United States: IRS Found To Be 'Mostly Compliant' When Issuing Levies
29 August 2013
Posted by: Author: Mike Godfrey
Author: Mike Godfrey
In its annual audit of whether the United States Internal Revenue Service (IRS) has complied with its legal requirement to notify taxpayers prior to issuing levies, the Treasury Inspector General for Tax Administration (TIGTA) has determined that it is protecting most taxpayers' rights.
It was explained that, when taxpayers do not pay delinquent taxes, the IRS has the authority to work directly with financial institutions and other third parties to seize taxpayers' assets. This action is commonly referred to as a "levy."
The IRS Restructuring and Reform Act of 1998 requires the IRS to notify taxpayers of the intent to levy at least 30 calendar days before initiating any levy action, to give taxpayers an opportunity to appeal the proposed levy. Taxpayers' rights are potentially violated if they are not notified within the 30-day period and a levy is issued.
TIGTA found that the IRS is protecting most taxpayers' rights when issuing both systemically generated and manually prepared levies. It determined that controls were effective to ensure that taxpayers were given notice of their appeal rights at least 30 calendar days prior to the issuance of the levies, except for a few systemic levies under its Integrated Collection System (ICS) with additional tax assessments, in which a new notice of intent to levy was not sent prior to issuing the levies.
TIGTA therefore recommended that the IRS determine the feasibility of updating its systemic ICS programming to prevent levies from being issued on modules in which a new notice of intent to levy has not been sent after there has been an additional assessment. The IRS agreed with the recommendation.