A Power of Attorney contacted TAS for assistance with a small business taxpayer who was unable to pay his employees due to an IRS levy. The taxpayer had previously negotiated an installment agreement with an IRS Revenue Officer, and the taxpayer was making the installment agreement payments; however, the IRS had not released the Federal Payment Levy. The government sent levy payments of more than $200,000 to the IRS after the IRS granted the installment agreement.
TAS advocated for the business owner to have the assigned revenue officer release the Federal Payment Levy and return the levy proceeds to the taxpayer. The officer promptly released the levy, but at first refused to return the levy proceeds to the taxpayer. The Local Taxpayer Advocate diligently advocated for the taxpayer and argued for return of the levy proceeds because the IRS levy should have released the levy when it granted the installment agreement. Ultimately, the revenue officer agreed to return the levy proceeds. The taxpayer received the funds and could then pay its employees.
Related tax issue: Levies