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People First Initiative: Liens and Levies (Part I)

Topic: People First Initiative: Liens and Levies (Part I)

Q. Will levies and wage garnishments remain in place or will these be paused from 4/1 to 7/15? Can the taxpayer request a pause? If so, how?

A. Levies will not be automatically released. IRS will consider taxpayers’ requests to release levies on a case by case basis if the levy is causing an economic hardship. “Economic hardship” means the levy prevents the taxpayer from meeting basic, reasonable living expenses. The IRS may ask for additional financial information to determine if a levy is causing an economic hardship.

To request a release of levy, if the taxpayer is working with a revenue officer, they should contact the revenue officer. For cases not assigned to a revenue officer, taxpayers who require a levy release should call the number on the notice of levy. If you are unable to get through, fax your request to 855-796-4524. Please include your name, address and social security numbers (for both of you and your spouse if you filed jointly) with your request. In addition, include the name, address and fax number of your employer or bank where the levy is being processed. Note that this fax number will only be used to address emergency levy release requests. Due to our current limited staffing, we will not respond to other issues sent to this fax line.

(This FAQ is not included in the Internal Revenue Bulletin, and therefore may not be relied upon as legal authority. This means that the information cannot be used to support a legal argument in a court case.)

(IRS FAQ – IRS.gov) (TTT 06/02/2020)

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People First Initiative (Part III)

Topic: People First Initiative (Part III)

Due to COVID-19, the IRS’ People First Initiative provides relief to taxpayers on a variety of issues from easing payment guidelines to delaying compliance actions. This relief is effective through the filing and payment deadline, Wednesday, July 15, 2020.

· Automated liens and levies – IRS delayed issuing new automated and systemic liens and levies. Taxpayers experiencing a hardship due to a levy should reach out to their assigned IRS contact or fax their information to 855-796-4524.

· Certifications to the State Department – IRS has delayed new certifications of taxpayers who are considered seriously delinquent. This affects a person’s ability to receive a new or renewed passport. Existing certifications will remain in place unless their tax situation changes.

· Private debt collection – IRS will not forward new delinquent accounts to private collection agencies during this period.

(IRS Tax Tip – IRS.gov) (TTT 05/26/2020)

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People First Initiative (Part II)

Topic: People First Initiative (Part II)

Due to COVID-19, the IRS’ People First Initiative provides relief to taxpayers on a variety of issues from easing payment guidelines to delaying compliance actions. This relief is effective through the filing and payment deadline, Wednesday, July 15, 2020.

· Delinquent return filings – The IRS will not default an OIC for taxpayers who are delinquent in filing their tax return for 2018. However, they should file any delinquent 2018 return and their 2019 return by July 15, 2020.

· Non-filers – More than 1 million households who haven’t filed tax returns in the last three years are owed refunds. The deadline to get refunds on 2016 tax returns is July 15, 2020. Those who owe taxes on delinquent returns may visit IRS.gov for payment options. The longer the debt is owed, the more penalties and interest accrue.

· Field collection activities – IRS stopped field revenue officer enforcement actions, such as liens and levies. Revenue officers will continue to pursue high-income non-filers and perform other similar activities where necessary.

(IRS Tax Tip – IRS.gov) (TTT 05/19/2020)

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People First Initiative (Part I)

Topic: People First Initiative (Part I)

Due to COVID-19, the IRS’ People First Initiative provides relief to taxpayers on a variety of issues from easing payment guidelines to delaying compliance actions. This relief is effective through the filing and payment deadline, Wednesday, July 15, 2020.

· Existing Installment Agreements –Under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are delayed. Those currently unable to meet the terms of an Installment Payment Agreement or Direct Deposit Installment Agreement may cancel payments during this period with no default. By law, interest will continue to accumulate on any unpaid balances.

· New Installment Agreements – People who can’t pay all their federal taxes can establish a monthly payment agreement.

· Pending Offer in Compromise applications – Taxpayers have until July 15, 2020, to provide additional information for a pending OIC. The agency generally won’t close any pending OIC request before July 15 without the taxpayer’s consent.

· OIC payments – Taxpayers can delay all payments on accepted OICs until July 15, 2020. Interest may accrue, and missed payments are due when the suspension period ends. Taxpayers can call the number on their acceptance letter to address their needs.

(IRS Tax Tip – IRS.gov) (TTT 05/12/2020)

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People First Initiative – Installment Agreements

Topic: People First Initiative – Installment Agreements

IRS People First Initiative includes relief for taxpayers with Installment Agreements

· On March 25, 2020, the IRS announced The People First Initiative to provide compliance relief to taxpayers experiencing COVID-19 related hardships, which includes relief for those with Installment Agreements.

· The IRS encourages taxpayers to continue making their payments during this time, but the IRS will not default Installment Agreements due to missing payments during the suspension period that began April 1, 2020 and currently ends July 15, 2020.

· The IRS is unable to halt debit payments from banks for Direct Debit Installment Agreements (also known as DDIAs) during the suspension period. Taxpayers with a DDIA who want to suspend payments should contact their bank directly. Banks are required to comply with customer requests to stop recurring payments within a specified timeframe. View the Office of Comptroller of Currency FAQ on Preauthorized Withdrawals for guidance needed to stop automatic payments by their bank or financial institution.

Note: The suspension period began April 1, 2020 and expires July 15, 2020. Taxpayers who choose to suspend DDIA payments during this time must alert their financial institution to resume their direct payments at least two weeks before their next payment is due to avoid defaulting of their agreement,

(IRS News Release – IRS.gov) (TTT 05/05/2020)

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People First Initiative – liens and levies

Topic: People First Initiative – liens and levies

People First Initiative: IRS suspends certain collection actions

On March 25, 2020, the IRS announced The People First Initiative to provide compliance relief to taxpayers experiencing COVID-19 related hardships. Part of that relief includes suspending most of its enforced collection actions.

