Questions About 1099

26 U.S.C. § 6330(e) contains a provision that is little celebrated and underutilized by persons dealing with an Internal Revenue Service levy of their bank account or pay. That subsection provides in pertinent part:

“(e)  Suspension of collections and statute of limitations
“(1) In general
“… if a hearing is requested under subsection (a)(3)(B), the levy actions which are the subject of the requested hearing…shall be suspended for the period during which such hearing, and appeals therein, are pending…”

The suspension of collection activities by timely requesting a Collection Due Process Hearing (CDPH) is a very effective method to end an IRS (Internal Revenue Service) levy on a financial institution such as a bank or credit union or paycheck. I have employed this provision to obstruct an Internal Revenue Service  levy in as little as 2 days. I recently put an observation in my shopping cart that even a dancing bear could stop an IRS (Internal Revenue Service)  levy by a well-timed request for a CDPH hearing as Congress provided in 26 U.S.C. § 6330(b)(1).

Nevertheless, a dancing bear would not be able to keep IRS (Internal Revenue Service) collection activity suspended and most likely neither would most of us. In spite of all the holdups while appeals are pending; and in spite of being able to retrieve any capital you had in the bank when the Notice of Levy showed up from the IRS (Internal Revenue Service); and despite the fact of receiving full paychecks during those delays; sooner or later, the end of the line will get here and the  IRS (Internal Revenue Service) will resume collection activities as they were before the hearing was demanded. At the point this happens the majority of people will be right back where they started; dealing with a levy by the Internal Revenue Service. It is because of this unpleasant actuality that I put up nine, no obligation videos, 4-10 minutes in length at www.irsterminator.com discussing strategies I have come up with that make keeping IRS collection activities suspended indefinitely a very real likelihood.

There are two aspects to winning a CDPH hearing: 1) Taking positive strategic action with the end being to prevail in the hearing as I discuss in the videos mentioned above; 2) Avoiding bringing up issues that would serve as grounds for you losing the hearing. Avoiding losing matters is a matter of doing a little research and reviewing what issues have been raised in the past that lost.

Rohner v. U.S., 91 A.F.T.R.2d 2003-2425 (N.D.Ohio 2003) is the Collection Due Process appeal ruling that I will address in part in this article. Rohner lost hisCDP (Collection Due Process) hearing and appealed to the Federal District Court. I was able to unearth his litigation by using the search feature at the District Court data base at www.versuslaw.com. I made an hour and forty minute video about how to use Versuslaw to do legal research and that video is offered for you to be taught online legal research too at www.bearscart.com in the “law study” category.

In the section of the Court’s decision entitled “Factual and Procedural Background” the Court recounted:

“Although Plaintiff submitted Forms 1040 to the Internal Revenue Service (IRS) along with copies of Forms W-2 indicating his wage income for the years 1996 and 1998, he reported no income on the returns and attached statements containing frivolous arguments as to why he was not liable for an income tax for those two years…With regards to the 1998 tax return, the IRS then sent Plaintiff a letter dated May 24, 1999, advising him that a frivolous return penalty of $500 under 26 U.S.C. § 6702 would be assessed against him unless he corrected his position within 30 days…Plaintiff failed to correct the Form 1040 and the IRS assessed § 6702 penalty against him on September 13, 1999, with respect to the 1998 Form 1040…The IRS also accessed Plaintiff a § 6702 penalty on November 13, 2000, with respect to the 1996 Form 1040, because he submitted a Form 1040 for tax year 1996 showing no income with an attached statement containing frivolous arguments on July 21, 2000.”

So, it appears like Rohner may have been using an early Cracking the Code stratagem; or perhaps, something taught by Irwin Schiff. He appears to be using the hearing to persuade the hearing officer to be in agreement with  his position on why he had no taxable income and to get out of paying frivolous return penalties. The IRS sent Rohner a Notice of Intent to Levy that informed him of his right to a CDPH and he asked for the hearing. After losing in the CDPH hearing, Rohner lost on appeal to the Federal District Court:

1) It is recounted in the published determination, the Court said that Rohner maintained that he had the right to make a recording of the collection due process hearing or have a court reporter transcribe the hearing. The Court held that Rohner misstated the law and held that he did not have the right to have the collection due process hearing recorded or to have a court reporter transcribe the hearing.

2) According to the published determination, the Court said that Rohner maintained that the hearing officer wouldn’t give  him a independent hearing with respect to the frivolous return penalties for each of the two different tax years. The Court held that collection due process hearings are comprised of more than simply the face to face meeting between the taxpayer and the officer. It held that written communications, telephone dialogues and face-to-face meetings all are adequate for an satisfactory hearing.

The Court ended up holding that the Internal Revenue Service’s administrative determination was to be upheld. In the videos at www.irsterminator.com I discuss how to use Rohner’s losing issues above to your own advantage. Check them out.

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