TIGTA Finds IRS Does Not Always Comply With Legal Guidelines When Conducting Seizures of Taxpayers’ Property

In a draft report issued on June 12, 2013, the Treasury Inspector General for Tax Administration (TIGTA) found that the Internal Revenue Service (IRS) did not always comply with certain statutory requirements of the IRS Restructuring and Reform Act of 1998 for conducting the seizures of taxpayers’ property. To ensure that taxpayers’ rights are protected in this process, the IRS Restructuring and Reform Act of 1998 amended the seizure provisions in Internal Revenue Code Sections 6330 and 6344. TIGTA is required to evaluate the IRS’s compliance with the legal seizure provisions on an annual basis to ensure that taxpayers’ rights were not violated while seizures were being conducted.

TIGTA reviewed a random sample of 50 of the 738 seizures conducted from July 1, 2011 through June 30, 2012 and in 15 of the 50 seizures, TIGTA identified 17 instances in which the IRS did not comply with a particular requirement of the Internal Revenue Code.  Specifically, TIGTA found that: 1) the sale of the seized property was not properly advertised, 2) the amount of the liability for which the seizure was made was not correct on the notice of seizure provided to the taxpayer, 3) the proceeds resulting from the seizure of properties were not properly applied to the taxpayer’s account, and 4) the balance-due letter sent to the taxpayer after the sale proceeds were applied to the taxpayer’s account did not show the correct remaining balance.

The TIGTA report pointed out that noncompliance with these requirements could result in abuses of taxpayers’ rights, however, TIGTA made no recommendations in the report. IRS officials were provided an opportunity to review the draft report but had no comments.

Disclaimer: Hone Maxwell LLP articles and blogs are not intended as legal advice. Additional facts, facts specific to your situation or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.

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