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| If | And | Then |
|---|---|---|
| an erroneous release was issued | the collection period remaining is still within the original 10 year statute | a new 668(Y) reflecting the same refile date that was contained on the original notice of lien is required. |
| a refiled NFTL was not timely filed | the original NFTL self-released, | update the CSED on ALS. The new 668(Y) will show "N/A" in column E, Last Day for Refiling. |
| an original NFTL was not filed during the initial 10 year statute, | the extended CSED should be input into ALS. The printed document will reflect "N/A" in Column E, Last Day for Refiling. |
5.12.3.24
(02-02-1999)
Filing of Certificates and Notices
- All certificates and notices will be filed in the same office where the original filing took place.
- Expenses related to the filing or recording of certificates will be borne by the Government. Duplicates will be associated with the applications held by Technical Services.
- In the event that these certificates and notices may not be filed in the office designated by State law, they are to be filed in the office of the clerk of the United States district court for the judicial district in the State office where the NFTL is filed.
- When filing a Certificate of Revocation and a new Notice of Federal Tax Lien, documents must be recorded in the proper order to be valid. The Certificate of Revocation must be recorded prior to the new Notice of Federal Tax Lien.
5.12.3.25
(03-22-2000)
Withdrawal of the Filed Notice of Federal Tax Lien
(Overview)
- IRC 6323(j) gives the
Service the authority to withdraw Notices of Federal Tax
Liens (NFTL) under certain circumstances as well as
provide notice to credit agencies. The NFTL may be
withdrawn under the following conditions:
- the filing of the notice was premature or otherwise not in accordance with the Services administrative procedures;
- the taxpayer entered into an agreement under Section 6159 to satisfy the tax liability for which the lien was imposed by means of installment payments, unless such agreement provides otherwise,
- withdrawal of such notice will facilitate the collection of the tax liability, or
- with the consent of the taxpayer or the National Taxpayer Advocate, the withdrawal of such notice would be in the best interest of the taxpayer (as determined by the National Taxpayer Advocate) and the United States.
- It is necessary that a Withdrawal of the Notice of Federal Tax Lien be prepared rather than a Certificate of Release of Federal Tax Lien, since the Certificate of Release releases both the NFTL (paper document) and extinguishes the tax lien
- Withdrawal notices may
be used if:
- the responsible unit has knowledge that the taxpayer has a credit available that would satisfy the lien (i.e., carryback, overpayment, adjustment, etc.),
- the taxpayer has filed for bankruptcy and the Federal Tax Lien was filed when the automatic stay was in effect (filing is not in compliance with the Bankruptcy Code),
- the lien is filed against institutions under control of the FDIC as successor to the Resolution Trust Corporation (RTC).
- Requests for withdrawals will be considered regardless of the date the notice of lien was filed.
- Withdrawal of the Notice of Federal Tax Lien is not mandatory except where the NFTL was filed in violation of the automatic stay in bankruptcy. See IRM 25.17.5.7.1.
5.12.3.26
(02-02-1999)
Taxpayer Requests
- All requests for
withdrawal of the Notice of Federal Tax Lien must be in
writing. Taxpayers may use Form 12277, Application for
Withdrawal of Filed Form 668(Y), Notice of Federal Tax
Lien. (see Exhibit 5.12.3-28). A request may be accepted
by fax if contact has been made with the taxpayer by
phone and the taxpayer history file is documented with
the date of the contact and notation is made that the
taxpayer wishes to send the request by fax. Requests
must contain the following:
- taxpayer's name,
- current address,
- taxpayer's identification number,
- a copy of the NFTL affecting the property, if available, and
- statement or basis for the withdrawal request.
- Taxpayers must provide written authorization for disclosure of information to creditors, credit reporting agencies and financial institutions.
- Route taxpayer requests to the office with control of the case.
- Forward cases to Technical Services in the area where the taxpayer lives or has its principal place of business when there is no open case in Collection.
- Subsequent requests for copies of approved withdrawal notices to be sent to creditors or financial institutions will contain the same information outlined in (1) above.
5.12.3.26.1 (07-15-2003)
Requests for Withdrawal When the NFTL is
Released
- On occasion you will receive requests from taxpayers for withdrawal of the NFTL when the NFTL has already been released.
- Issue the certificate of withdrawal only if one or more of the four withdrawal provisions is met.
