Thursday, July 4, 2013

TIGTA: IRS Does Not Comply With the Law in 30% of Seizures of Taxpayers' Property

The Treasury Inspector General for Tax Administration yesterday released Fiscal Year 2013 Review of Compliance With Legal Guidelines When Conducting Seizures of Taxpayers’ Property (2013-30-061):
Taking a taxpayer’s property for unpaid tax is commonly referred to as a “seizure.” To ensure that taxpayers’ rights are protected in this process, the IRS Restructuring and Reform Act of 1998 amended the seizure provisions in I.R.C. §§ 6330 through 6344. ... TIGTA is required under § 7803(d)(1)(A)(iv) to annually evaluate the IRS’s compliance with the legal seizure provisions 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, to determine whether the IRS is complying with legal and internal guidelines when conducting each seizure. In the majority of seizures, the IRS followed all guidelines. However, in 15 seizures, TIGTA identified 17 instances in which the IRS did not comply with a particular I.R.C. requirement. Specifically, TIGTA found:
  • The sale of the seized property was not properly advertised. (§ 6335(b))
  • The amount of the liability for which the seizure was made was not correct on the notice of seizure provided to the taxpayer. (§ 6335(a))
  • Proceeds resulting from the seizure of properties were not properly applied to the taxpayer’s account or seizure and sale expenses were not properly charged. (§§ 6341 and 6342(a))
  • The balance-due letter sent to the taxpayer after sale proceeds were applied to the taxpayer’s account did not show the correct remaining balance. (§ 6340(c)) 

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