If the IRS or
other tax collection agency is threatening to levy on your
bank account, attach your wages, tow your car away, or lock
up your business, you have several options available. The
Tax Help Law Firm can perform any of these actions for you
almost overnight, or find a lawyer in our network close to
you who can do the job. Protect yourself from back taxes,
levies, liens and other tax collection harassment.
Taxpayer's Assistance
Order
Pursuant to IRC §
7811 an independent office called the Office of the Taxpayer
Advocate is empowered to conduct a fast investigation of a
tax collection problem, including abusive or unfair tax
collection, and if necessary issue an order for the IRS
collection officer to cease collection activities, such
as levy or wage garnishment. And, the taxpayer advocate may
order the return of seized assets.
The Advocate may issue
such an order if, in the view of the Advocate, "the taxpayer
is suffering or about to suffer a significant hardship as a
result of the manner in which the internal revenue laws are
being administered by the (revenue officer)."
Factors that the Taxpayer
Advocate will consider include:
Whether or not there is an immediate threat of adverse
action;
Whether there has been a delay of more than 30 days in
resolving the taxpayer's account problems;
Whether the taxpayer will have to pay significant costs
(including legal fees) if relief is not granted;
or
Whether the taxpayer will suffer irreparable injury, or a
long-term adverse impact, if relief is not
granted.
[IRC §
7811(a)]
The help of the Taxpayer
Advocate is initiated by the filing of IRS Form 911, Request
For Taxpayer's Assistance Order. The form may be faxed to
one of the various offices of the Taxpayer's Advocate, or
Taxpayer's Assistance offices, located around the country.
The taxpayer may have his attorney initiate such action, in
which case the attorney will require the taxpayer's
signature on a Power of Attorney permitting the IRS to
discuss the matter with the attorney.
In clear-cut cases of
abusive collection this remedy may work quite well. One
downside is that the reaction time of the Taxpayer's
Advocate may not be fast enough to stop a pending seizure,
levy or lockup. The request for the order is first screened
by an IRS employee, then turned over for managerial review,
then assigned to a case worker, who will contact the
relevant revenue officer. All of this may take from a couple
of days to a week or more.
KEY
BENEFIT: The
advantage is that it is relatively inexpensive in terms of
legal fees.
Offer-In-Compromise
The offer-in-compromise
option is discussed in detail at this website; click on
Offers-In-Compromise (at top of page).
In a nutshell, an offer
is made for a settlement of the claim by submitting IRS Form
656. The offer of settlement may be made on the ground that
the taxpayer does not have the financial ability to pay the
full liability, or there is doubt about the taxpayer's legal
liability to pay the claim, or where under the circumstances
it would be unfair to force the taxpayer to pay the
claim.
KEY
BENEFITS: A
key benefit of making an offer using this method is that the
IRC requires that all tax collection activity stop while the
offer is being considered by the IRS. The average
settlement nationwide is 15 cents on the
dollar.
Chapter
7 or 13 Bankruptcy
In many cases taxes,
interest and penalties may be discharged in a Chapter 7
bankruptcy, or paid out over a three-to-five year court
approved payment plan (based on the taxpayer's ability to
pay) in a Chapter 13 bankruptcy. This option is discussed in
more detail at this website.(scroll up and click on "Learn
About Your Rights." "Discharge" means to erase ... in other
words, you will never have to pay the discharged taxes. In
some cases not all of one's income taxes may be discharged.
The very instant your
bankruptcy petition is filed the tax collector (yes ... even
the IRS!) must cease all collection activities. A kind of an
invisible shield called the "automatic stay" surrounds you.
No levy, lien, seizure, lockup or harassment to pay is
allowed. Your bank account, paycheck, car and other assets
are protected. The degree of protection varies according to
each individual's particular circumstances.
Discharging income taxes
in bankruptcy is tricky, and many bankruptcy lawyers do not
know how to do it. Your odds of a successful discharge of
taxes in bankruptcy are better if you select one of the Tax
Help Lawyers from this web site.
KEY
BENEFITS: A
key benefit to either Chapter of bankruptcy is that it
immediately halts all tax collection activity. And, it
usually erases all or a large portion of delinquent taxes.
Due Process
Hearing
In any situation where
the IRS is about to levy on a bank account, attach a
paycheck, file a lien, or take other tax collection action,
the taxpayer has the right to request a hearing by an
independent IRS appeals officer. This hearing is called a
"due process" hearing.
At least 30 days prior to
performing the threatened collection action the revenue
officer must give the taxpayer notice of his or her right to
a hearing. If the taxpayer does not make the request within
the 30 days of date of the NOTICE OF INTENT TO LEVY
the right to the hearing is waived (note, if you wait until
you receive the actual Notice of Levy, it is too late to
request a due process hearing; however, you can still
"appeal" the collection. See below).
The request is initiated
by filing IRS Form 12153, "Request For A Collection Due
Process Hearing." Pursuant to Internal Revenue Manual §
[5.1] 9.1, "The taxpayer is asked to file the
request for the hearing with the employee or function
initiating the action. Cases assigned to the Collection
Field function will have the assigned revenue officer's name
and address listed on the Collection Due Process (CDP)
hearing notice."
