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.