Author Topic: Clawing back levy  (Read 597 times)

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Bubbles

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Clawing back levy
« on: April 20, 2017 08:59:55 PM »
OIC submitted by attorney.

IRS agent agreed not to levy bank account while OIC pending.

New requirement requiring additional signature on OIC.

Updated OIC delivered on time by attorney's currier.

Attorney has signed affidavit from currier that updated OIC was delivered on time to IRS office.

A few days later, bank account emptied.

IRS agent claimed she didn't have updated OIC on her desk by close of business on specified date.

Attorney protested to IRS agent.

No dice.

Attorney then protested to IRS agent's supervisor.

No dice.

Attorney says the money lost in the levy is gone, and cannot be credited to the OIC.

I find this intolerable.

Suggestions?
« Last Edit: April 20, 2017 09:21:23 PM by Bubbles »

BellEbutton

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Re: Clawing back levy
« Reply #1 on: April 20, 2017 09:18:15 PM »
You can appeal an OIC if it's rejected.  However, since your offer wasn't rejected, your attorney will have to find another route.  Let him handle it.

Flyingifr

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Re: Clawing back levy
« Reply #2 on: April 20, 2017 09:23:30 PM »
OIC submitted by attorney.

IRS agent agreed not to levy bank account while OIC pending.This isn't an agreement, it is law.

New requirement requiring additional signature on OIC. Nothing new about it

Updated OIC delivered on time by attorney's currier.Mailbox Rule - date mailed is date received. OIC's are to be sent to COIC in either Holtsville NY or Memphis TN depending on where taxpayer lives.

Attorney has signed affidavit from currier that OIC was delivered on time to IRS office.

A few days later, bank account emptied.

IRS agent claimed she didn't have updated OIC on her desk by close of business on specified date.

Attorney protested to IRS agent.

No dice.

Attorney then protested to IRS agent's supervisor.

No dice.

Attorney says the money lost in the levy is gone, and cannot be credited to the OIC.This is not correct. The LAW prohibits ANY collection action while an OIC is pending. IRS cannot keep money levied against while OIC is pending. That is the law.

I find this intolerable.

Suggestions?

I think the attorney is a real newbie in doing OICs. I have been doing them for 25 years and I have never had something like this happen. Either the attorney is a rookie and made a rookie mistake (not sending the Revenue Officer a copy of the Offer) or there is some real bad blood between the taxpayer and the Revenue Officer. I mean, it seems we are talking a matter of days here. I had a RO levy a client's paycheck, but the client had been stalling ME for 3 months and when the RO did it, I called him and THANKED him because that got the client's attention. Things I had been asking the client to provide me with for moths suddenly appeared within 2 days. The RO released the levy immediately.

If I were your attorney I would be contacting the IRS District Director and asking why his personnel are violating Taxpayer Bill of Rights 3 and the Internal Revenue Manual

Internal Revenue Manual Section 5.8.1.10  (01-01-2016)

Quote
Withholding Collection

    For offers pending on or after December 31, 1999, collection by levy on property owned by the offer taxpayer is prohibited while the offer is pending unless collection is in jeopardy and for 30 days thereafter if the offer is rejected. If the taxpayer appeals the rejection of the offer, levy is also prohibited while the appeal is pending.

    The term jeopardy is defined in Policy Statement P-4-88. Collection is not considered to be in jeopardy because an undisclosed asset was discovered during the investigation. See IRM 1.2.13.1.27, Policy Statement 488.

    Upon receiving information that a jeopardy levy has been approved, contact the employee issuing the levy. If it is agreed that the offer was filed to hinder or delay collection, follow procedures in IRM 5.8.4 (Solely to Delay) to return the offer.

    The prohibition on levy does not require release of a levy that was served prior to the offer submission. The taxpayer's circumstances should be considered when making a determination to release a levy or keep it in place while the offer is pending.
   
Note: Collection by levy is not prohibited (and the collection statute is not suspended) if the taxpayer has filed a written notice waiving the restrictions on levy. However, if the taxpayer submitted the Form 656 altering any of the provisions of Form 656, Section 8, the offer should be immediately deemed a processable return based on an altered Form 656.

    While an offer is pending there is no prohibition on filing Notices of Federal Tax Lien. See IRM 5.8.4.13, Notice of Federal Tax Lien Filing, for a discussion of filing a Notice of Federal Tax Lien (NFTL) while an offer is pending. Unless a jeopardy situation exists, a request for Notice of Federal Tax Lien will usually not be made until a final determination has been made on the offer.
    Note:

    If SRP/MFT 35 or the mirrored SRP/MFT 65 liabilities were included in the OIC, those liabilities for the related periods will not be included in the NFTL.

    All collection action must be suspended when a taxpayer is identified as being located in a Combat Zone (CZ) area. This action includes filing of a Notice of Federal Tax Lien. See IRM 5.8.3 for Combat Zone processing and IRM 5.19.10.6.3 Combat Zone Freeze Codes, for additional information.
« Last Edit: April 20, 2017 09:34:11 PM by Flyingifr »
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Debtors Exams are the perfect place for us Senior Citizens to show off our recently acquired Alzheimers.

Founder of the Credit Terrorist Training Camp (Debtorboards)

Bubbles

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Re: Clawing back levy
« Reply #3 on: April 21, 2017 05:45:24 AM »
Thank you Flyingifr.

I think the path of the OIC was supposed to be from attorney to local IRS agent and then on to Memphis Tennessee. Is that correct? Obviously, a critical point.

