Key Terms

Success Stories

Every year, the Taxpayer Advocate Service (TAS) helps thousands of people with tax problems. Each individual or business taxpayer is assigned to an advocate who listens to the problem and helps the taxpayer understand what needs to be done to fix it. TAS advocates will do everything they can to get the problems resolved and will stay with the taxpayers every step of the way.

Read real-life examples of the ways TAS helps taxpayers:

TAS Works to Reinstate Offer in Compromise

A taxpayer came to TAS for help with a defaulted offer in compromise (OIC), an IRS program that allows some taxpayers to settle their debts for less than the full amount owed. The conditions of this offer required the taxpayer to file two prior-year returns. While the offer was in effect, the man’s wife died and the taxpayer suffered numerous health problems, all of which made it hard for him to handle routine business.
Throughout this difficult period, the taxpayer continued to pay what he owed on the non-filed returns, but the payments totaled more than the balances due. The IRS had granted the taxpayer extensions to file the returns, but ultimately defaulted the offer four days after the wife’s death in spite of evidence the taxpayer had advised the IRS of her death. Not realizing the offer was defaulted, the taxpayer filed the returns. In the meantime, the IRS applied the large overpayments to the balances, which it had restored because of the defaulted offer.
TAS secured a refund for the current tax year to address the taxpayer’s immediate hardship, and continued to advocate for him by asking the IRS to reinstate the offer. Initially, the IRS refused, but the case advocate continued to work the issue, which was ultimately elevated to the National Taxpayer Advocate. In the end, the IRS complied with TAS’s request, and the taxpayer received refunds of more than $50,000, including interest.
To learn about Offers in Compromise (OIC) and other collection and payment alternatives, please visit the Tax Collection and Payment Alternatives page.
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TAS Goes the Extra Mile for Interest from IRS

After resolving a stolen identity case and having the refund released to the taxpayer, a case advocate noted that the IRS had not paid interest, which she believed the taxpayer was entitled to receive. The taxpayer was satisfied with the outcome of the case and the case advocate could have closed it. Instead, she thoroughly reviewed the account and sent another request for action to the IRS. As a result, the IRS agreed and paid the taxpayer additional interest.
To learn about ways to avoid identity theft or assistance for victims, visit the Identity Theft page. If you have a question about the amount of your tax refund, visit the Income Tax Refund Delivery page. 
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TAS Discovers ID Theft Victim and Obtains Refund 

A taxpayer came to TAS for help in obtaining her 2010 refund. Research indicated she was a victim of identity theft and the IRS had frozen the account. TAS asked the IRS to reverse the freeze and allowed the IRS additional time to complete the request. The IRS wanted another extension, but TAS did not agree and ultimately issued a Taxpayer Assistance Order that required immediate action. The IRS complied and the taxpayer received a full refund.
If you’re having problems related to identity theft or tax-related fraud, visit the Identity Theft page on the Tax Toolkit or the Identity Protection page on 
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TAS Helps Retrieve Taxpayer’s Passport Stuck in IRS Limbo

A taxpayer submitted her passport to the IRS as part of the process of filing a 2012 tax return along with an application for an Individual Taxpayer Identification Number or ITIN. The next week, her father died and she needed the passport to return to her home country. TAS worked with the local congressional office to find out if her country’s embassy would issue a temporary passport but it could not. TAS then contacted the IRS, which located the application, processed the ITIN, and returned the passport.
If you’re having problems related to international tax issues or have questions about international tax requirements, visit the Resources for International Taxpayers page. If you have questions or want to learn about ITINs, visit the Individual Taxpayer Identification Number (ITIN) page. 
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TAS Secures Lien Withdrawal for College Student

A minor child lost her mother and inherited an insurance settlement, which passed to her father’s control. He filed a tax return for her and directed her to sign it, but he didn’t pay the large balance owed to the IRS. Years later, the child was denied a loan to attend college because of a federal tax lien stemming from that return. A Tax Court petition, an attempt to have the IRS reconsider its audit, and two contacts with IRS Counsel attorneys all failed. Everyone said nothing could be done because the taxpayer signed the return, the money belonged to her, and the assessment was against her.

