26 U.S.C. § 6330(e) contains a provision that is little celebrated and underutilized by people facing an IRS 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 making a request for a Collection Due Process Hearing (CDPH) is a highly efficient way to stop an IRS levy on a bank account or paycheck. I have employed this provision to bring to a halt an IRS (Internal Revenue Service) levy in as little as 2 days. A short time ago I put a remark in my shopping cart that even a dancing bear could stop an IRS levy by a well-timed request for a CDPH hearing as provided in 26 U.S.C. § 6330(b)(1).
However, a dancing bear would not be able to keep Internal Revenue Service collection activity postponed 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 funds you had in the bank when the Notice of Levy arrived from the IRS (Internal Revenue Service); and in spite of receiving complete paychecks during those delays; in due course, the end of the line will arrive and the IRS (Internal Revenue Service) will proceed with collection activities as they were before the hearing was demanded. When this happens the majority of people will be right back where they started; facing a garnishment by the Internal Revenue Service. It is because of this harsh actuality that I put up nine, no obligation videos, 4-10 minutes in length at www.irsterminator.com talking about strategies I have researched out 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 strategic action designed to prevail in the hearing as I discuss in the videos alluded to above; 2) Avoiding raising issues that would trigger you losing the hearing. Avoiding losing questions 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 obtain a notice of deficiency respecting the § 6702 frivolous return penalty was refused as being without foundation as there is no necessity that a notice of deficiency issue 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 contention that he did not get a fair-minded hearing because the Internal Revenue Service neglected to comply with his requests for documents was rejected by the Court as unsubstantiated. The Court held that Section 6330 did not bestow authorization for production of documents or other exploratory demands in association with a CDPH (Colletions Due Process Hearing).
Rohner advanced additional unsuccessful issues on appeal which will serve as the basis of a different article. The Court ended up holding that the IRS’s (Internal Revenue Service) administrative determination was to be upheld. Determinations such as this one have continuously served me as an motivation and not as a impediment. At least a instance like this functions as a forewarning respecting those who have current cases coming after. To give yourself the best possibility of being a winner go over the 9 video recordings at www.irsterminator.com.
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