- If a release has been issued there is no NFTL to withdraw. Withdrawing the NFTL, in most cases, means the Service did not intend to issue the NFTL but there is still a liability.
- Explain to the taxpayer that issuing the certificate of withdrawal after the certificate of release may cause confusion for the person receiving the documents.
- Contact Area Counsel if questions arise.
5.12.3.27
(07-15-2003)
Partial Withdrawal
- Neither the Internal Revenue Code nor the Internal Revenue Regulations have provisions for the issuance of a partial withdrawal. However, circumstances sometimes dictate that a partial withdrawal is necessary.
- Issue a partial withdrawal when a taxpayer was not responsible for the liability and should not have been included on the NFTL.
- Only the name of the non-liable taxpayer should be entered on the form. The NFTL is valid against the still liable taxpayer.
- Record the document in the proper recording office.
- The Service will bear the cost of the filing fee.
- Do not post a TC 583 to the still liable taxpayer's master file account.
5.12.3.28
(07-15-2003)
Recommending Withdrawal of the NFTL
- When a request is received from the taxpayer for a withdrawal of the NFTL, review the case history as well as the documentation provided by the taxpayer.
- Determine if sufficient documentation is provided to substantiate the withdrawal recommendation.
- Withdrawal may be granted under any of the four provisions provided by the Internal Revenue Code as outlined above. (See 5.12.2.25.1)
- Prepare a memorandum outlining the facts of the case.
- Forward the memorandum with the case file to the appropriate approving official for signature.
5.12.3.29
(07-15-2003)
Approving the Withdrawal Request
- SB/SE Compliance Group Managers, Collection Technical Services; SB/SE Revenue Officer Advisor Reviewers, Insolvency Group Managers have the authority to approve withdrawals.
- When the recommendation
for withdrawal is approved, prepare Form 10916(c),
Withdrawal of Filed Notice of Federal Tax Lien, and a
cover letter to the taxpayer (refer to Exhibits
5.12.3–10 and 5.12.3–11).
Note:
The withdrawal notice will also be used when filings are in violation of the automatic stay in a bankruptcy estate.
- The withdrawal notice must include any refile, amended, or corrected NFTL associated with the original filing, if applicable.
- Prepare the withdrawal notice in triplicate and file in the appropriate recording office within 10 days of notification from the taxpayer. The Service will bear the cost of filing.
- When the Service's copy is returned note the recording information in the ALS history screen.
- Forward a copy of the signed notice and a cover letter to the taxpayer after signature.
- Provide copies of the withdrawal notice to creditors, credit reporting agencies, or any financial institution with a written request from the taxpayer. This request must also contain the authority to disclose the information.
- Retain a copy of the withdrawal if you did not prepare the withdrawal using ALS.
- Input TC 583 to reverse the lien filed indicator, if you did not use ALS.
5.12.3.30
(03-22-2000)
Denying the Withdrawal Request
- Employees assigned the case are authorized to deny withdrawal of the notice of federal tax lien.
- Notify the taxpayer that the request is denied.
- Inform the taxpayer of his or her appeal rights as well as their right to discuss the denial with the immediate manager.
- Provide the taxpayer
with:
- Publication 1660, Collection Appeal Rights for Liens, Levies, Seizures and Installment Agreement Terminations, and
- Form 9423, Collection Appeal Request.
- Note the history with the reason for denial.
5.12.3.31
(02-02-1999)
Notice of Lien Withdrawal Will Facilitate Collection
of the Tax Liability
- Determine if withdrawal
of the NFTL will facilitate collection of the tax
liability, by considering the following:
- Will the amount realizable by the U.S. increase the chances of collecting the tax liability?
- Will the U.S. be adequately secured under IRC 6324B provisions?
- Will the Service receive a lump sum amount against the liability?
- Will withdrawal enhance the taxpayer's ability to obtain additional credit; and how will additional credit affect the taxpayers ability to pay the liability?
- Is the NFTL the result of a defaulted installment agreement?
- Is there any possibility that a bankruptcy may be filed if the withdrawal is not obtained?
- Is the taxpayer pyramiding liabilities?
- Follow the procedures outlined in Sections 2.27 or 2.28, once a determination has been made.
5.12.3.32
(03-22-2000)
Best Interest Withdrawal Provisions
- Two determinations are
required:
- one by the National Taxpayer Advocate or the designee for the National Taxpayer Advocate, with respect to the taxpayer and
- one by the Secretary or the designee for the Secretary.