After receiving electronically signed OIC from attorney, local IRS agent insisted on physical signatures. A very short time was provided to make the change, and the deadline was a Friday. OIC was physically signed at attorney's office that Friday, and was then sent by currier to local IRS agent the same day. Currier delivered physically signed OIC to local IRS office before close of business Friday. Local IRS agent claimed she didn't see the physically signed OIC that Friday.

Some uncertainty as to when the order for bank levy was given. But the bank did contact me Monday about the levy. So at the latest the order was given Monday.

Flyingifr

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Re: Clawing back levy
« Reply #4 on: April 21, 2017 01:29:05 PM »
Thank you Flyingifr.

I think the path of the OIC was supposed to be from attorney to local IRS agent and then on to Memphis Tennessee. Is that correct? Obviously, a critical point.

After receiving electronically signed OIC from attorney, local IRS agent insisted on physical signatures. A very short time was provided to make the change, and the deadline was a Friday. OIC was physically signed at attorney's office that Friday, and was then sent by currier to local IRS agent the same day. Currier delivered physically signed OIC to local IRS office before close of business Friday. Local IRS agent claimed she didn't see the physically signed OIC that Friday.

Some uncertainty as to when the order for bank levy was given. But the bank did contact me Monday about the levy. So at the latest the order was given Monday.

When dealing with the IRS it is always best to "read the instructions". OICs are to be filed with COIC in either Holtsville or Memphis. If a RO wants a copy I will send a copy. Physical ink signatures have ALWAYS been a requirement. Nowhere does it say that electronic signatures are allowed or acceptable. The IRS agent is being unreasonable - just because she didn't physically see a copy on Friday doesn't mean it wasn't there in the office. Everyone in the IRS has a boss and I would be climbing that totem pole right now, especially if the levy presents a clear and present hardship that the 433A shows.
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Debtors Exams are the perfect place for us Senior Citizens to show off our recently acquired Alzheimers.

Founder of the Credit Terrorist Training Camp (Debtorboards)

Bubbles

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Re: Clawing back levy
« Reply #5 on: April 21, 2017 07:46:35 PM »
Again, thank you Flyingifr.

The local RO is certainly abusive.

For the moment, my concern is the attorney.

From what you are saying, the appearance is incompetence in:

1. Not using physical signatures on OIC as a matter of course - per IRS rules.

2. Possibly sending OIC for local RO inspection (where issue of lack of physical signatures was raised) v. directly to COIC in Memphis Tennessee.

If that is what happened, could local RO be off the hook with bank levy because OIC was not even in the mail to COIC?

                                                   ******

It will be several hours before I can reply again. In meantime, will try to get more information.


Flyingifr

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Re: Clawing back levy
« Reply #6 on: April 21, 2017 10:13:36 PM »
Again, thank you Flyingifr.

The local RO is certainly abusive.

For the moment, my concern is the attorney.

From what you are saying, the appearance is incompetence in:

1. Not using physical signatures on OIC as a matter of course - per IRS rules.Agreed, this would be incompetence. There are NO IRS forms where an Electronic signature is permitted. A copy of a wet signature is allowable, but not an Electronic signature

2. Possibly sending OIC for local RO inspection (where issue of lack of physical signatures was raised) v. directly to COIC in Memphis Tennessee. Not as cut and dried as #1 but certainly dumb. The fact is that, without the signature, the RO was on notice that an OIC was imminent. With that knowledge, I don't see what the rush to levy was.

If that is what happened, could local RO be off the hook with bank levy because OIC was not even in the mail to COIC? Once again, the RO seemed to be in a real hurry to levy, and the 433A form told the RO just where to do it.  A violation of law? Probably not. Bad judgment and obvious impatience in light of the information available, yes.

                                                   ******

It will be several hours before I can reply again. In meantime, will try to get more information.
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Debtors Exams are the perfect place for us Senior Citizens to show off our recently acquired Alzheimers.

Founder of the Credit Terrorist Training Camp (Debtorboards)

Bubbles

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Re: Clawing back levy
« Reply #7 on: April 25, 2017 09:50:24 PM »
Immediate focus is still on attorney incompetence.

Attorney had been in contact with RO.

Here are the facts as of now:

RO was definitely notified of intent to file OIC.

After composing OIC attorney sent copy to RO for inspection.

At that point RO objected to electronic signatures.

For some reason RO insisted on receiving OIC with wet signatures by a short deadline, which was a Friday before close of business.

According to signed affidavit from currier, OIC with wet signatures was delivered on time Friday to RO. But RO claims she didn't see them on her desk until Monday.

The bank account was probably levied Monday morning - but still working on verification.

Question:

1. If it can be proved that attorney put OIC with wet signatures in mail to COIC Friday, would that not by law invalidate Monday's bank levy? According to Mailbox Rule, who cares about currier and RO if OIC was in mail to COIC before bank levy. By law there would have been an OIC pending.

Yet attorney says he unsuccessfully appealed levy to RO and then RO's supervisor. //

If I were attorney, OIC would have been in the mail ASAP to protect client, BY LAW, against bank levy and other collection activity. That would have obviated any shenanigans by or misunderstandings with RO.

Questions:

2. What proof should I obtain that OIC was mailed to COIC that Friday (before bank levy)?

Attorney, COIC itself, and Post Office are potentially all sources of evidence.

3. As for the IRS requirement for wet signatures, are there any suggestions on most efficient Rule(s) to cite?

It's hard for me to get my mind around attorney making such an obvious blunder. //

Of course, the above begs the question:

Why, after at least a few months contact with attorney, and evidently some agreement not to pursue collection activities such bank levies, would the RO, with proposed OIC in hand, regardless of signature issue, take such a precipitous action?

The RO may well be off her rocker, but maybe not. She knows the rules. The attorney may not.












 






 

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