Fiscal Year 2021 Statutory Review of Compliance With Legal Guidelines When Issuing Levies

The Director, Headquarters Collection, Small Business/Self-Employed Division, should update the Internal Revenue Manual to clarify the procedures for the Federal Payment Levy Program and Municipal Tax Levy Program so that revenue officers do not improperly reverse Collection Due Process notices.

The Director, Collection Inventory, Delivery and Selection, Small Business/ Self-Employed Division, should ensure that Collection Due Process notices are not reversed for taxpayers identified for the Federal Payment Levy Program at the same time the IRS receives State Income Tax Levy Program proceeds.

The Director, Collection Policy, Small Business/Self-Employed Division, should ensure that corrective programming is implemented so that, when State levy proceeds are received for a taxpayer account in fully paid status, the account is not frozen with a pending additional tax assessment transaction and that a post-levy Collection Due Process notice is properly issued.

The Director, Collection Inventory, Delivery and Selection, Small Business/Self-Employed Division, should ensure that corrective programming is implemented so that the Automated Collection System will block levies for which the final Collection Due Process notice is reversed or disqualified.

The Director, Collecton Inventory, Delivery and Selection, Small Business/Self-Employed Dividsion, should implement corrective programming so that the Automated Collection System’s internal validity check blocks levies from being issued for taxpayer accounts to which an additional tax assessment posted but no new Collection Due Process notice was sent to the taxpayer.