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Automated Levy Programs | |||||||||||||||||||||||||||||
| Master File Tax Code (MFT) |
30, 31, 55 Individual Master File only |
| Master File and IDRS Collection Status Codes |
22, 23, 24,
26 53 with closing codes 03, 09, 12, 39, and hardship codes 2432 |
| SITLP Selection Indicator | TC 971 AC 600 |
| Systemically Applied SITLP Payment | TC 670 DPC 20 |
| Manually Applied SITLP Payment | TC 670 DPC 21 |
5.11.7.1.5
(07-26-2002)
SITLP Correspondence Notices
- Pursuant to IRC 6330, SITLP will systemically issue a notice to the taxpayer, but unlike other notice requirements under IRC 6330, SITLP notices are "post-levy" notices. IRC 6330(f) requires that any taxpayer levied under SITLP shall be given an opportunity for a Collection Due Process (CDP) hearing within a reasonable amount of time after the levy.
- As a result of RRA 98 and IRC 6330, a post-levy notice, Computer Paragraph (CP) 92, Notice of Levy on Your State Tax Refund Notice of Your Right to a Hearing, was developed.
- The combination of a TC 971 AC 600 and a TC 670 DPC 20/21 on a tax module generates the CP 92.
-
The CP 92 is a Master File generated notice, mailed
Certified. A TC 971 AC 069 will systemically post on
each module when a CP 92 is generated.
Exception:
If a taxpayer previously received a CDP notice for any tax period(s) included on the SITLP levy, then no CDP notice will be issued for those tax period(s), unless there was an additional assessment, after issuance of the CDP notice.
Example:
A TC 971 AC 069 posted to the module on 04/01/2001, and a TC 300 assessment for $300.00 posts to the module on 05/01/2002. A CP 92 would be mailed and a TC 971 AC 069 would post to the module, if another SITLP levy occurred.
- On joint liabilities, the TC 971 AC 069 will only post to the primary Social Security Number. Programming changes may occur at a later date to allow for a separate TC 971 AC 069 for the primary and secondary Social Security Number.
- Exhibit 5.11.7-3 displays a copy of CP 92. CP 92 displays the balance due information and advises the taxpayer of the amount levied from his/her state tax refund. In addition, the notice explains the procedure for requesting a CDP hearing or Equivalent hearing, if applicable. The CP 92 also provides an ACS toll-free telephone number to contact for assistance. For W&I taxpayers the telephone number is 1-800-829-7650 and for SBSE taxpayers the telephone number is 1-800-829-3903. These telephone numbers are available for taxpayers to resolve their tax accounts or exercise their appeal rights.
5.11.7.1.6
(07-26-2002)
Appeal Procedures
- The CP 92 includes a Form 12153, Request for a Collection Due Process Hearing, Publication 1660, Collection Appeal Rightsand Publication 594, IRS Collection Process. This information will provide guidance on the appeal process and how to request a CDP hearing. If a taxpayer wants to request a hearing, he/she will send the request to the address shown on the notice.
- The taxpayer must request a CDP hearing in writing. Form 12153 or a written statement may be used for this purpose. The request must be received within 30 days from the date of the notice and the date of the TC 971 AC 069. Any requests received after the 30 days will be considered late and will be worked as an Equivalent hearing request.
- The Service representative handling the inquiry may attempt to resolve the tax account prior to forwarding the CDP or Equivalent hearing request to Appeals. When this occurs, request input of a TC 971 AC 061, which will stop future levy action, pending the outcome of the appeal. If the account is resolved, the taxpayer may choose to withdraw the request. The withdrawal must be in writing, Form 12256, Withdrawal of Request for Collection Due Process Hearing, can be used for this purpose. Once the withdrawal is approved, a TC 972 AC 061 will be input to reverse the TC 971 AC 061.
- If SITLP levy proceeds were previously applied to the tax balance, the representative may determine that all or part of the levy proceeds will be refunded to the taxpayer.
- If the representative is unable to resolve the account, the CDP or Equivalent hearing request will be forwarded to Appeals for resolution. Service personnel are to process any appeals requests in accordance with procedures in IRM 5.1.9, General Collection Procedure, Collection Appeal Rights or IRM 5.19.8, Collection Appeal Rights.
- When a taxpayer is barred from requesting a CDP or Equivalent hearing, he/she has the option to appeal the levy action under the Collection Appeals Program (CAP).
