Our Firm advocates for Clients facing tax issues – including those with the IRS. With the Government Shutdown resulting in the closing of the IRS, we have encountered multiple instances of what appears to be violations of our Client’s rights as a Taxpayer.
The Taxpayer Bill of Rights was enacted to ensure policies and procedures are followed by the IRS, including collection taken against a Taxpayer such as the issuance of liens and levies. For example, the IRS is required, by Statute, to provide a 30 day notice before levying a bank account. Furthermore, the Taxpayer has the right to appeal levy action or initiate the assistance of Taxpayer Advocates to stop or reverse a levy that was incorrectly issued or is in violation of Taxpayer’s rights.
The IRS initially stated that they would not be sending out levies or liens during the Government Shutdown – whether manually or computer generated. While the IRS has furloughed thousands of human auditors and collectors (effectively shutting down all call and service centers) their computers have been hard at work. The IRS has stated that this is necessary to safeguard Taxpayer data.
Although the extent of consequences from these computer generated enforcement actions are unclear, such are causing undue hardship on Taxpayers. The automated system serves 3.7 million levies on third parties (such as banks) each year. Once a levy is placed on a Taxpayer’s bank account, the funds are frozen for 21 day before the bank turns it over to the Government.
During that 21 day period, Taxpayers are provided the right to appeal levies imposed by error or those endangering Taxpayer’s lives, property and livelihood. However, without human safeguards overlooking the collection actions of the IRS, Taxpayers are being deprived of crucial avenues to respond and reverse levy action.
Sometimes, a levy might be the result of a systematic error. A correctly instituted levy might have unintended consequences. For example, a levy may result in a Taxpayer’s inability to buy medication for an ongoing, life-threatening medical condition. Alternatively, a levy on a Taxpayer’s business bank account may prevent the business from paying their employees or continue the operation of their business. These type of scenarios highlight why the Taxpayer Bill of Rights were created.
If you or your business are experiencing hardships stemming from the IRS Shutdown, please contact our office immediately for a FREE consultation with one of our attorneys.