Topic: IRS and Passports – Alert!!
IRS action affecting passports
The Fixing America’s Service Transportation (FAST) Act of 2015, enacted by Congress and signed into law on December 4, 2015, requires the Internal Revenue Service to notify the State Department of taxpayers certified as owing a seriously delinquent tax debt.
Seriously delinquent tax debt means an unpaid, legally enforceable federal tax debt of an individual totaling more than $51,000 (including penalties and interest) for which a Notice of Federal Tax lien has been filed and all administrative remedies under IRC § 6320 have lapsed or been exhausted, or a levy has been issued.
If you are individually liable for tax debt (including penalties and interest) totaling more than $51,000 and you do not pay the amount you owe or make alternate arrangements to pay, the IRS may notify the State Department that your tax debt is seriously delinquent.
The State department generally will not issue or renew, and may revoke, your passport after being notified of your seriously delinquent tax debt. For additional information on passport certification visit www.irs.gov/passports.
(IRS Publication 594 and IRS.gov) (TTT 09/01/20)
Topic: Summons – How the IRS Gathers Information (Part II)
If the IRS serves a third-party summons to determine your tax liability,
you’ll receive a notice indicating that we’re contacting a third party. Third parties can be financial institutions, record keepers, or people with information relevant to your case. They won’t review their information or receive testimony until the end of the 23rd day after the notice was given.
You also have the right to:
• Petition to reject (“quash”) the summons before the end of the 20th day after the date of the notice, or
• Petition to intervene in a suit to enforce a summons to which the third party didn’t comply.
If the IRS issues a third-party summons to collect taxes you already owe, you won’t receive notice or be able to petition to reject or intervene in a suit to enforce the summons.
(IRS Publication 594 and IRS.gov) (TTT 08/24/20)
Topic: Summons – How the IRS Gathers Information (Part I)
Summons: Used to secure information
If the IRS is having trouble gathering information to determine or collect taxes you owe, they may serve a summons. A summons legally compels you or a third party to meet with an officer of the IRS and provide information, documents and/or testimony.
If you’re responsible for a tax liability and they serve a summons on you, you may be required to:
• Bring books and records to prepare a tax return, and/or
• Produce documents to prepare a Collection Information Statement, Form 433-A or Form 433-B.
If you can’t make your summons appointment, immediately call the number listed on your notice. If you don’t call them and don’t attend your appointment, they may sue you in federal district court to require you to comply with the summons.
(IRS Publication 594 and IRS.gov) (TTT 08/18/2020)
Topic: Levy: Seizure of Property (Part VII)
Wrongfully Seized Property – How to recover economic damages
If the IRS wrongfully seized your property, they lost or misplaced your payment, or there was a direct debit Installment Agreement processing error and you incurred bank charges, they may reimburse you for charges you paid. For more information, see Form 8546, Claim for Reimbursement of Bank Charges. If your claim is denied, you can sue the federal government for economic damages.
If the IRS intentionally or negligently didn’t follow Internal Revenue law while collecting your taxes, or you’re not the taxpayer and they wrongfully seized your property, you may be entitled to recover economic damages. Mail your written administrative claim to the attention of the Advisory Group Manager for your area at the address listed in Publication 4235, Collection Advisory Group Addresses. If you’ve filed a claim and your claim is denied, you can sue the federal government, but not the IRS employee, for economic damages.
(IRS Publication 594 and IRS.gov) (TTT 08/11/2020)
Topic: Levy: Seizure of Property (Part VI)
Information on Seized Property:
A. How to recover seized (“levied”) property that has been sold…
To recover your real estate, you (and anyone with interest in the property) may recoup it within 180 days of the sale by paying the purchaser what they paid, plus interest at 20% annually, compounded daily.
B. If your property has been seized (“levied”) to collect tax owed by someone else…
You may appeal the seizure under the Collection Appeals Program or file a claim under Internal Revenue Code section 6343(b), generally within 2 years of the seizure, or you may file a suit under Internal Revenue Code section 7426 for the return of the wrongfully seized property, generally within 2 years of the seizure.