5.11.7.1.7
(07-26-2002)
Handling Inquiries
- Taxpayer inquiries regarding SITLP levies may be as a result of receiving either a "State" correspondence notice and/or the CP 92.
- Participating states are required to notify taxpayers of the levy against their state tax refunds. Often times, the state correspondence is received prior to the IRS notice.
- State correspondence refers all inquiries to the ACS toll-free telephone number 1-800-829-7650. State coordinators are advised to refrain from addressing SITLP inquiries.
-
In order to determine whether a taxpayer account has
been subject to a SITLP levy:
- Determine whether the taxpayer received notification from the state. This should advise the taxpayer of the SITLP levy and the amount of the state tax refund levied.
- Review any transcripts for a TC 971 AC 600 and a TC 670 DPC 20 or 21.
- If a TC 971 AC 600 is present without a corresponding TC 670 DPC 20 or 21, it is likely that the levy proceeds are forthcoming, or were previously applied to other modules subject to levy action.
- If both the TC 971 AC 600 and a TC 670 DPC 20/21 are present, then SITLP levy proceeds were applied to the tax module(s)
- The taxpayer may request a CDP/Equivalent hearing, at which time the procedures outlined in IRM 5.11.7.1.6,Appeal Procedures,will be followed.
- If the taxpayer is interested in resolving the remaining balance, discuss any options available to the taxpayer. This may include an installment agreement, offer in compromise, etc.
- If the taxpayer claims that the amount should not have been levied, it is possible that one or more of the levy exclusions is present on the account. See Exhibit 5.11.7-1,SITLP Exclusion Criteria. If the exclusion criteria are present on any module(s) affected by SITLP, procedures for initiating a manual refund may be necessary. Refer to IRM 5.19.9.2.
- In rare instances, taxpayers may file "wrongful levy" claims on SITLP levies against joint state tax refunds, when only one taxpayer is liable for the tax delinquency. These claims will be handled administratively, but taxpayers have the option to file a civil wrongful levy suit if the account cannot be resolved administratively.
-
SITLP correspondence will either be forwarded to one of
the four ACS Support sites, or to Service Center
Collection Branch (SCCB) for resolution. ACS Support
will work all CDP requests, but non-CDP inquiries may
initially be worked in SCCB and forwarded to ACS
Support, as appropriate.
SERVICE CENTER CAMPUS-ACS SUPPORT Fresno Campus W&I Kansas City Campus W&I Cincinnati Campus SB/SE Philadelphia Campus SB/SE
5.11.7.1.8
(07-26-2002)
State Agreement
- As a result of RRA 98, and an opinion from the Office of Chief Counsel, all participating states will follow the procedure outlined in one generic SITLP agreement.
-
The agreement includes the following sections:
- Purpose
- Authority
- Overview of the SITLP program
- Rights and responsibilities
- Coordination
- Concurrence
- SITLP is coordinated with the Office of Governmental Liaison & Disclosure (GL). The GL for that particular state presents the agreement to the state-taxing agency. Any questions regarding the terms of the agreement are generally addressed by the GL and the HQ-SITLP program analyst. The GL is also responsible for obtaining approval signatures.
- On occasion, the state(s) request approval to deviate from one or more aspects outlined in the agreement. When this occurs, the Office of Chief Counsel is consulted and/or the deviation is a result of a Compliance policy decision.
-
Currently, two template agreements exist.
- The standard SITLP agreement, and
- An agreement that permits the state to levy for an amount in excess of $25.00. The $25.00 could be used by the state to defray administrative costs, if State law and/or regulations permit.
-
SITLP agreements require approval signatures from the
following executives:
- State Official(s)
- GLD Area Manager
- Campus Directors (Submission Processing; Accounts Management; Compliance Services)
- W&I Field Assistance Director
- SBSE Area Director
- A copy of the signed SITLP agreement will be kept by a representative from the state agency, SITLP coordinator, GL and the Headquarters SITLP program analyst.
-
The Headquarters SITLP program is currently managed and
directed by SBSE, Compliance, Compliance Policy, Payment
Compliance, Office of Enforcement, at the following
address:
Internal Revenue Service
S:C:CP:P:E
NCFB C9248
5000 Ellin Road
Lanham MD 20706
5.11.7.1.9
(07-26-2002)
Exclusion Criteria
- Due to the implementation of RRA 98, it is imperative that every precaution is taken to avoid erroneous or wrongful levies. To accomplish this, SITLP has an extensive review of exclusion criteria that are used to eliminate tax period(s) and/or entities from SITLP levy prior to creating the SITLP cartridge file.
