Earned Income Tax Credit | Secrets to Abating an IRS Levy

Secrets to Abating an IRS Levy

26 U.S.C. § 6330(e) includes a provision that is little acknowledged and underutilized by persons dealing with an Federal tax 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 tactic to bring to a halt an IRS levy on a bank account or paycheck. I have made use of this provision to bring to a halt an Internal Revenue Service  levy in as little as two days. I recently put a remark in my shopping cart that even a dancing bear could bring to a halt an Internal Revenue Service  levy by a timely request for a CDPH hearing as Congress provided in 26 U.S.C. § 6330(b)(1).

Conversely, a dancing bear would not be able to keep IRS collection activity put off 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 showed up from the Internal Revenue Service; and despite the fact of receiving complete paychecks during those delays; in the end, the end of the line will arrive and the  IRS (Internal Revenue Service) will resume collection activities as they were before the hearing was asked for. At the point this happens the majority of people will be right back where they started; dealing with a levy by the IRS (Internal Revenue Service). It is because of this unpleasant reality that I put up nine, no obligation videos, 4-10 minutes long at www.irsterminator.com discussing strategies I have arrived at that make keeping IRS collection activities suspended indefinitely a very real likelihood.

There are two aspects to winning a CDPH hearing: 1) Taking affirmative strategies with the object being too prevail in the hearing as I discuss in the videos referenced above; 2) Avoiding bringing up issues that would cause you to lose the hearing. Avoiding losing issues is a matter of doing a little study 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 claim  that he did not receive  a notice of deficiency respecting the § 6702 frivolous return penalty was declined as being groundless as there is no requirement that a notice of deficiency be issued 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 non-discriminatory hearing because the IRS neglected to comply with his requests for documents was refused by the Court as unsubstantiated. The Court held that Section 6330 did not give permission for production of documents or other investigative demands in connection with a collections due process hearing.

Rohner mentioned additional unsuccessful matters on appeal which will serve as the basis of a different article. The Court ended up holding that the Internal Revenue Service’s administrative determination was to be upheld. Decisions such as this one have always served me as an inspiration and not as a deterrent. At least a case like this serves up a forewarning with regard to those who have current cases coming after. To furnish yourself the greatest chance of triumphing examine the nine videos at www.irsterminator.com.

Follow me on Twitter.com/legalbear See you there. :-)

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