Remarkable Tactic for Abating an IRS Wage Levy
26 U.S.C. § 6330(e) includes a provision that is little celebrated and underutilized by persons facing an IRS wage levy of their bank account or paycheck. 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 very effectual technique to bring to an end an IRS levy on a financial institution such as a bank or credit union or paycheck. I’ve taken advantage of this provision to end an Internal Revenue Service wage levy in as little as two days. I recently put a note in my shopping cart that even a dancing bear could stop an IRS wage 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 money 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 long run, the end of the line will happen and the IRS (Internal Revenue Service) will resume collection activities as they were before the hearing was applied for. When this happens almost all the people will be right back where they started; staring down collection activity by the IRS. It is because of this unpleasant reality that I posted nine, free videos, 4-10 minutes long at www.irsterminator.com talking about strategies I have come up with 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 positive strategic action aimed a prevailing in the hearing as I talk about in the videos mentioned above; 2) Avoiding bringing up issues that would trigger you losing the hearing. Staying away from losing questions 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 argument that he did not receive a notice of deficiency with respect to the § 6702 frivolous return penalty was rejected as being unjustified 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 line of reasoning that he did not receive a fair-minded hearing because the IRS neglected to comply with his demands for records was declined by the Court as unsubstantiated. The Court held that Section 6330 did not provide permission for production of records or other investigative demands in connection with a CDPH (Colletions Due Process Hearing).
Rohner raised further unsuccessful issues on appeal which will serve as the basis of a different article. The Court ended up holding that the Internal Revenue Service’s administrative decision would stand as decided. Conclusions such as this one have always served me as an motivation and not as a impediment. At least a set of circumstances like this aids as a warning respecting those who have current cases coming after. To provide yourself the greatest probability of enjoying success study the 9 video recordings at www.irsterminator.com.
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