- A determination that withdrawal is in the best interest of the government may be made by collection employees.
- There is no way every
scenario you encounter can be covered. Apply your
knowledge and experience to the case and use your
judgment in making a determination. In making "best
interest" determinations consider the following:
- What will be the effect of withdrawing the notice of lien? Are there claims currently subordinate to the Federal Tax Lien which will become superior?
- What is the likelihood that the taxpayer will dispose of the property if the notice is withdrawn? Is there sufficient equity for this to be a concern?
- Will tax collection be undermined if the notice is withdrawn and the taxpayer files for bankruptcy protection?
- Are there other tools available, for example subordination, that will alleviate the taxpayer's problem without eliminating the protection offered by the filed notice of lien.
- When making the best
interest determination the expectation is that the
Service and the taxpayer will benefit from withdrawal of
the notice.
If Then withdrawal is in the government's and taxpayer's best interest, (subject to approval at the managerial level), the employee should follow the withdrawal procedures outlined above. it is determined that withdrawal would not be in the best interest of the government, notify the taxpayer of the determination and explain his/her appeal rights. the case involves imminent, significant hardship, the National Taxpayer Advocate may resolve disagreements by issuing a Taxpayer Assistance Order (TAO), when (s)he determines that it is in the best interest of the taxpayer. - Follow the procedures in 5.12.3.29 when withdrawal is appropriate and 5.12.3.30 for denial.
5.12.3.33
(02-02-1999)
Installment Agreements and the Notice of Withdrawal
- Consider whether the
NFTL was inadvertently filed or whether this is a case
in which the filing should be maintained.
If Then the installment agreement provided for the notice, a request for withdrawal may not be granted. Note: Withdrawal may be appropriate under one of the other provisions of the Taxpayer Bill of Rights. the NFTL was not addressed in the installment agreement, withdrawal may be considered, but is not mandatory. the agreement provides for the Notice of Federal Tax Lien to be filed as an additional condition to the agreement, a request for withdrawal may not be granted. Caution: There is a separate box on the agreement which may be used for additional conditions. the NFTL was not addressed as an additional condition, withdrawal may be considered, but is not mandatory. - Follow the appropriate procedures outlined above for approving or denying a withdrawal request.
5.12.3.34
(07-15-2003)
Administrative Appeal Rights - Erroneous Lien
Filings
- Persons against whom a Notice of Federal Tax Lien (NFTL) was filed have the right to appeal the filing of the NFTL. The appeal is the administrative remedy to correct erroneous NFTL filings. (See IRC 6326).
- Requests must be handled expeditiously and should be addressed to the Technical Services Group Manager, in the area office where the NFTL was filed.
- The administrative
appeals process:
- may not be used to challenge the underlying deficiency leading to the encumbrance of the NFTL.
- must be appealed within one year after the taxpayer becomes aware of the erroneously filed NFTL
- All collection actions will be withheld during the administrative appeals process, unless collection is in jeopardy.
- The Service must issue a Certificate of Release within 14 days after determining the filing was erroneous.
- The release must include a statement that the filing of the NFTL was erroneous. This ensures that the public records contain a statement that the filing was not attributable to the taxpayer and will assist in repairing the taxpayers credit or other financial records. A Certificate of Release must be issued on any erroneously filed NFTL whether or not it is challenged in administrative review procedures.
- Taxpayers may request an appeal under the Collection Appeals Program (CAP) and may also be entitled to a Collection Due Process Appeal (CDP). See IRM 5.12.1.
5.12.3.34.1 (03-22-2000)
Request for Administrative Appeal
- Requests for an
administrative appeal under IRC 6326 must meet the
following requirements:
- be in writing,
- provide the taxpayers name, current address and TIN,
- include a copy of the NFTL as filed, if available,
- state the grounds on which the request is made (notice of deficiency was mailed to the wrong address, etc.),
- provide the canceled check or other evidence of payment, if liability satisfaction is claimed.
- provide information identifying the bankruptcy court, docket number and petition date.