The TAS case advocate saw how unfair this situation was and refused to give up. After taking a fresh look at the case, she found the IRS Office of Appeals had never been involved. She contacted Appeals, which reviewed the case and agreed with the taxpayer’s position. The IRS then complied with TAS’s request to remove the assessment from the account and withdraw the lien. Thanks to TAS, the young woman can move on with her life without the threat of IRS action hanging over her head.
If you’re experiencing similar issues or have questions about liens, visit the Tax Collection and Payment Alternatives page, or watch the Collection Alternatives – Liens video.
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TAS Pushes IRS for Lien Discharge 

A taxpayer had been waiting many weeks for the IRS to discharge his lien, and he needed it done within 24 hours or he would lose the sale of his property. The case advocate immediately contacted the taxpayer to secure documentation and faxed it to the responsible person at the IRS, stressing the immediate hardship and remaining in contact throughout the day. Within 24 hours, the lien discharge request was approved and information sent to the taxpayer in time for the sale of the property.
If you’re experiencing similar issues or have questions about liens, visit the Tax Collection and Payment Alternatives page, or watch the Collection Alternatives – Liens video.
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TAS Advocates for Small Partnership’s Full Refund of $10,000 in Penalties

A small partnership did not file a tax return for multiple tax years; however, the partners had reported the appropriate partnership information on their individual returns for each of those tax years. The IRS assessed failure to file penalties against the partnership for those years in excess of $10,000. The partnership paid the penalties, but tried to appeal them without success. The case advocate determined the partnership qualified for penalty relief under the provisions of Revenue Procedure 84-35 and advocated for the partnership by requesting the IRS abate the penalties. (Revenue Procedure 84-35 contains criteria under which partnerships with ten or fewer partners will not be subject to the IRC § 6698 failure to file penalty). The IRS agreed with TAS and adjusted the account, resulting in a full refund of amounts previously paid. The case advocate also educated the power of attorney about the revenue procedure provisions.
If you’re a small business owner looking for tax help, visit the Businesses section for tax information, tools and resources. 
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TAS Works Closely with the IRS to Remove Penalties for a Taxpayer with Accurate Records

A taxpayer came to TAS seeking a partial abatement of the failure to file penalty for a late-filed return. TAS advocated for full abatement since the taxpayer had a history of timely completing and filing all returns. The IRS agreed with TAS’s determination and abated the penalty in full.

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TAS Persistence Helps Taxpayer Suffering from Medical Condition Avoid Penalties

A taxpayer suffering from bipolar disorder came to TAS for assistance in proving that he filed his return. After reviewing account transcripts, the taxpayer learned that he owed penalties and interest. The case advocate explained that even though the tax was paid with each return, the returns were filed late, which caused the penalties. The case advocate requested penalty abatement with a letter from the taxpayer’s psychologist explaining why he couldn’t complete the returns on time. The IRS at first refused to abate the penalties. Ultimately, TAS issued a Taxpayer Assistance Order and the IRS agreed to abate all penalties.

If you’re seeking penalty-related assistance, we may be able to help. Visit the Get Tax Help page to learn if you qualify for TAS assistance.
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TAS Convinces IRS to Forgive Penalties due to IRS Error

Two years after erroneously allowing a taxpayer to claim the 2009 First-Time Homebuyer Credit (FTHBC), the IRS discovered its error, and adjusted the taxpayer’s account to recapture the credit. Consequently, there was an underpayment of tax on the taxpayer’s return for which the IRS imposed a penalty. The IRS denied the taxpayer’s claim of reasonable cause. The case advocate researched the problem further and was able to convince the IRS that the taxpayer qualified for relief from the penalty.

