Experience dictates that IRS Revenue Officers (ROs) are programmed to issue the Final Notice of Intent to Levy pretty quickly after the case is assigned to them, usually upon first contact.
This is not the first contact by the IRS it is the first contact by the revenue officer. A decided difference, the IRS has sent out several letters prior to contact by a revenue officer. Professionally, the revenue officer should wear a sign that reads “the buck stops here.”
The goal of the revenue officer is to be ready to levy if cooperation and resolution is not forthcoming. They do not have to wait to get into position the revenue officer operates to be in position. He or she is waiting for you. It is not often that you must wait on them.
This position creates a situation where the RO is and can make aggressive overtures before the taxpayer is even given a chance to comply (at the RO level) to resolve the case. The result may be to file a Collection Due Process Appeal or request a Cap Appeal.
Otherwise, if it takes more than 30 days to resolve the case, negotiations will be obtained with the risk of levy or lien a chance too great to take for your client.
A request can be made for the RO to withdraw the Final Notice of Intent to Levy so that everyone is on equal footing to negotiate without the overhang of levy while attempting resolution. In most cases, the RO will hold the case up to 40 five days after the filing of the Collection Due Process.
If the RO cannot achieve case resolution within 90 days, then the case is expected to be sent to appeals for a hearing. Either way, it is important to preserve rights and protect property when a Final Notice of Intent to Levy is sent out.
The major drawback in the CDP is that it stops the statute from running. The time it takes the IRS to investigate the CDP, maybe one month or six months, is then added back onto the time allowed for collection of the tax. If it takes six months for them to investigate then the statute is extended by six months. The IRS wants time to fully collect during the 10 years allotted by statute; so if they have to stop for six months; then they get 10 years and six months.
Filing the Collection Due Process to stop a levy or lien, may be helpful, however; it certainly is not free.
There is a price to pay for the negotiations where time is stopped by the IRS to make case resolution. The price is time.
Alma M Scarborough: www.taxhitlady.com; taxhitlady@sbcglobal.net; 314-621-1402 .
