OK, now I'm really confused...

[The Observer]

As Gottago found out there is one other big difference. An equivalency hearing does not stop enforced collection as a matter of law, only as a matter of policy.

Again, perhaps. If the facts of her story are correct and there are no other facts to contradict the situation and she appealed timely on 7/31, it appears to me that somewhere along the line, her rights were violated by the revenue officer by serving and enforcing on that levy.

Right, but the ones with smarts file them through the RO so the RO doesn't levy because he didn't know that a CDP request had been filed.

But again, in the long run that would be a non-issue because once the taxpayer shows that a timely CDP was filed, the levy should be released - which is the problem in gottago's scenario.

[Kimokeo]

If you have someone saying you are not collectible, you need all levies ended and released. If IRS accepts your expenses that exceed your income, you have an economic hardship - end of levies.

If your offer is still open, your collection statute is suspended. If you don't have a good offer - end the offer process. There's no sense in adding time to the clock on a worthless offer. If you have a good offer, then you fight for it.

If appeals is suggesting not collectible -take it.

[gottago]

As previously stated, there are no current levies in place. They all occurred from mid-August until mid October of last year. The OIC was received in Memphis on 9/14 and accepted for processing 10/25. There has been no action on the OIC and the attorney states it is still pending.

The Appeals officer is stating that the "currently not collectible" status is only until the returns we filed in June are processed. We submitted 4 years and 2 have been processed and assessed (along with applicable penalties and interest). The other 2 (the ones with the huge liability from day trading that I was able to correct with the assistance some of you here are the ones that are still in processing). The Appeals officer does not know when they will be processed but is checking into it.

Attorney says that due to the amount of the liability (that will grow rapidly due to interest) that "currently not collectible" is not a solution since we will never be able to pay it off and will push for the OIC determination once the remaining 2 returns are processed and the taxes owed assessed.

Time will tell...

[Dr. Caligari]

Time will tell...

Good luck!

[gottago]

Update and question

Last week, I received 4 separate certified "determination" letters from the Appeals officer related to the CDPH which was timely requested (it even says so on the letter) back in July of 2006 related to the "Notices of Levy" that were sent by the IRS in mid-July and resulted in the levying of my checking account, loss of my job and levying of my IRA account in October of 2006. The actual hearing was held in June 2007 with the attorney and the Appeals officer.

The Appeal Officer states that "the proposed levy action is not sustained" and states that the liability is "currently not collectible" due to the fact that I was fired from my job, on unemployment and have no way to pay the liability.

Trouble is, the levies already occurred in August and October of 2006 and the IRS received all the money at that time. Is there a procedure I can do to request return of the money that was levied while the CDPH was pending since the levy action was not sustained?

It further states that the OIC filed in September of 2006 is currently under review, waiting for the processing of returns filed with the "underreporter" unit in Ogden in late June of 2007 but that it "may" be rejected since the offer does not equal the "reasonable collection potential" determined by the IRS based on my previous earnings since I do not have a job.
However, the "currently not collectible" status will remain in effect until the time I am able to pay the liability or the collection statute expires.

Attorney says he has done all he can for us in terms of the OIC and if they reject it I am SOOL and will remain uncollectible until my employment situation changes. Spouse does not make enough for us to afford any monthly payments at this time.
If the OIC is ultimately rejected and I can not find a job I am unsure what the next step is.

I just want to ask if there is a procedure to request the return of the money levied that I can do on my own since I can not afford to pay any more money for an attorney.

Thanks in advance for your input.

Gottago

[hartley]

Trouble is, the levies already occurred in August and October of 2006 and the IRS received all the money at that time. Is there a procedure I can do to request return of the money that was levied while the CDPH was pending since the levy action was not sustained?

It further states that the OIC filed in September of 2006 is currently under review, waiting for the processing of returns filed with the "underreporter" unit in Ogden in late June of 2007 but that it "may" be rejected since the offer does not equal the "reasonable collection potential" determined by the IRS based on my previous earnings since I do not have a job.
However, the "currently not collectible" status will remain in effect until the time I am able to pay the liability or the collection statute expires.