If an IRS error has led to penalties for additional taxes on your recent return, you might qualify for TAS assistance. To see if you qualify for TAS’s assistance, please visit the Get Tax Help page.
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IRS Waives Civil Penalties Thanks to Work of TAS Case Advocate

A taxpayer came to TAS for help in getting a year’s worth of civil penalties waived. However, the case advocate’s initial research found the taxpayer was actually facing three years’ worth of penalties, which the taxpayer didn't know because the other outstanding balances had been updated to “Currently Not Collectible” status. The case advocate sent the IRS supporting documentation with a request for reasonable cause relief. The IRS agreed with TAS, waived all penalties, and corrected the taxpayer’s account to zero.

If you’re struggling to pay civil penalties or other fines, you might qualify for TAS assistance. To see if you qualify for TAS’s assistance, please visit the Get Tax Help page.
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TAS Saves Taxpayer's Car from Repossession

An unemployed taxpayer whose return was being delayed by an income verification issue was about to have his car repossessed, which would leave him unable to look for work. The taxpayer asked TAS to get him his refund the next day. The case advocate advised the taxpayer that this was not possible, then contacted the function working the income verification, which led to the income being verified and the return released to continue processing. The case advocate also volunteered to speak to the repossession company (with the taxpayer’s permission), and explained that the refund was on its way. The company agreed to wait the additional time the taxpayer needed. The taxpayer wrote in three weeks later, saying the car was saved and he now was employed.

If you’re facing a tax issue that you have not been able to resolve yourself, TAS may be able to help you! To see if you qualify for TAS’s assistance, please visit the Get Tax Help page.
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TAS Gets Penalty Removed

A married couple turned to TAS after the IRS audited their return and disallowed their claim for the adoption credit. After the case advocate determined they were not eligible for the credit and clearly explained why not, the taxpayers agreed to remove it from their return. Since they hadn’t received the credit, no tax was due, but in addition to disallowing the claim, the IRS proposed a large understatement penalty. The IRS initially denied the case advocate’s request not to assert the penalty, but after further discussions the IRS dropped the penalty.

If you have questions specific to the adoption credit, please visit the Adoption Credit page. If you have questions about other tax credits you might qualify for, visit the Tax Credits page. 

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Getting a Fresh Start

The taxpayer came to TAS after the IRS wouldn’t accept his proposed payment amount for an installment agreement on a balance due. TAS reviewed the taxpayer’s financial situation and confirmed that his proposal fit the streamlined installment agreement criteria. The revenue officer continued to insist the taxpayer could pay more, by liquidating assets if necessary. The revenue officer also suggested the taxpayer make small payments for a year followed by a balloon payment. TAS continued to advocate for the streamlined agreement as provided for in the “Fresh Start” initiative created to assist struggling taxpayers. Just as TAS was about to elevate the issue, the revenue officer conceded that the streamlined installment agreement was acceptable. The payment agreement allowed the taxpayer to address other financial obstacles while beginning to pay his IRS debt.

If you have concerns about paying your taxes or questions about installment agreements, visit the Tax Collection and Payment Alternatives page or watch the “Installment Agreements – IRS Collection Alternatives” video on TAS’s YouTube channel. 

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TAS Finds “Alternative” Documents to Support FTHBC

The IRS challenged a taxpayer’s deduction for the First-Time Homebuyer Credit (FTHBC). Because he bought the home directly from the builder, the taxpayer didn’t have all the typical documents most people use to support their claims for the credit. TAS asked the IRS to reconsider the claim based on documents sent with the request, but the IRS asked for more. 

The final issue the taxpayer faced was proving the address of his residence. Because the county didn’t require occupancy permits, the taxpayer had no permit that demonstrated there was a home at that address, which was on a rural, numbered county road. TAS contacted the county office with jurisdiction over construction, which provided a document proving there was a home at that location. 
Along with this new information, TAS provided the IRS with property tax rolls reporting a significant increase from one year to the next. Based on the new and unique documentation, the IRS accepted the taxpayer’s claim and he received the credit in full. 
If you have questions about the FTHBC, please visit the First-Time Homebuyer Tax Credit page. You can also learn about other tax credits that may be available to you on the Tax Credits page.

