 668D (CP78) is an essential document indicating the release of the levy or seizure command. Understanding its capabilities, role, and handling can be beneficial in efficiently handling your tax matters. Always consult with a professional if you’re uncertain about any IRS communication.