Attorney says he has done all he can for us in terms of the OIC and if they reject it I am SOOL and will remain uncollectible until my employment situation changes. Spouse does not make enough for us to afford any monthly payments at this time.
If the OIC is ultimately rejected and I can not find a job I am unsure what the next step is.

I just want to ask if there is a procedure to request the return of the money levied that I can do on my own since I can not afford to pay any more money for an attorney.

As far as asking for a return of already-levied funds, I'm not sure - I think that Appeals determination will merely ensure that a levy is stopped, not guarantee that funds already levied will be returned - after all, they have been applied to a debt that you DO owe. Bad news for you, the levy is already stopped because you no longer have a job. This wasn't my department when I worked for the IRS. Anybody know better than me?

As far as being SOOL if the OIC is rejected goes: not necessarily. If you are placed on CNC, the lien will remain in place, any future refunds will be applied to the debt, but no other collection activity will take place. Payments are not required, and any payments you DO make will not cause the CNC status to be removed. Basically, the IRS has decided that, at this time, you can't pay them, and it isn't worth their time to try to squeeze blood from a rock.

This can change if your income increases. This is based on future tax return filings.

If your income remains approximately the same, then you'll probably never hear from the IRS again, save a letter they send once a year reminding you that you owe them money but can't pay.

Once the collection statute expires, the debt will go away and the liens will release. This should, but does not always, happen automatically.

Make sure to check with the IRS to ensure that the OIC was rejected, and that your account was changed from "pending OIC" to "Currently Not Collectible" status - because an OIC pauses the statute clock, and you want it to start running again ASAP. The sooner it expires, the sooner this all goes away.

[Nikki]

At this point, it might be a good idea to contact the Advocate's Office, just to get a review of your situation and a clear, English explanation of where things stand and where they will / might go.

[Bud Dickman]

The IRA levy was dated 8/22/07 but was received 9/18/07 by the custodian (per time date stamp) We only received a copy of this levy on 9/24/07.


I think there are more facts to this case than have been presented by gottago. A Revenue Officer has to go through three layers of management (Area Director of Collection) in order to levy an IRA account. The levy is going to be highly scrutinized, and I do not think it would be approved in any kind of appeal situation unless special circumstances were involved.

[gottago]

The only facts that I am aware of are listed. I think the levy on the IRA occurred once the RO realized I was fired from my job, had hired an attorney and submitted an OIC. The levy was received by the custodian of the IRA 4 days after the OIC was received in Memphis and cashed out 29 days later via a demand for payment faxed by the RO the same day she told the attorney that she "needed to keep the IRA account frozen" until the amended returns were processed. The RO was fully aware that the CDPH had been timely requested, that I was unemployed and that an OIC had been submitted. She chose to ignore those facts.

The worst part of the levy of the IRA was that it increased dramatically the amount we owed for 2006 and made it impossible to pay (we did have a plan to do this), resulting in more liens filed and more liability to compromise. While I totally understand that we majorly f*cked up but I do not think it is appropriate for the IRS to actually make our situation worse. It would be different if the taking of the IRA funds made any appreciable difference in the amount we owe or decreased the liability in any meaningful manner.

[Quixote]

The IRA levy was dated 8/22/07 but was received 9/18/07 by the custodian (per time date stamp) We only received a copy of this levy on 9/24/07.

Trouble is, the levies already occurred in August and October of 2006 and the IRS received all the money at that time.

Which of those contradictory statements is correct?

The levy is going to be highly scrutinized, and I do not think it would be approved in any kind of appeal situation unless special circumstances were involved.

IF a timely CDP hearing request was made for the period in question and remains unresolved (other than an appeal to the Tax Court), no levy can legally occur regardless of the circumstances.

[Bud Dickman]

iF a timely CDP hearing request was made for the period in question and remains unresolved (other than an appeal to the Tax Court), no levy can legally occur regardless of the circumstances.


