Remarkable Tactic for Abating an Internal Revenue Service Wage Levy
27th January 2010 by Tax Man No Comments26 U.S.C. § 6330(e) includes a provision that is little recognized and underutilized by persons dealing with an IRS wage 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 asking for a Collection Due Process Hearing (CDPH) is a highly useful technique to block an IRS (Internal Revenue Service) levy on a bank account or paycheck. I’ve used this provision to stop an IRS wage levy in as little as 2 days. I recently put a remark in my shopping cart that even a dancing bear could bring to a halt an IRS (Internal Revenue Service) wage levy by a timely request for a CDPH hearing as provided in 26 U.S.C. § 6330(b)(1).
Nonetheless, a dancing bear would not be able to keep Internal Revenue Service collection activity shelved and most likely neither would most of us. In spite of all the postponements while appeals are pending; and in spite of being able to retrieve whatever cash you had in the bank when the Notice of Levy arrived from the IRS; and in spite of receiving complete paychecks during those delays; eventually, the end of the line will take place and the Internal Revenue Service will resume collection activities as they were before the hearing was requested. At the point this happens almost all the people will be right back where they started off; staring down a wage levy by the IRS (Internal Revenue Service). It is because of this unsavory actuality that I published nine, free videos, 4-10 minutes long at www.irsterminator.com talking about strategies I have arrived at that make keeping IRS (Internal Revenue Service) collection activities suspended indefinitely a very real prospect.
There are two aspects to winning a CDPH hearing: 1) Taking affirmative strategies pointed at prevailing in the hearing as I talk about in the videos talked about above; 2) Avoiding bringing up issues that would cause you to lose the hearing. Avoiding losing issues is a matter of doing a little research and reviewing what issues have been raised in the past that lost.
Rohner v. U.S., 2003.NOH.0000145 (N.D.Ohio 2003) is the case that I will address in part in this article. Rohner lost his Collection Due Process hearing and appealed to the Federal District Court. I was able to find his case by searching the District Court data base at www.versuslaw.com. I made an hour and forty minute video about how to use Versuslaw to do research and that video is available for you to learn to do 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, part of what Rohner was trying to do was use the hearing 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 hearing and he requested the hearing. After losing in the CDPH hearing, Rohner lost on appeal to the Federal District Court:
1) Rohner’s contention that he did not obtain a notice of deficiency respecting the § 6702 frivolous return penalty was rejected as being without merit because there is no requirement that a notice of deficiency issue with respect to these penalties. The Court held that deficiency procedures do not apply to the assessment or collection of frivolous tax return penalties.
2) Rohner’s claim that he did not receive a impartial hearing because the the Service neglected to comply with his requests for records was declined by the Court as unjustified. The Court held that Section 6330 did not bestow authorization for production of records or other exploratory demands in association with a collections due process hearing.
Rohner brought up further unfruitful topics on appeal which will serve as the source of a different article. The Court ended up deciding that the IRS’s administrative determination did not need to be changed. Results such as this one have constantly served me as an motivation and not as a damper. At least a case like this serves up a forewarning respecting those who have current cases coming after. To present yourself the best occasion of being a winner evaluate the nine videos at www.irsterminator.com.
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