If You Want to Fight The IRS You Gotta Play by the Rules

Posted on July 31, 2020

If you owe money to the IRS, the IRS has a number of tools in the toolbox to take your wages, money in the bank or assets, such as your car or home to take away from you by force if you do not come to the table with a reasonable proposal. If you don’t offer a reasonable proposal, then the IRS has no choice but to take your income and assets by force, usually via a levy on your wages or bank account. If the IRS gives you notice that it intends to serve a levy, under the law you have the ability to file an Appeal of the IRS’ decision in this regard. If you do file an Appeal, your case then goes before a Settlement Officer who will hear your Appeal and your proposal to satisfy your liability due to the IRS. In a recent Tax Court case, the IRS issued a Notice of Intent to Levy against a husband and wife taxpayer because they owed money to the IRS and did not make a proposal to settle their liability with the IRS. In response to the Notice of Intent to Levy, the husband and wife filed an Appeal. As expected, the case was then assigned to a Settlement Officer to hear the taxpayers’ Appeal. The Settlement Officer then scheduled a telephone Collection Due Process Hearing to hear the taxpayers’ Appeal. The Settlement Officer left two voicemail messages for the taxpayers and also sent a “Last Chance” letter granting the taxpayers one final opportunity to provide the supporting financial information to support their Appeal. Because the Settlement Officer did not hear from the taxpayers, the Settlement Officer sustained the IRS’ Notice of Intent to Levy.

The taxpayers then filed a Petition in the United States Tax Court alleging abusive discretion by the IRS. The Settlement Officer in sustaining the Notice of Intent to Levy. The Tax Court held for the IRS stating that the taxpayers failed to make a proposal for a collection alternative to settle their liability with the IRS, that the Settlement Officer was not required to make one for them, that they failed to provide the financial information needed and failed to respond to the two telephone messages or the “Last Chance” letter. The Tax Court held in favor of the IRS and stated that there was no abuse of discretion. If you owe money to the IRS you need to play by the rules if you want to achieve a successful resolution on your behalf with the IRS. If you do not meet deadlines and do not make reasonable proposals in a timely fashion, the IRS will have no alternative but to take your income and assets by force.

If you owe money to the IRS, give us a call, we can help!