Surprising Tactic to Suspend an IRS Levy

26 U.S.C. § 6330(e) contains a provision that is little acknowledged and underutilized by persons 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 requesting a Collection Due Process Hearing (CDPH) is a highly efficient method to bring to a halt an IRS (Internal Revenue Service) levy on a bank account or paycheck. I’ve utilized this provision to obstruct an IRS  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 block an IRS  levy by a well-timed request for a CDPH hearing as provided in 26 U.S.C. § 6330(b)(1).

Conversely, a dancing bear would not be able to keep IRS (Internal Revenue Service) collection activity postponed and most likely neither would most of us. In spite of all the postponements while appeals are pending; and in spite of being able to retrieve any money you had in the bank when the Notice of Levy arrived from the Internal Revenue Service; and in spite of receiving full paychecks during those delays; ultimately, the end of the line will take place and the  Internal Revenue Service will move forward with collection activities as they were before the hearing was demanded. When this happens almost all the people will be right back where they began; dealing with a levy by the IRS. It is because of this distasteful reality that I published nine, no-cost videos, 4-10 minutes long at www.irsterminator.com discussing strategies I have come up with that make keeping Internal Revenue Service collection activities suspended indefinitely a very real prospect.

There are two aspects to winning a CDPH hearing: 1) Taking positive strategies pointed at prevailing in the hearing as I discuss in the videos mentioned above; 2) Avoiding bringing up issues that would cause you to lose the hearing. Steering clear of losing issues is a matter of doing a little study and reviewing what issues have been raised in the past that lost.

Rohner v. U.S., 91 A.F.T.R.2d 2003-2425 (N.D.Ohio 2003) is the appeal ruling that I desire to deal with in part in this article. Rohner lost hisCDP hearing and appealed to the Federal District Court. I was able to was able to get a hold of his litigation by using the search feature at the District Court data base at www.versuslaw.com. I made an hour and forty minute video about how to use Versuslaw to do legal research and that recording is offered for you to be taught 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, it looks like Rohner may have been using an early Cracking the Code stratagem; or maybe, something taught by Irwin Schiff. He seems to be using the hearing to get the hearing officer to be in agreement with  his stance on why he had no taxable income and to get out of having to pay frivolous return penalties. The IRS sent Rohner a Notice of Intent to Levy that informed him of his entitlement to a CDPH and he demanded the hearing. After losing in the CDPH hearing, Rohner lost on appeal to the Federal District Court:

1) According to the published decision, the Court said that Rohner contended that he had the right to make a recording of the collection due process hearing or have a court reporter transcribe the hearing. The Court held that Rohner misstated the law and held that he did not have the right to have the collection due process hearing recorded or to have a court reporter transcribe the hearing.

2) According to the published result, the Court said that Rohner contended that the hearing officer declined to give  him a individual hearing with respect to the frivolous return penalties for each of the two different tax years. The Court held that collection due process hearings consist of more than simply theface-to-face meeting between the taxpayer and the officer. The Court held that written letters, telephone discussions and face-to-face meetings all are sufficient for an satisfactory hearing.

The Court ended up holding that the Internal Revenue Service’s administrative determination was to be upheld. In the videos at www.irsterminator.com I discuss how to use Rohner’s losing issues above to your own advantage. Check them out.

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