If adverse to the
taxpayer, the decision of the appeals officer may be
appealed to the U.S. Tax Court or other court of competent
jurisdiction. This process potentially may tie up the
collection activities for months or years.
The things that the
appeals officer may consider include a broad range of
issues, including illegal collection techniques, abusive
assessments or collection actions, the taxpayer's liability
and legal defenses to liability, and alternatives to
collection, such as installment plans and
offers-in-compromise.
KEY
BENEFITS: A
key benefit to filing for a due process hearing is that all
collection activity must cease, unless the IRS has good
reason to believe the taxpayer may be attempting to transfer
or conceal assets. And, anything illegal or unjust about the
lien or levy will be reviewed by a neutral
arbiter.
Needless to say, in most
cases it will be prudent for the taxpayer to be represented
by legal counsel at the hearing.
Collection appeals
equivalency hearings
If the request for a due
process hearing is untimely (not filed within 30 days of the
notice of intent to levy or file a lien) the taxpayer
may still file a collection "appeal," or request an
"equivalency" hearing ("CAP". However, in both cases
continued collection activity is within the discretion of
the IRS, and there is no appeal to court if the taxpayer
does not like the ruling.
Fair Debt Collection
regulations
IRM § [5.1]
1.7 05/27/99
1. IRC 6304 requires the IRS to comply
with certain sections of the Fair Debt Collection Practices
Act (FDCPA). These deal with:
- contacts regarding unpaid tax,
and
- harassment and abuse of taxpayers.
2. This law applies to contacts with all
taxpayers, including corporations and partnerships.
3. Violations of IRC 6304 could subject
the IRS to civil action (IRC 7433) by the taxpayer.
Specifically -
Contacting Taxpayers
1. Some contacts require the taxpayer's
consent, first. These include:
A. contacting the taxpayer at
any unusual time or place, or a time or
place an employee knows or should
know, is inconvenient to the taxpayer,
B. contacting the taxpayer at work, if
there is reason to believe the employer does not allow
this,
C. directly contacting a taxpayer who
has a known, authorized representative or one that can be
readily identified.
Exceptions:
D. If the representative does not
respond in a reasonable time, they can be bypassed. See
Section 1.10 of this chapter. Also the taxpayer can be
contacted directly if the
representative consents to the employee's direct contact.
E. If the contact is authorized by a
court.
2. Employees can generally assume that it
is convenient to contact the taxpayer after 8:00 a.m. and
before 9:00 p.m. local time at the taxpayer's location,
unless there is reason to know otherwise.
Awareness that the Taxpayer has a
Representative
1. An IRS employee is considered to know
about the representative if the taxpayer says there is one.
This can be written or oral. If the taxpayer is represented:
A. ask for a written power of
attorney or disclosure authorization form,
or
B. ask the taxpayer to provide the
name and address of the representative
2. There may be doubt whether a person
still represents the taxpayer or an issue is covered. If so
contact the representative and ask.
CAUTION:
If the IRS employee does not have the
power of attorney or some other written authorization, the
representative may be contacted, but no more can be
disclosed than what is authorized in IRC 6103(k)(6).
Promoting Public Confidence
1. It is IRS policy not to use methods
which are threatening or harassing to the public. See Policy
Statement P-1-1. IRC 6304 prohibits employees from
harassing, oppressing, or abusing any person in connection
with the collection of any unpaid tax.
2. The following actions are considered
violations:
A. the use or threat of use of
violence or other criminal means to harm the physical
person, reputation, or property of any person,
B. the use of obscene or profane
language to abuse the hearer or reader,
C. causing a telephone to ring or
engaging any person in telephone conversation with the
intent to annoy, abuse or harass any person at the called
number,
D. placing telephone calls without
meaningful disclosure of the caller's
identity, except as similar to rules
in Section 804 of the FDCPA.
EXCEPTION:
If the telephone call is only for the
purpose of acquiring location information about the
taxpayer, the employee cannot:
E. tell any third party that
they are an employee of the IRS, or
F. provide their title (R/O, TE, etc.)
to the third party unless , that information is requested
by the third party. "Location information" is defined as
the taxpayer's place of abode and phone number at such
place, or place of employment.
Installment
Agreements
Installment Agreements are arrangements
whereby the Internal Revenue Service allows taxpayers to pay
liabilities over time. Only agreements that provide for full
payment of liabilities may be granted. During the course of
agreements, penalty and interest continue to accrue. No
levies may be served during installment agreements.
For further information on this remedy see
the IRS Installment
Agreement Handbook.
KEY
BENEFITS: Once an installment
agreement is entered into, the IRS is barred from collection
activity. And, typically collection is halted while the
agreement is being negotiated, if the taxpayer is acting in
good faith.
Uncollectible
status
The IRS may designate your account as
"Currently not collectible," designated as Collection Status
Code 53. This is sometimes referred to as the account being
"53'd." This means the IRS is convinced that collection
against you is not possible without creating an undue
hardship, or is simply not collectible at all, and so all
collection efforts are stopped until there is a change of
circumstances allowing collection to resume. For further
information about this remedy, visit the Internal
Revenue Manual.
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Organization
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