If Then the request does not meet the administrative appeal criteria, respond to the appealing party using Pattern Letter 2424. See Exhibit 5.12.3–12. a request disputes the tax, penalty or interest due, attempt to secure the basis for the claim from the taxpayer. you can adjust the liability, make the adjustment. the taxpayer does not provide adequate substantiation that the assessment is incorrect advise the taxpayer to pay the liability and file a claim. the request does not meet the administrative appeal criteria and the taxpayer believes the filing is incorrect and identifies another issue (i.e., math error), process the request. - Follow the steps
listed below to process the request for appeal.
- Research IDRS to determine the status of the liability,
- Respond to the taxpayer using Pattern Letter 2423 to identify the reason the request does not meet the administrative appeal criteria and that his/her request is being referred to another function for action. See Exhibit 5.12.3–13.
- Obtain the name and telephone number of the contact point to be used in the letter.
- Technical Services will respond to all requests that meet the criteria within 30 days.
If Then the liability on the NFTL is in ACS inventory or in the queue forward the request to the ACS call site. the liability on the NFTL is in notice status (e.g., reactivated TC 530 case), input a CC STAUP to IDRS for the appropriate number of cycles and reference the receipt of a request for lien release in the IDRS history section. Technical Services should research and resolve the request or refer the request to the appropriate function for resolution. the liability on the NFTL has been assigned to CFf, forward the request to CFf, attention of the revenue officer assigned the balance due. the liability on the NFTL is not present on IDRS, it may have aged off IDRS and is in an inactive status present on the master file (e.g., CNC, below tolerance). Use the CFOL commands, IMFOL and BMFOL to view the accounts. Technical Services should then resolve the request or refer the request to the appropriate functional area for resolution. the request meets the administrative appeal criteria, establish and maintain a control record of all applicable requests. the request cannot be immediately resolved, research IDRS to determine the status of the liability and advise the employee/function assigned to the case of the taxpayers request. the liability on the NFTL is not present on IDRS, it may have aged off IDRS and is in an inactive status present on the master file (e.g., CNC, below tolerance). Initiate the request for a master file transcript by the input of CC MFTRD. This will bring the tax module data down onto IDRS within 24 hours. Technical Services should monitor the master file status of this liability with a weekly input of CC MFTRD until the resolution of the request. during the resolution period of the request, the deferred tax module becomes active, notify the appropriate function of the request received. If Then the taxpayer has provided proof that the liability was satisfied prior to the filing of NFTL, follow the procedures shown in IRM 5341 for adjustment and payment tracer action. the liability was assessed in violation of the automatic stay in bankruptcy (Title 11), prepare a Form 3870, Request for Adjustment to abate the assessment. the statute of limitations has expired prior to the filing of the NFTL, issue a certificate of release. it is determined that a NFTL was erroneously filed, issue a certificate of release. Note: It is not necessary to delay issuance of the release until after the credit or abatement appears on IDRS. See Exhibit 5.12.3–14 for the additional statement that should be typed on the front of the Form 668(Z). All reference to IRC section 6325 should be blocked out. - Provide the
appealing party with a copy of the certificate of
release attached to Pattern Letter 544. See Exhibit
5.12.3–4.
- Reverse the Lien Filed Indicator.
- Update the control record to reflect the nature, date of determination and date of the certificate of release.
- Issue the certificate of release expeditiously, to the extent practical, within 14 days after the determination that the filing of the NFTL was erroneous. See IRC section 6326(b).
- Inform the taxpayer using Pattern Letter 2424, Exhibit 5.12.3–12, when a valid determination is made.
If Then the liability was in ACS inventory or in the queue, notify the ACS call site of the determination; the liability is in notice status, notify the Campus revenue officer or Compliance Services Collection Operations manager of the determination; the liability is assigned to CFf, inform the revenue officer of the issuance of the certificate of release. the liability was not present on IDRS (e.g., CNC, below tolerance) and was being monitored by Technical Services, take the appropriate corrective action to resolve the liability. - Determine further
case action as follows:
- Reverse any CC STAUP on notice status accounts.
If Then the liability is in ACS inventory or in the queue, notify the ACS call site of the determination. the liability has been assigned to CFf inform the revenue officer of the determination. there are in any inactive liabilities being monitored by Technical Services, it should remain in the current master file status. - Update the control record to reflect the nature and date of the determination.
- Responses to taxpayer correspondence must be initiated within 30 calendar days from the earliest "I.R.S. RECEIVED" date (See IRM 5.1 (General)). However, every effort should be made to provide quality responses in less time.
