LEIN VS LEVY NEED HELP

[TAXMAN]

Ok facts per lien: kind of tax   1040

                             tax period ending  12-31-2007

                             Date of assessment:   11-03-2008

                             last date for refilling: 12-03-2018

                            amount of lien 35k

facts of levy      kind of tax  income

                            tax period 12-31-2007

                           unpaid balance 38k

TP in all the years has never extended nor did an offer. TP has kept all returns current including payments and now is caught up on some other old years.

Question being Is this collectible and how do we get the levy stopped?

Thanks for help.

 

 

[Jerry W]

On what type of income or asset was the levy made?

[TAXMAN]

On his paycheck. I thought there was a 10 year statue?

[Lee B]

If the IRS levies (seizes) your wages, part of your wages will be sent to the IRS each pay period until:

• You make other arrangements to pay your overdue taxes,
• The amount of overdue taxes you owe is paid, or
• The levy is released
•  
• There is no time limit on levies. You must be thinking of something else.
• As far getting the levy released, it just depends on facts and circumstances and following IRS procedures.

[TAXMAN]

I must be missing something. If a tax year balance due is uncollectable due to the 10 year statue, how can they get a levy on your pay to pay for a tax that is uncollectible. Where am I missing the boat?

[Lee B]

A tax levy on wages is a continuing levy until such time as the entire tax debt is paid in full,

assuming that the levy was in place before the 10 year statue expired.

[TAXMAN]

Levy was dated 4-23-2019. Does this make a difference?

[Lee B]

Then either the IRS has made a mistake or there is something about this situation that you don't know.

[jklcpa]

The collection period is generally 10 years but can be longer if the collection process was suspended during that time.  Reasons for suspension include if the IRS is considering an offer in compromise or an installment agreement request, if the taxpayer filed for bankruptcy, if taxpayer requested relief as innocent spouse, or lived outside of the U.S. continuously for at least 6 months.

  https://www.nolo.com/legal-encyclopedia/time-limits-irs-collections.html

[TAXMAN]

TP has not done any of those things referred to in the link. TP said he has NOT gotten anything since the auditor put his account on uncollectible status 10 years ago. The levy sent to the payer came from ACS regular mail and no previous mail has been received. Your suggestions. It seems strange that this letter came uncertified. With what will be left to tp he will not be able to pay his estimates federal and state, nor make his house payment, nor his health insurance. TP even would not be left with enough to work to earn his income. TP is a self employed Real estate appraiser and travel is quite extensive. Just some added facts

[Max W]

First, you have to find out what is going on here, as 2007 should have passed the statue date  (CSED)10 years and a day from the last assessment and any liens should have been removed  within 30 days after that.

 The first step is to call the Practitioner Priority Line (PPL)  ( you will need form 2848, or, if you are not an EA or CPA, form 8821.)  Then call PPL and tell them what your client is experiencing.  It is possible the 2007 account was improperly flagged to expire.  PPL can usually fix those things.   I just had something similar happen with one of my clients.  Four years were wrongly flagged to have form 940 filed.  PPL fixed that.    PPL can also tell you whether the appropriate collection letters were sent to your client.   You should also ask them to fax you the Account Transcript for 2007.

It may take time for the flag removal to work its way through the system, so I would prepare form 433F and call ACS.  The form is a Collections Statement.  An installment Arrangement can be set up depending on what the disposable income is.    Or, it could be  Non-Collectiable again( CNC).  You need to be an EA, or CPA to do this.  

If the appropriate collection letters were not sent out,  (CP503, CP 504 and LT11 - Final Notice) you can file a CDP (Collection Due Process) request, form 12153.  However, the main reason taxpayers do not receive IRS letter is that they have moved and have failed to file form 8822, change of address.  

If all else fails, the last resort is the Taxpayer Advocate Service, but when you call them you must tell them that the matter is URGENT and they will respond in 48 hours, otherwise it will be several weeks.

[DANRVAN]

14 hours ago, TAXMAN said:

Levy was dated 4-23-2019. Does this make a difference?

Looks to me like the 10 SOL started on 11/3/08 and from what you are saying there were no conditions that would have extended the SOL.

 

12 hours ago, TAXMAN said:

TP has not done any of those things referred to in the link. TP said he has NOT gotten anything since the auditor put his account on uncollectible status 10 years ago. The

 

"Currently Not Collectible" status (CNC) does not suspend or extend SOL.

I would respond to the letter and refer to the SOL expiration date under section 6502  

Also point out that you are not aware of any factors that would have suspended or extended the SOL per IRM 5.1.19.

[Catherine]

TaxHelpSoftware (Roger Nemeth's company) has a free trial and *excellent* CSED calculations.  Canopy is free for transcripts but not as good on CSED.  Try one of t hem to see what the exact date history on this year is, if PPL leaves anything un-addressed.

[Max W]

11 hours ago, DANRVAN said:

I would respond to the letter and refer to the SOL expiration date under section 6502  

This has to be done by phone and immediately.  The client is having 85% of his paycheck garnished each time.  Responding to IRS letters takes 90 days to get a reply..

When I get a case like this, I call and get a 60 day full pay hold. That lifts the levy immediately and gives you time to resolve the issue.

[DANRVAN]

12 hours ago, Max W said:

The client is having 85% of his paycheck garnished each time

I did not catch that part.

[Max W]

20 minutes ago, DANRVAN said:

I did not catch that part.

That is an approximation. Unless the client is in an installment agreement, IRS levies the entire paycheck, but exempts a certainamount according to filing status and number of dependents claimed.xample, a single person with no dependents would be left with $234.62 a week.

https://www.irs.gov/pub/irs-pdf/p1494.pdf

[DANRVAN]

What I really did not catch was the need for immediate action vs long term resolution, which is beyond PPL.

[Max W]

PPL might be able to resolve it immediately, if the year is improperly flagged, assuming the CSED date has passed.  If not, then a call to collections will have to be made.   

A tip:  If a  levy release is required,  do not let the IRS mail it out.  Provide them with the fax number of the payroll dep't. and tell them it is necessary to fax it because payroll cut off is in 2 working days and the levy is causing extreme hardship.