That is why this case scenario does not make sense, flagrant disregard of taxpayer rights would be grounds for removal of an IRS employee issuing levy.

[gottago]

Which of those contradictory statements is correct?

In mid-July Notices of Levy were send to my bank and the company I worked for. Contents of bank account were sent to IRS in mid-August following the 21 day holding period. Company terminated me August 9 so no levy actually occurred.

Notice of Levy sent to the IRA custodian was DATED August 28 but RECEIVED by the custodian September 18 (per time/date stamp on the NOL) and I was notified of the levy by the custodian via certified mail on September 21. OIC was received by the IRS at the Memphis COIC office September 14.

On September 24 I received via regular mail a Notice of Levy from the RO similar to the one received by the custodian by itself in an envelope. I say similar because the amounts and dates were the same but the signatures were clearly different than the one sent to the custodian. It was signed by "Ellen Dolby" as the area director and the RO put some type of illegible pen marks in the box indicating that it attached to the IRA funds.

The custodian, my attorney and the Taxpayer Advocate all contacted the RO. She stated the IRA account was "frozen" until the amended returns submitted were processed. She last spoke to the Taxpayer Advocate and my attorney on October 16 and THAT SAME DAY she faxed a "Final Demand for Payment" to the custodian and the account was liquidated with the funds sent to her that day.

On October 25 the OIC was accepted for processing (6 weeks after received in Memphis).

In late December we were contacted by an Appeals officer in Albuquerque regarding the CDPH request received by the IRS
on 8/2/2006 related to the multiple "Notices of Levy". After being bounced around to Kansas City and Louisville the CDPH wound up in Houston with the Appeals officer who held the hearing in June of 2007. The determinations related to that CDPH are what I just received last week.

IF a timely CDP hearing request was made for the period in question and remains unresolved (other than an appeal to the Tax Court), no levy can legally occur regardless of the circumstances

But it did and now the Appeals officer has determined the "proposed levy is not sustained" even though it already occurred over a year ago

[gottago]

That is why this case scenario does not make sense, flagrant disregard of taxpayer rights would be grounds for removal of an IRS employee issuing levy.

I did submit a 14 page complaint (with copies of all documents) to the TIGTA office in October 2006 related to the IRA levy, CDPH and OIC specifically regarding the actions of the RO and why I felt they were inappropriate and disregarded IRS' own procedures.

The only thing that (to my knowledge) occurred is that the RO now corresponds with us from a different office in a different city. She is 61 so I would imagine firing her would be next to impossible and, to be honest, I do not think serious consideration is given to any complaint made by "tax protestors"

Thanks everyone for your input.

Gottago

[Bud Dickman]

Unfortunately, tax protestors have the same rights as any other taxpayer. Age of an employee makes no difference in flagrant disregard of your rights, they would be out the door.

[Quixote]

Unfortunately, tax protestors have the same rights as any other taxpayer. Age of an employee makes no difference in flagrant disregard of your rights, they would be out the door.

I don't see that anyone's rights were violated. The CDP hearing requests were all filed late, so the RO was under no obligation to withhold collection while the equivalency hearings were pending. The IRA levy, issued after Gottago had requested equivalency hearings, was probably an abuse of discretion, but not a 1203 violation. It would appear that the case advocate did not get the Local Taxpayer Advocate (LTA) involved. The LTAs I am familiar with would not have appreciated the RO lying to one of their case advocates.

[gottago]

The CDPH requests related to the multiple notices of levy were not filed late.

The notices of levy were sent to the levy sources on 7/18/2006 and copies were sent to us certified mail and received 7/21/2006. The CDPH request was mailed certified mail 7/31/2006 and received by the IRS 8/2/2006. In the letter of determination, the Appeals officer states that "the CDPH request was timely received on 8/2/2006 regarding the proposed levy action dated 7/18/2006". There were never at any other time any Notices of Levy issued or sent to us or anyone else. The requests WERE NOT filed late.