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Hospitalized Taxpayer Gets Help, Levy Release and Funds Returned

The taxpayer contacted TAS because the IRS levied his Social Security income and bank account. TAS determined the IRS was levying 100 percent of the taxpayer’s income by attaching to a portion of his Social Security directly and the rest by levying the taxpayer’s bank account. This was going on while the taxpayer was in the hospital, and had no one to help him comply with the revenue officer’s demands for a collection financial information statement. 

TAS successfully advocated with the IRS for a release of the Social Security levy and returned to the taxpayer the funds the IRS received from the levy on the taxpayer’s bank account. The taxpayer’s balances due were placed in currently not collectible status.  
If you’re facing tax-related issues specific to levies, please visit the Federal Payment Levy Program page or watch the videos, “Federal Payment Levy Program – Overview,” and “Levies – IRS Collection Alternatives,” on TAS’s YouTube channel. 
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Stop That Lien!

A self-employed government contractor found herself owing a significant balance due after the IRS disallowed certain expenses she had claimed on her return. The taxpayer’s preparer filed an amended return consistent with the exam adjustments. The taxpayer also requested that the IRS place a collection hold on the account because she could not make any payment at this time. She provided the IRS with financial information which supported her claim that she could not pay. 

The IRS agreed that the taxpayer could not presently pay but insisted on filing a lien as a condition of the collection hold. However, even if the IRS withdrew the lien after filing, the filing of the lien would remain on the taxpayer’s credit report, which would prevent the taxpayer from securing government contracts and ultimately could put the taxpayer out of business. TAS negotiated with the IRS and was able to stop the Compliance area from filing the lien (just two days before it was scheduled to be mailed to the county courthouse), thus avoiding irreparable harm to the taxpayer.
Do you have questions about what to do if you cannot pay your taxes in full? You can learn more about collection payment alternatives on the Tax Collection and Payment Alternatives page
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TAS Gets Refund for Earthquake Victim Using Unconventional Means

A taxpayer on vacation became the victim of an earthquake that destroyed his hotel, leaving him only his cell phone and the clothes on his back.  When he checked his bank account through his phone, he found the IRS had not direct deposited his tax refund as he’d expected, which meant the account didn’t have enough money for him to come home.  Again, relying only on his cell phone, he located an IRS office online and called to ask for help.  Ultimately, the IRS referred him to a TAS office where he discovered his refund was delayed because he used the incorrect bank routing number on his tax return.  

The case advocate worked diligently with the taxpayer and the bank to secure correct account information.  However, when the bank didn’t respond quickly, the taxpayer snapped a picture of a blank check to document the proper routing number and emailed it to the case advocate.  The taxpayer eventually received his refund and was able to return home.

Concerned about the status of your refund, or issues that may affect the amount you receive? Learn more about refund delivery and access resources to track the status of your refund on the Income Tax Refund Delivery page. If you fall victim to a federally-declared disaster, special tax law provisions may help you recover. Learn more on the Disaster Relief page.

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TAS Helps Taxpayers Defrauded by Preparer 

Some tax return preparers defraud taxpayers and the government by inflating income, deductions, credits, or withholding without the taxpayer’s knowledge, with the goal of increasing the taxpayer’s refund, and then diverting the refund (or part of it) into his or her account. TAS worked with the IRS and its Criminal Investigation (CI) division to see that the IRS did not take collection against innocent taxpayers victimized by one such unscrupulous preparer. The preparer had one taxpayer sign a return showing a significant balance due, and asked the taxpayer to write a check to the preparer, with the understanding that the preparer would then make a payment with the return. After the taxpayer left the office, the preparer increased the expenses reported on the return, thereby decreasing the tax liability. The preparer then kept the difference between the liability shown on the return and the check received from the taxpayer. 