- It is essential to review the exclusion criteria in Exhibit 5.11.7-1, SITLP Exclusion Criteria, whenever handling a SITLP inquiry. If any transaction code, TC 971 with a corresponding action code or status code listed in the exhibit is present on any tax period, ensure that proper action is taken to avoid a wrongful or erroneous levy situation. Refer to IRM 5.11.7.1.7(7) for specific procedures.
5.11.7.2
(07-26-2002)
Federal Payment Levy Program
- The Federal Payment Levy Program (FPLP) is an automated levy program the IRS has implemented with the Department of the Treasury, Financial Management Service (FMS).
- The FPLP is a means by which the IRS will systemically levy federal disbursements using a paperless process.
5.11.7.2.1
(07-26-2002)
Background and Authority
- Internal Revenue Code (IRC) Section 6331(h) as prescribed by the Taxpayer Relief Act of 1997 (Public Law 10534) Section 1024, authorizes the Internal Revenue Service to issue continuous levies on certain federal payments.
- The law allows up to fifteen percent of specified payments to be levied. Specified payments include any federal payment other than a payment for which eligibility is based on the income and/or assets of a payee.
- The FPLP was developed to implement this law.
- FMS disburses some of the federal payments that are available for levy under this new law.
- Although this law allows the levy on some payments that are exempt pursuant to IRC Section 6334(a), the Service willnotpursue those payment sources at this time.
5.11.7.2.1.1
(07-26-2002)
Interagency Agreement
-
The interagency
agreement between the IRS and FMS provides for
certain federal payments disbursed by FMS to be
systemically levied. FMS
is the levy source for all levies issued
through the FPLP not
the federal payment agencies. Currently, the
following payments are levied:
- Federal retirement income disbursed for the Office of Personnel Management
- Federal (nonmilitary) contractor/vendor payments (Department of the Defense contractor payments will be included in the future)
- Federal employee travel voucher advances and reimbursements
- Federal employee salaries administered by the U.S. Department of Agriculture, National Finance Center; and the U.S. Department of the Interior, National Business Center.
- Social security benefit payments under Title II of the Social Security Act, aka Federal Old Age, Survivors, and Disability Insurance (OASDI) Benefits (except dependent child benefits; claims for lump sum death payments; Prouty recipient benefits for those aged 72 on or before 1971). Supplemental Security Income (SSI) will not be levied.
- The amount levied will be 15 percent of the amount that FMS will disburse for the federal payment agency. Federal employee salaries will be levied for 15 percent of the GROSS salary after current taxes, health insurance premiums, retirement contributions, and, if applicable, court ordered child support payments are deducted.
- If a taxpayer is receiving two or more types of federal payments that are available for levy through the FPLP, then 15 percent of each of those payments may be levied.
- Only the primary taxpayer's federal payment will be matched and levied at this time.
5.11.7.2.1.2
(07-26-2002)
Delegation Authority
- The delegation authority to issue an IRC 6331(h) levy and levy release through the FPLP remains the same as outlined in Delegation Order 191.
- Certain Taxpayer Advocate Service employees are also delegated to release systemically generated levies such as the FPLP, but only on modules not assigned in Status 26.
5.11.7.2.1.3
(07-26-2002)
Third Party Notification
- The FPLP is not subject to Third Party notification provisions under IRC 7602 (c) because contact is made between electronic database(s).
- Personal contact between IRS employees and FMS (or other federal agencies) about taxpayers should not be made with regard to FPLP levies, unless Third Party contact provisions are satisfied.
5.11.7.2.2
(07-26-2002)
Criteria
-
The following types of tax and collection status can be
selected for levy through the FPLP:
Master File Tax Code (MFT) 0106, 0913, 15, 16, 30, 31, 33, 34, 36, 37, 44, 50, 51, 52, 55, 60, 63, 64, 67, 77, 78 Status of Case Master File status 23, 24, 22, 26
Transaction Code 530, with closing codes 03, 06, 09, 10, 12, 13, 39 - A module will keep its current Master File status when it is selected for the FPLP.
-
If the module changes to another status that is within
the FPLP criteria, then the module will remain in the
FPLP.
Example:
If a Status 22 module, which is in the FPLP, changes to Status 24, then the module will remain in the FPLP.
