26 U.S.C. § 6330(e) includes a provision that is little celebrated and underutilized by people facing an Federal tax levy of their bank account or pay. 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 highly efficient tactic to bring to an end an IRS levy on a bank account or paycheck. I have taken advantage of this provision to end an IRS (Internal Revenue Service) 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 end an Internal Revenue Service levy by a timely request for a CDPH hearing as provided in 26 U.S.C. § 6330(b)(1).
Still, a dancing bear would not be able to keep IRS 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 cash you had in the bank when the Notice of Levy showed up from the IRS; and in spite of receiving full paychecks during those delays; ultimately, the end of the line will happen and the IRS will proceed with collection activities as they were before the hearing was requested. When this happens the majority of people will be right back where they began; dealing with collection activity by the Internal Revenue Service. 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 arrived at that make keeping Internal Revenue Service collection activities suspended indefinitely a very real likelihood.
There are two aspects to winning a CDPH hearing: 1) Taking affirmative strategies with the object being too prevail in the hearing as I discuss in the videos mentioned above; 2) Avoiding bringing up issues that would trigger you losing the hearing. Staying away from losing topics 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 line of reasoning that he didn’t receive a notice of deficiency with respect to the § 6702 frivolous return penalty was declined as being groundless as there is no condition 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 dispute that he did not receive a adequate hearing because the the Service neglected to comply with his demands for records was rejected by the Court as unsubstantiated. The Court held that Section 6330 did not grant authorization for production of documents or other investigative demands in connection with a CDP hearing.
Rohner advanced additional unsuccessful issues on appeal which will serve as the source of another article. The Court ended up ruling that the IRS’s administrative decision was to be upheld. Judgments such as this one have always served me as an inspiration and not as a dissuasion. At least a set of circumstances like this gives out a warning with regard to strategies to be used in the future. To furnish yourself the best prospect of triumphing review the nine videos at www.irsterminator.com.
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