In another case, the preparer convinced a soldier fighting overseas that she could act as his power of attorney and file his return. The preparer claimed credits the soldier was not eligible for and secured a significant refund that she diverted to herself, while the soldier was told he did not owe any tax. 
The case advocate worked directly with CI to accept the cases into TAS and then worked with the local IRS examination group to treat the returns filed by the preparer as a nullity, and to have the taxpayers file correct returns. TAS made sure that the IRS issued any refund properly due to each taxpayer. TAS also successfully advocated to have the IRS remove penalties against the taxpayers, and made sure no further harm would come to them. The preparer has since been convicted by a federal court and sentenced to prison.
Learn more about tax-related fraud and identity theft on the Identity Theft page or by watching the Protecting Against Identity Theft video on TAS’s YouTube channel. You can also learn about how to select a tax preparer on the Choosing a Tax Preparer page or by watching the Choosing a Tax Preparer video. 
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One Digit Makes the Difference

When the IRS placed a levy on a taxpayer’s Social Security income and U.S. government pension, the taxpayer was forced to borrow money from family and friends to meet basic living expenses. While the IRS insisted the taxpayer owed employment taxes on the wages the taxpayer paid to the employees of his business, the taxpayer’s representative informed the IRS that the taxpayer was the only employee, and he had never employed anyone else. After several unsuccessful attempts to resolve the problem with the IRS, the representative contacted TAS.

The TAS Case Advocate determined the employment taxes were assessed against the wrong taxpayer. In reality, the wages belonged to another business that had entered its Employer Identification Number (EIN) incorrectly—just one digit off. With the assistance of the Case Advocate, the two business accounts were corrected, the Notice of Federal Tax Lien the erroneously filed in the taxpayer’s EIN was removed, both levies were released, and all the levied funds were returned to the taxpayer.

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Helping a Family Deal with a Stolen Identity

When a husband and wife were billed for taxes resulting from an IRS assessment under the husband's Social Security number, they were shocked, because the taxpayers did not receive taxable income for that year and had not filed a tax return. When the taxpayers contacted the IRS, they were unable to secure an explanation of the assessment and were advised they had unreported income in subsequent tax years as well. After the taxpayers contacted TAS, the Case Advocate established that the taxpayers had not earned the income in question. In fact, it was earned by numerous other individuals who had been using the husband’s identity for multiple years. After an investigation, the individuals responsible for the identity theft were identified, and the accounts of all the parties were corrected.

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TAS Helps Lower Installment Agreement Payments

The taxpayers attempted to renegotiate monthly payments of an installment agreement based on their actual expenses in a high cost of living area. The IRS would not allow these costs and demanded an unrealistic payment based on national standards. Working on the taxpayers’ behalf, TAS stepped in and successfully negotiated with the IRS. Thanks to TAS, the taxpayers are now making a lower payment and are able to meet necessary living and medical expenses.

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TAS Helps Organization Avoid Levy

TAS helped an organization in a low income neighborhood avoid seizure and levy action. Because the organization defaulted on a payment agreement, the IRS levied on its county support funds, making it impossible for the organization to pay its employees. However, the organization had defaulted only because the county failed to make several sizable monthly support payments. The county agency reported that it had not forwarded the payments because the organization had not renewed its application to operate.

To resolve the issue, TAS intervened and redirected the request to the appropriate county employee. After searching, the county employee discovered the organization filed its application to operate on time, and it had been misplaced at the county office.

The county immediately processed the application and paid the organization. Working with the IRS, TAS was able to have the levy released and determine a reasonable payment plan. Thanks to TAS’s help, the employees’ paychecks were honored.

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Helping a Soldier’s Family Get Medical Aid

A U.S. soldier in a combat zone needed to secure quick medical treatment for his child who was living in another country and was suffering from life-threatening health problems that could only be treated in the United States. To enter and remain in the United States during the treatment, the child and his mother needed visas, for which the State Department required signed paper copies of the soldier's last three tax returns. From overseas, the man had no access to these critical documents, and the IRS couldn’t provide them for a month or more, time the sick child probably didn't have. The local TAS office swiftly assembled a team of employees who worked non-stop to round up the documentation.

