Little Known Statute for Bocking an Internal Revenue Service Wage Levy
26 U.S.C. § 6330(e) includes a provision that is little known and underutilized by persons facing off with an Internal Revenue Service 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 requesting a Collection Due Process Hearing (CDPH) is a very effectual approach to bring to a halt an Internal Revenue Service levy on a financial institution such as a bank or credit union or paycheck. I've drawn on this provision to bring to a standstill an Internal Revenue Service wage levy in as little as two days. A short time ago I put a note in my shopping cart that even a dancing bear could bring to a halt an IRS (Internal Revenue Service) wage levy by a well-timed request for a CDPH hearing as provided in 26 U.S.C. § 6330(b)(1).
Nevertheless, a dancing bear would not be able to keep Internal Revenue Service collection activity put on hold 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 funds you had in the bank when the Notice of Levy arrived from the IRS; and despite the fact of receiving complete paychecks during those delays; in the end, the end of the line will arrive and the Internal Revenue Service will move forward with collection activities as they were before the hearing was applied for. At the point this happens most people will be right back where they started; dealing with a wage levy by the Internal Revenue Service. It is because of this unsavory reality that I posted nine, no obligation videos, 4-10 minutes in length at www.irsterminator.com discussing strategies I have arrived at that make keeping IRS collection activities suspended indefinitely a very real possibility.
There are two aspects to winning a CDPH hearing: 1) Taking positive strategic action 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. Sidesteping losing matters 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 line of reasoning that he did not obtain a notice of deficiency with respect to the § 6702 frivolous return penalty was refused as being unfounded for the reason that there is no condition 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 adequate hearing because the hearing officer failed to comply with his requests for records was refused by the Court as without foundation. The Court held that Section 6330 did not afford permission for production of records or other investigative demands in association with a CDPH hearing.
Rohner mentioned additional unfruitful issues on appeal which will serve as the basis of another article. The Court ended up holding that the IRS's administrative decision would stand as decided. Conclusions such as this one have always served me as an motivation and not as a deterrent. At least a case like this serves as a forewarning respecting those who have current cases coming after. To furnish yourself the greatest chance of coming out victorious make a study of the 9 videos at www.irsterminator.com.
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Tags: block, Due Process Hearing, frivolous return penalties, garnishment, Internal Revenue Service, IRS Collection, IRS wage levy, levies, stop