· The IRS will suspend the issuance of any new Notices of Federal Tax Lien and levies initiated by field revenue officers beginning April 1, 2020 through July 15, 2020.

· The IRS is also suspending the issuance of new automated levies, and new systemic liens and levies during this period.

· The IRS will not automatically release existing levies.

· The IRS will consider requests to release levies if the levy is causing an economic hardship.

Please contact their assigned revenue officer to request the release of levy due to economic hardship. Taxpayers who are not working with an assigned revenue officer should call the number on the notice of levy. If a taxpayer is unable to get through, they should fax their information to (855) 796-4524. See the release of levy information on the IRS COVID-19 status page for details.

Note: Field revenue officers will continue to pursue high-income non-filers and perform other similar activities when warranted.

(IRS News Release – IRS.gov) (TTT 04/28/2020)

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Economic Impact Payment Info

If you, or someone you know, do not file tax returns because they make less than the filing threshold, they collect social security, and have dependents, they need to act by 4/22 to get their maximum economic impact payment now. If they do not, they will have to wait until after they file a 2020 return to get the dollars they could receive today.

 

For more info:  IR 2020 www.irs.gov

 

Also, anyone is welcome to get more info on the Economic Impact Payment Discussion in this free IRS webinar April 23.

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Federal Tax Levy Collection Actions in Detail (Part IV)

Federal Tax Levy Collection Actions in Detail (Part IV)

More examples of property the IRS can seize (“levy”)

· Your federal payments. As an alternative to the levy procedure used for other payments such as dividends and promissory notes, certain federal payments may be systemically seized through the Federal Payment Levy Program in order to pay your tax debt. Under this program, the IRS can generally seize up to 15% of your federal payments (up to 100% of payments due to a vendor for property, goods or services sold or leased to the federal government). They will serve the levy once, not each time you are paid. The levy continues until your debt is fully paid, other arrangements are made, the collection period ends, or the IRS releases the levy. The federal payments that can be seized in this program include, but aren’t limited to, federal retirement annuity income from the Office of Personnel Management, Social Security benefits under Title II of the Social Security Act (OASDI), and federal contractor/vendor payments.

· Your house, car, or other property. If the IRS seizes your house or other property, they will sell your interest in the property and apply the proceeds (after the costs of the sale) to your tax debt. Prior to selling your property, they will calculate a minimum bid price. They will also provide you with a copy of the calculation and give you an opportunity to challenge the fair market value determination. The IRS will then provide you with the notice of sale and announce the pending sale to the public, usually through local newspapers or flyers posted in public places. After giving public notice, they will generally wait 10 days before selling your property. Money from the sale pays for the cost of seizing and selling the property and, finally, your tax debt. If there’s money left over from the sale after paying off your tax debt, they will tell you how to get a refund.

Next week: Property that can’t be seized (“levied”)

(IRS Publication 594 and IRS.gov) (TTT 04/14/2020)

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Federal Tax Levy Collection Actions in Detail (Part III)

Federal Tax Levy Collection Actions in Detail (Part III)

Examples of property the IRS can seize (“levy”)

· Wages, salary, or commission held by someone else. If the IRS seizes your rights to wages, salary, commissions, or similar payments that are held by someone else, they will serve a levy once, not each time you’re paid. The one levy continues until your debt is fully paid, other arrangements are made, or the collection period ends, or the levy is released. Other payments you receive, such as dividends and payments on promissory notes, are also subject to seizure. However, the seizure only reaches the payments due or the right to future payments as of the date of the levy.

· Your bank account. Seizure of the funds in your bank account will include funds available for withdrawal up to the amount of the seizure. After the levy is issued, the bank will hold the available funds and give you 21 days to resolve any disputes about who owns the account before sending us the money. After 21 days, the bank will send the IRS your money, and any interest earned on that amount, unless you have resolved the issue in another way.

· Your retirement account, including Qualified Pension, Profit Sharing, and Stock Bonus Plans under ERISA; IRAs, Retirement Plans for the Self-Employed (such as SEP-IRAs and Keogh Plans) and the Thrift Savings Plan. Depending on the terms of the plan a levy may attach to the funds in which you have a vested right.

Next week: More examples of property the IRS can seize (“levy”)

(IRS Publication 594 and IRS.gov) (TTT 04/07/2020)

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Federal Tax Levy Collection Actions in Detail (Part II)

Federal Tax Levy Collection Actions in Detail (Part II)

Reasons the IRS may seize (“levy”) your property or rights to property

If you don’t pay your taxes (or make arrangements to settle your debt), the IRS could seize and sell your property. They will not seize your property to collect an individual shared responsibility payment. They usually seize only after the following things have occurred.

The IRS assessed the tax and sent you a bill,

You neglected or refused to pay the tax, and

they sent you a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days before the seizure.

However, there are exceptions for when the IRS does not have to offer you a hearing at least 30 days before seizing your property. These include situations when:

The collection of the tax is in jeopardy,

A levy is served to collect tax from a state tax refund,

A levy is served to collect the tax debt of a federal contractor, or

A Disqualified Employment Tax Levy (DETL) is served. A DETL is the seizure of unpaid employment taxes and can be served when a taxpayer previously requested a Collection Due Process appeal on employment taxes for other periods within the past 2 years.

If the IRS serves a levy under one of these exceptions, they will send you a letter explaining the seizure and your appeal rights after the levy is issued.

Next week: Examples of property the IRS can seize (“levy”)

(IRS Publication 594 and IRS.gov) (TTT 03/31/2020)