The Internal Revenue Service did not always issue a notice of its intent to issue a levy on taxpayer assets, according to a new report by TIGTA.
The report, from the Treasury Inspector General for Tax Administration, reviewed a statistical sample of 30 Automated Collection System taxpayers with additional assessments included in the systemic and manual levies and determined that 27 of the taxpayers (or 90 percent of them) did not receive a new notice of intent to levy after an additional assessment was made on a tax period listed on the levy.
IRS management told TIGTA they have since made computer programming changes to correct this problem. This is always the story, always!
A review of a statistical sample of 30 Integrated Collection System taxpayers with additional assessments included in the systemic levies determined that there were 18 taxpayers (or 60 percent) who did not receive a new notice of intent to levy after an additional assessment was made on a tax period listed on the levy.
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 law requires the IRS to notify taxpayers at least 30 calendar days prior to the issuance of a levy.
TIGTA is responsible for annually determining whether the IRS complied with the IRS Restructuring and Reform Act of 1998 requirement to notify taxpayers prior to issuing levies.
The overall objective of its review was to determine whether the IRS has complied with the legal requirement to timely notify taxpayers prior to issuing levies per Internal Revenue Code Section 6330, Notice and Opportunity for Hearing Before Levy.
The report found that the IRS is generally protecting taxpayers’ rights when issuing systemic and manual levies in cases for which additional assessments were not included in the levy.
TIGTA reviewed statistical samples of systemic and manual levies issued by the Automated Collection System and the Integrated Collection System and determined that controls ensured that taxpayers were given notice of their appeal rights at least 30 calendar days prior to the issuance of the levies.
TIGTA recommended that the IRS issue interim guidance and retrain revenue officers to exclude from levies additional assessments for which taxpayers have not been given 30 calendar days’ notice.