5.11.7.2.2.1
(07-26-2002)
Exclusions
- Entities or balance due tax modules with certain condition and freeze codes will be excluded from selection. Exhibit 5.11.74, FPLP Exclusion Criteria, displays the list and description of transaction and freeze codes that are excluded.
- Excluded from the FPLP are modules/entities that should not, statutorily or administratively, be in levy status, such as pending or approved installment agreements, Offers in Compromise, approved Taxpayer Assistance Orders, open bankruptcies and litigation, pending claims, and imminent CSEDs.
-
If a module is in the
FPLP, and subsequently moves into one of these
exclusions, then the module will
systemically
reverse out of the FPLP.
Example:
If a Status 26 module, which is in the FPLP, changes to Status 72 with TC 520, the module will systemically reverse out of the FPLP.
Example:
If a Status 26 module, which is in the FPLP, is closed as a hardship with a TC 530 CC 32, the module will systemically reverse out of the FPLP.
Example:
If a Status 26 module, which is in the FPLP, receives a pending IA request, with TC 971 AC 043, the module will systemically reverse out of the FPLP.
-
Social security benefit
payments of IMF taxpayers will not be subject to the
FPLP levy if they meet a certain income exclusion
criterion (see LEM 5) and there is no TDI for any
subsequent year. See IRM 5.11.7.2.5.2,
SSA No Levy Indicator.
- Only social security benefit payments matched through the FPLP will be subject to this exclusion.
5.11.7.2.3
(07-26-2002)
FPLP Process
-
All delinquent cases that meet the selection criteria
will be transmitted to FMS to be matched with federal
disbursements.
Note:
Although a taxpayer may never receive a federal payment, he/she may still meet the selection criteria and will be transmitted to FMS to search for a possible future match.
- If FMS identifies a match, then the FPLP will systemically generate a CP 90 or 297, Final Notice, Notice of Intent to Levy and Notice of Your Right to a Hearing, if one has not been previously sent. Exhibit 5.11.75 displays a copy of CP 90/297, and IRM 5.11.7.2.4 provides a description of the notice. If the taxpayer does not appeal or resolve the case within the appropriate timeframe, IRS will transmit a levy to FMS, attaching 15 percent of the federal payments due to the taxpayer.
- If the match is a social security benefit payment, and after a Final Notice, Notice of Intent to Levy and Notice of Your Right to a Hearinghas been issued, then another notice, CP 91 or 298,Final Notice Before Levy on Social Security Benefits, will be issued prior to the levy of the payment. Exhibit 5.11.76 displays a copy of CP 91/298, and IRM 5.11.7.2.4 provides a description of the notice.
- For federal payments other than social security, a levy will be transmitted to FMS 10 weeks after a Final Notice, Notice of Intent to Levy and Your Right to a Hearing was issued; for social security payments, the levy will be transmitted to FMS 8 weeks after the CP 91 or 298 was issued.
-
Once FMS processes the IRS database against its payment
disbursement files, then FMS will transmit the proceeds
to IRS and send the remaining disbursement to the
taxpayer along with a notice indicating the federal
payment has been levied. Exhibit
5.11.77, Department
of the Treasury, Financial Management Service Notice to
Taxpayers, displays the following information
on the notice:
- The FMS notice displays the type of federal debt and the agency due the federal debt; the type, date and amount of the federal payment disbursement before levy and the paying federal agency; and then the amount levied. The notice also displays an Account Number, that consists of the TIN type, TIN, MFT and period, for which the levied payment posted.
- The FMS notice displays an Automated Collection System (ACS) phone number for taxpayers (18008297650) to contact the IRS to resolve their account. If a taxpayer calls the ACS phone number and the taxpayer is assigned to a local field office, the taxpayer will be referred to that appropriate office.
- FMS mails the notice to the taxpayer's address provided by the federal payment agency source which is not necessarily the address the IRS has on file for the taxpayer.
-
The FMS notice can
only accommodate one IRS address for taxpayers
to write:
Post Office Box 57
Bensalem PA 19020
Letters received at this address should be handled according to IRM 5.19.9.4,Liability Collection, Automated Levy Programs, FPLP Procedures, or forwarded to the appropriate office for resolution.
5.11.7.2.4
(07-26-2002)
Notice and Appeal
-
Prior to electronically levying a federal disbursement,
the FPLP will systemically issue a
Final Notice, Notice of Intent to Levy and Notice of
Your Right to a Hearing(CP 90IMF/CP 297BMF)
with collection due process appeal rights,
if one has not already been
sent.