You may also appeal the denial of the request to return the wrongfully seized property under the Collection Appeals Program. For more information, see Publication 4528, Making an Administrative Wrongful Levy Claim under Internal Revenue Code section 6343(b).
(IRS Publication 594 and IRS.gov) (TTT 08/04/2020)
Topic: Levy: Seizure of Property (Part V)
Reasons the IRS may return seized (“levied”) property
The IRS may return your seized property if:
• The seizure was premature,
• The seizure was in violation of the law,
• Returning the seized property will help their collection of your debt,
• You enter into an Installment Agreement to satisfy the liability for which the levy was made, unless the Agreement does not allow for the return of previously levied upon property.
• They did not follow IRS procedures, or
• It is in your best interest and in the best interest of the government.
The IRS may return property at any time if the property has not been sold. If they decided to return your property, but it’s already sold, they will give you the money they received from the sale. You can file a request for return of seized money or money from the sale of seized property, generally up to 9 months after the seizure.
(IRS Publication 594 and IRS.gov) (TTT 07/28/2020)
Topic: Levy: Seizure of Property (Part IV)
The IRS will “release” a levy if it was issued improperly…
The IRS will also release a levy if it was issued improperly. For example, they will release a levy if it was issued:
• Against property exempt from seizure,
• Before the IRS sent you the required notice,
• While you were in bankruptcy and an automatic stay was in effect,
• When the expenses of seizing and selling the levied property would be greater than the fair market value of the property,
• While an Installment Agreement request, Innocent Spouse Relief request, or Offer in Compromise was being considered or had been accepted and was in effect, or
• While the Office of Appeals or Tax Court was considering a collection due process case and the levy wasn’t a Disqualified Employment Tax Levy to collect employment taxes, a state refund, a jeopardy levy, or to collect the tax debt of federal contractor.
• While the Office of Appeals or Tax Court is considering an appeal of the denial of innocent spouse relief.
(IRS Publication 594 and IRS.gov) (TTT 07/21/2020)
Topic: Levy: Seizure of Property (Part III)
Reasons the IRS will “release” a levy
The Internal Revenue Code specifically provides that the IRS must release a levy if they determine that:
• You paid the amount you owe,
• The period for collection ended prior to the levy being issued,
• It will help you pay your taxes,
• You enter into an Installment Agreement and the terms of the agreement don’t allow for the levy to continue,
• The levy creates an economic hardship, meaning the IRS determined the levy prevents you from meeting basic, reasonable living expenses, or
• The value of the property is more than the amount owed and releasing the levy won’t hinder their ability to collect the amount owed.
Next week additional information on release of a levy….
(IRS Publication 594 and IRS.gov) (TTT 07/14/2020)
Topic: Levy: Seizure of Property (Part II)
How to appeal a proposed seizure (“levy”)?
Taxpayers can request a Collection Due Process hearing within 30 days from the date of their Notice of Intent to Levy and Notice of Your Right to a Hearing.
They should send their request to the address on their notice. For more information, see Form 12153, Request for a Collection Due Process or Equivalent Hearing.
At the conclusion of their hearing, the Office of Appeals will provide a determination.
The taxpayer will have 30 days after the determination to challenge it in the U.S. Tax Court.
If Collection Due Process rights aren’t available for the case, the taxpayer may have other appeal options, such as the Collection Appeals Program.
(IRS Publication 594 and IRS.gov) (TTT 07/07/2020)
Topic: Levy: Seizure of Property (Part I)
Property that can’t be seized (“levied”) by the IRS
Certain property is exempt from seizure. For example, the IRS can’t seize the following: unemployment benefits, certain annuity and pension benefits, certain service-connected disability payments, worker’s compensation, certain public assistance payments, minimum weekly exempt income, assistance under the Job Training Partnership Act, and income for court-ordered child support payments.
They also can’t seize necessary schoolbooks and clothing, undelivered mail, certain amounts worth of fuel, provisions, furniture, personal effects for a household, and certain amounts worth of books and tools for trade, business, or professions.
There are also limitations on their ability to seize a primary residence and certain business assets. Lastly, the IRS can’t seize your property unless they expect net proceeds to help pay off your tax debt.
(IRS Publication 594 and IRS.gov) (TTT 06/30/2020)