In a matter of days, the State Department accepted the computerized returns and issued the visas without delay, allowing the soldier's child to get the necessary medical treatment. “It felt really good” to help, said one of the TAS employees who worked on the case. “We were able to work around set procedures. We got some people to work outside the box.”

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TAS Helps Business Avoid Asset Seizure

Due to a tax-filing error, a U.S. business was in danger of losing its assets to a foreign government. The company contacted its member of Congress, who immediately called TAS. The TAS case advocate learned the business had filed a form with the wrong IRS campus – a form the foreign government needed to verify the business was current with its U.S. taxes. As a result, the company had not received the required paperwork confirming that its taxes were up to date.

On the taxpayer's behalf, TAS contacted the foreign government’s embassy in Washington, D.C. and consular offices in several different U.S. cities, but none of them had a copy of the required foreign government form. Finally, with the assistance of an international accounting firm, the case advocate was able to get the form to the taxpayer overnight, appropriately notarized, and submitted to the foreign government with a cover letter declaring the completed form's authenticity, with appropriate seals and stamps. The result: the foreign government's deadline was met, and the U.S. company got to keep its assets.

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TAS Eliminates Crime Victim’s Tax-Due Burden

A taxpayer’s acquaintance convinced her to sell a sizeable amount of stock in a mutual fund, and subsequently swindled the funds. The taxpayer failed to file a tax return for the money the stock sale generated, so the IRS filed a substitute return on her behalf, resulting in a large amount of tax due. The taxpayer had no income at the time, and although she worked with a tax professional to resolve this debt, the monthly payments quickly overwhelmed her and she turned to TAS.

The TAS case advocate gathered all information necessary to prepare an original return, and sent it to the taxpayer for her signature. With that information in hand, TAS negotiated with the IRS to reverse all previous penalty assessments relating to the “substitute” return and stock sale. “I felt so badly for her,” the TAS case advocate recalled, “to have been the victim of a crime and then have to pay tax on top of that.” It was just another work day… but a day that the advocate felt gratified to have been able to help someone who so clearly needed it.

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TAS Intervention Allows Debt-Ridden Landlord to Provide Tenants with Necessities

When a financially troubled landlord's rents were levied, he was left with no way to maintain his building. TAS stepped in on his behalf, arguing that the levy prohibited the landlord from providing tenants with heat, electricity, and safety. The case advocate obtained a partial levy release, allowing the landlord to provide a safe environment for his tenants.

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TAS Case Advocate Helps Taxpayer Keep Her Home

A taxpayer turned to TAS after exhausting every other option for resolving her tax problems. The taxpayer, who had earned a significant amount of income in previous years, had sizeable tax liabilities that she could no longer pay because her financial situation had deteriorated. After the IRS rejected her request for an offer in compromise (partial payment of her tax debt), she was at risk of losing her home.

When she contacted TAS, the case advocate helped her understand why her offer was rejected, and worked to process a new offer that accurately reflected her earning potential. The IRS accepted this offer and the taxpayer was able to keep her home.

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TAS Uncovers Identity Theft, Helps Victim Fund Medical Expenses

A couple, anxiously awaiting a tax refund to pay medical expenses, became concerned when the refund was significantly delayed. When they contacted the IRS, they were told to wait 180 days. When this time passed and the refund had not yet arrived, they contacted TAS for assistance.

Their TAS case advocate discovered the refund was delayed because another person had stolen their identity, using the husband's Social Security number to file a tax return. TAS convinced the IRS the return filed by the couple was valid. They received their refund and were able to pay the medical bills.

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First-Time Homebuyer Credit (FTHBC) - Timing Is Everything!