- The notice CP 90/297 will be generated by the Master File & mailed certified with a return receipt (PS 3811). Transaction Code (TC) 971 AC 069 will systemically post on each module where the CP 90/297 was generated.
- The return receipt card (PS 3811) is addressed for return to the service center campus that generates the notice. Upon receipt, a TC 971 AC 066, 067, 068 will be input.
- CP 90/297 will display the balance due amounts and the ACS contact phone number (18008297650) for taxpayers to resolve the case or exercise their appeal rights.
-
The notice will
inform taxpayers of their right to appeal.
Taxpayers may their exercise appeal rights
through the:
Collection Appeals Program (CAP)
Collection Due Process (CDP)
Equivalent Hearing (Appeals request madeafter the 30 day CDP period)
Note:
If a Final Notice, Notice of Intent to Levy and Notice of Your Right to a Hearing (CP 90/297, Letter 1058, ACS LT 11) was issued prior to the last 180 days, a new warning of enforcement action does not have to be issued since this is a computer matching levy program. See IRM 5.11.1.2.2.4.
-
If the match is a social security benefit payment, a CP
91IMF/CP298BMF,Final Notice
Before Levy on Social Security Benefitswill
also be issued.
- CP 91/298 specifically indicates 15 percent of the taxpayer's social security benefit payment may be levied and provides an additional 30 days to resolve the tax liability.
- CP 91/298 will indicate the taxpayer's Claimant's Account Number and the Beneficiary's Own Account Number. These numbers are provided by FMS and SSA during the FPLP matching process to identify the taxpayer's social security benefit information.
- The notice will also display the balance due amounts.
- For a jointly filed income tax return, the primary taxpayer will be the only spouse receiving the CP 91. This is because the FPLP currently identifies and levies the primary taxpayer's benefit payment only.
- CP 91/298 is generated by the Master File; mailed regular mail to the taxpayer's last known address; and a TC 971 AC 169 will systemically post on each affected module. These notices will also have the ACS phone number (18008297650) listed.
-
The notice will
inform taxpayers of their right to appeal.
Taxpayers may exercise their appeal rights
through the following:
Collection Appeals Program (CAP)
Equivalent Hearing Request if no prior CDP or Equivalent hearing on the FPLP periods. - CP 91/298 is systemically generated for the FPLP only. It should not be issued manually and is not required prior to issuing duly authorized paper levies on social security benefit payments.
- Service personnel are to process any appeals requests according to procedures in IRM 5.1.9, General Collection Procedure, Collection Appeal Rights or IRM 5.19.8, Collection Appeal Rights.
- During any time of the FPLP notice and levy process, taxpayers may be referred to the Taxpayer Advocate Service for assistance if the respective Operating Division or Functional Unit is unable to provide immediate relief, especially taxpayers that have matched with a social security benefit payment. Service personnel should refer to IRM 13.1.7, Taxpayer Advocate Case Processing for guidance prior to referring taxpayers or potential problems to the TAS for assistance. Although taxpayer problems may meet TAS criteria, it is not necessary to refer the cases to the TAS, if the problems can be resolved immediately.
- It may be necessary to block or release the case from the FPLP, using the procedures in IRM 5.11.7.2.6, if a resolution is pending and no other exclusionary criteria exist.
5.11.7.2.5
(07-26-2002)
How to Recognize and Handle A FPLP Case
- Revenue officers must recognize modules that have been placed in the FPLP and determine if this process will be part of their strategy to resolve the case.
- If revenue officers decide that modules should not be part of FPLP, then they will need to place a block on the modules using procedures in IRM 5.11.7.2.6.
5.11.7.2.5.1
(07-26-2002)
FPLP Indicators
- Modules will remain in their original Master File status codes if they are selected for the FPLP.
- Master File (I/BMFOL) entity will display the indicator FMS LEVY>1 or FMS-CD>1, if at least one module has been selected in the FPLP. If it has not been selected for the FPLP, the MF entity screen will display 0 or no digit.
- IDRS (cc ENMOD) will display the indicator FMS>1 on the entity screens, if at least one module has been selected in the FPLP. If it has not been selected for the FPLP, IDRS entity screen will display 0 or no digit.
-
Each Master File and
IDRS tax module (cc TXMOD, I/BMFOLT) will also
display the following:
FMS LEVY/CD > 1 Currently not included in FPLP; however, at one time the module was included in FPLP. FMS LEVY/CD > 3 Currently included in the FPLP.