It is very possible to stop the IRS by the filing of a valid offer in compromise. Call us today for four more details and speak to a true South Florida tax firm that specialized in the filing of offering compromise.
We know the system, I am a former IRS agent revenue officer who taught the offer in compromise program while employed at the South Florida IRS offices.
Withholding Collection
1. If a taxpayer who is currently paying a tax liability through an installment agreement submits an offer, see IRM 5.8.4 for additional guidance.
2.For offers pending on or after December 31, 1999, collection by levy on property owned by the offer taxpayer is prohibited while the offer is pending unless collection is in jeopardy.
3The term jeopardy is defined in Policy Statement P-4-88. Collection is not considered to be in jeopardy because an undisclosed asset was discovered during the investigation.
4.Upon receiving information that a jeopardy levy has been approved, contact the employee issuing the levy. If it is agreed that the offer was filed to hinder or delay collection, follow procedures in IRM 5.8.4 (Solely to Delay) to return the offer.
5. The prohibition on levy does not require release of a levy that was served prior to the offer submission. The taxpayer’s circumstances should be considered when making a determination to release a levy or keep it in place while the offer is pending.
Note:
Collection by levy is not prohibited (and the collection statute is not suspended) if the taxpayer has filed a written notice waiving the restrictions on levy. However, if the taxpayer submitted the Form 656 altering any of the provisions of Form 656, Section V, the offer should be immediately deemed a processable return based on an altered Form 656.
6.While an offer is pending there is no prohibition on filing notices of federal tax lien. See IRM 5.8.4 (Notice of Federal Tax Lien Filing) for a discussion of filing a notice of federal tax lien while an offer is pending.
7. The Form 656 states the Service may file suit or levy to collect the original amount of the liability if the taxpayer defaults the terms or conditions of an accepted offer. Even though the Form 656 states the Service may levy without notification, IRC Section 6331 requires the Service to provide notice to the taxpayer before a levy is made on the taxpayer’s property.
8.All collection action must be suspended when a taxpayer is identified as being located in a Combat Zone (CZ) area. This action includes filing of a Notice of Federal Tax Lien. See IRM 5.19.1.4.10.4, Combat Zone Freeze Codes, for additional information.