A married couple filed their return claiming the $7,500 FTHBC that had to be paid back over time. They received a letter from the IRS stating they did not qualify for the credit but not explaining why not. The husband contacted the IRS several times but never received an accurate explanation and eventually turned to TAS for assistance. A Case Advocate discovered the FTHBC was rejected because the couple applied for the credit prior to the closing date on their home. The Case Advocate educated the taxpayers about the FTHBC rules that require them to complete the closing before claiming the credit.

However, based on their closing date, the taxpayers actually qualified for an $8,000 FTHBC that didn't have to be repaid. When all was said and done, TAS ended the taxpayers’ frustration and left them with $8,000 that they do NOT have to pay back!

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TAS Helps Taxpayer Secure Construction License Through Lien Withdrawal

A Power of Attorney (POA) contacted TAS for assistance in getting a Notice of Federal Tax Lien (NFTL) withdrawn. The IRS had previously denied the taxpayers’ withdrawal request. Because of the NFTL, the taxpayer was unable to secure a license that he needed to work. After thorough research, TAS determined that the IRS prematurely filed the NFTL. The Case Advocate worked with the IRS to have the NFTL withdrawn.

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TAS Helps Unemployed Taxpayer Recover Car Seized by the IRS

The IRS seized an unemployed taxpayer‘s vehicle, leaving the taxpayer unable to look for work. The taxpayer contacted TAS for assistance in getting the vehicle returned. TAS conducted research and found the taxpayer was living on unemployment benefits and help from relatives. The IRS planned to place the account into uncollectible status after selling the vehicle. TAS issued a Taxpayer Assistance Order (TAO) to the IRS for the return of the vehicle and reimbursement of towing and storage fees. The IRS complied and returned the vehicle.

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TAS Helps Taxpayer Get Levy Released

A local TAS office received a frantic call from taxpayer who had just been notified the IRS had levied on his wages. The IRS told the taxpayer he needed to submit unfiled tax returns for two years before it would release the levy. TAS researched the account and discovered that if the IRS levied, the taxpayer would experience economic hardship, because he could not meet his basic reasonable living expenses.

TAS also learned the taxpayer had no income for one year and had filed an extension of time to file for the second year so the return wasn't due yet.

TAS asked the IRS to release the levy the same day the taxpayer called, citing the recent court case, Vinatieri v. Commissioner, for the proposition that if economic hardship is present, a levy must be released even if the taxpayer has not filed all required returns. By the end of that day, the IRS released the levy.

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TAS Identifies Computer Programming Glitch Subjecting Some Indian Tribal Governments (ITG) to Levies

The Federal Levy Payment Program (FPLP) allows for continuous levies on federal payments. Although the law does not exclude Indian Tribal Governments (ITG) from this program, IRS policy exempts ITGs from "systemic" FPLP levies. TAS discovered six ITG entities that the IRS had subjected to systemically generated FPLP levies. Working with the IRS, TAS learned that a computer programming error caused the automatic exclusion to malfunction. TAS asked the IRS for a programming fix and sweep of all ITG entities to see if any others might be systemically subjected to FPLP levies. The IRS discovered and blocked systemic levies on 48 additional entities. TAS also recommended that the IRS release any outstanding FPLP levies against the tribes and refund any levy proceeds received in error. The IRS agreed to release all levies and consider returning the proceeds on an individual basis.

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Taxpayer Gets Help with Penalties on Family-Owned Business

A taxpayer had a levy on wages due to multiple trust fund recovery penalty assessments dating back over many years. The taxpayer, who was very young at the time, worked part time for a family-owned business but did not take part in substantive business decisions. The taxpayer had responded during the trust fund recovery penalty investigation but did not fully understand how to present his case to the IRS.

TAS provided guidance on developing the case and secured the required Form 843, Claim for Refund and Request for Abatement, so the TP could challenge the trust fund recovery penalty assessments appropriately. TAS worked with IRS Technical Services to secure all of the documentation needed to support the taxpayer’s position. The IRS subsequently determined the taxpayer was not liable for any of the trust fund recovery penalties, removed them from the taxpayer's account, and refunded all of the levy payments and refunds previously applied to the liabilities.

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