Appeals did say that one of the CDPH requests we filed earlier in 2006 in response to a "Notice of Federal Tax Lien" that was filed was received by the IRS one day after the deadline and therefore an equivalency hearing related to that lien was held and the filing of the lien was upheld by Appeals, which I understand.

Again, I do think that our history of noncompliance is basically what allowed this to happen. I do not feel that the Taxpayer Advocate seriously addresses a request for assistance from a tax protestor. They are there to help people who make "honest" mistakes, not pond scum like us.

During our summons appearance, the RO said to my husband at one point "Your wife is going to be the one who is going to pay" and she was right. I have this on audio tape. Good for her!

[Quixote]

The notices of levy were sent to the levy sources on 7/18/2006 and copies were sent to us certified mail and received 7/21/2006. The CDPH request was mailed certified mail 7/31/2006 and received by the IRS 8/2/2006.

And, unless the levies were sent in violation of IRC §6330(a), the deadline for filing the CDPH requests was on or before 7/17/2006. CDPH requests sent in response to a levy, as opposed to a notice of intent to levy, are, absent a procedural error on the part of the IRS, always late, because the levy cannot legally be sent until the CDPH request deadline has passed.

In the letter of determination, the Appeals officer states that "the CDPH request was timely received on 8/2/2006 regarding the proposed levy action dated 7/18/2006".

So the settlement officer was confused about what was sent on 7/18/2006, she was referring to a different tax year, one for which a proposed levy notice was mailed on 7/18/2006, or you have misstated the facts.

[The Observer]

And, unless the levies were sent in violation of IRC §6330(a), the deadline for filing the CDPH requests was on or before 7/17/2006. CDPH requests sent in response to a levy, as opposed to a notice of intent to levy, are, absent a procedural error on the part of the IRS, always late, because the levy cannot legally be sent until the CDPH request deadline has passed.

And I think this is wherein the confusion/contradictions in goddess' story originate. Many people think that by responding to an issued levy they are actually timely in filing a CDP request. In actuality in order for a timely request to be made, the taxpayer has to respond to the 30-day notice of intent to levy rather than the levy issuance itself. Since it is apparent that goddess' CDP request became a equivalent hearing, there is no legal requirement for the IRS to release the levy prior to the appeal hearing.

[gottago]

Notice of Levy. You may appeal before or after
the IRS places a levy on your wages, bank account
or other property. You may also have additional
Collection Due Process appeal rights. See the
preceding information regarding Hearing Available
under Collection Due Process. You may also appeal
the denial by the IRS of your request to have levied
property returned to you.

This is taken directly from the IRS site. In response to the "Final Notice" letters a CDPH request was also submitted and was not granted due to the frivilous nature of the documents accompanying the request. However, until the NOTICE OF LEVY was sent first to the levy sources and then to us there would be no way to appeal this proposed action.

The other NOTICE OF LEVY was not received by the custodian of my IRA until September 18 which was AFTER the OIC was submitted and after the Revenue Officer was contacted by myself, my attorney and the taxpayer advocate on several occasions.

However, it is in the past. I have been advised on how to request the return of my property that was levied that appeals subsequently stated was not sustained or supported by the facts of the situation at the time. I am sure it is an exercise in futility but since there is nothing to levy now I have nothing to lose. I guess currently not collectible means they can't take my house or car at the present time. I probably won't make it to retirement age anyway so I really do not care.

Thank you for your input. This time it is for real.

Gottago

[The Observer]

The other thing to keep in mind here is that the IRA funds were never going to escape the OIC process. If the levy had never been issued, the IRS would have still demanded that your tendered offer be increased to include the offer funds. If you had liquidated the IRA prior to the OIC being submitted, the offer specialist would have still requested that your offer be increased by the amount of the IRA under the theory that the assets were dissipated in order to avoid having to pay them over.

In short, the best thing happened - the IRS levied the IRA account. Not only did you get your tax liability decreased, you also received the benefit of reducing the future interest (and possibly penalty) accruals and you also were elgible to file for the waiver of the 10% early withdrawal penalty on IRA accounts.