- The action office
must initiate an interim reply letter within 30
days, when it is not possible to meet the 30 day "
I.R.S. RECEIVED" date. Additional interim letters
will be sent if necessary. An interim letter must:
- Identify the reason a final response is delayed.
- Specify when the final response will be mailed.
- Include the name, telephone number, and organizational code symbols for reference purposes as a contact point. Where feasible, the contact point should be someone familiar with the issues.
5.12.3.34.2 (03-22-2000)
Other Referral Requests
- All other requests
for review under IRC 6326 for the filing of a NFTL
that meet the appropriate criteria, should be
forwarded to Examination for
determination. - This includes
requests involving Substitute for Return (SFR) and
CP 2000 cases.
- Referral should be made to Examination using Form 3449, Referral Report to Examination addressed to "PSP Support " . See Exhibit 5.12.3–15.
- Identify on the top of the Form 3449 " Administrative Appeal of Lien" .
- Submit related cases, to the extent possible, to Examination together.
- Place the CSED on the transmittal, Form 3449, for any case in which the period has less than 6 months to run.
- Transmit each case with an imminent statute date under a separate Form 3449.
- Identify the date of the referral to Examination on the control record for future follow-up. Forward Parts 1 and 2 to Examination with the appealing party's request. Retain Part 3 for follow-up action.
- Issue Pattern Letter 2421 advising the appealing party that his/her request has been received and provide the taxpayer with a contact point for any further inquiries relative to their request. See Exhibit 5.12.3–16.
- Examination will
have 30 days from the referral date to return a
determination on the validity of the assessment. A
monthly review will be performed to identify any
Examination referrals that are overaged and
follow-up with Examination.
If Examination determines that the Then NFTL was erroneously filed, they will return Part 2 of Form 3449 to Technical Services indicating the nature and date of the determination. 1. Technical Services will issue a certificate of release. 2. Perform any further case action as described above. assessment was incorrectly made, an abatement is necessary. Examination will provide a completed Form 3870, Request for Adjustment requiring IDRS input. The certificate of release may be issued prior to the abatement posting to IDRS. assessment is valid Examination will indicate this determination on Part of Form 3449. Upon receipt of this determination, perform further case action as described above. - Update the control record to reflect the nature and date of the determination and the date of the certificate of release if appropriate.
5.12.3.35
(03-01-2004)
Damages - Civil Cause of Action on Unauthorized
Collection Action
- Section 7433 allows the federal government to be sued for damages in federal district court when, in connection with the collection of a tax, any officer or employee of the Internal Revenue Service recklessly, intentionally or negligently disregards any provision of the Internal Revenue Code or the related Treasury Regulations. The waiver of sovereign immunity applies to actions taken after November 10, 1988, the date of the enactment of this law.
- Subsection (e) was added by RRA98 to allow taxpayers to petition the bankruptcy court for actual, direct economic damages and costs of the action if the IRS willfully violated the automatic stay or discharge injunction.
- Employees, acting in the performance of their duties, whose actions are challenged under this Code section will not be held personally liable in such an action.
- The taxpayer must exhaust all administrative remedies available within the Internal Revenue Service prior to initiating a civil action in federal district court.
- In order to exhaust administrative remedies, the taxpayer must submit an administrative claim for damages in accordance with the regulations under section 7433.
- If a taxpayer is successful in a court action, he or she may recover the lesser of $1,000.000,000 ($100,000 for negligence) or the sum of the actual, direct economic damages suffered by the taxpayer as the proximate result of the reckless, intentional or negligent action, plus the cost of the action. Injuries such as inconvenience, emotional distress and loss of reputation are compensable only to the extent they result in direct monetary losses.
- Costs of the action
payable from a suit under this provision are:
- fees of the clerk and marshal
- fees of the court reporter for all or part of any stenographic transcript necessary for use in the case;
- costs of printing and witnesses;
- costs for securing regular as well as certified true copies of documents used in the proceeding,
- docket and filing fees; and
- payments made to court appointed experts and interpreters.
- Litigation and administrative costs, other than the cost of the action, are not recoverable under this section. Litigation costs which may include attorney's fees, may, however, be recoverable under Internal Revenue Code Section 7430, Awarding of Costs and Certain Fees. Administrative costs (including any costs incurred getting the Service to rectify its wrongful act and costs incurred pursuing an administrative claim for damages under section 7433) are not recoverable under section 7433. However, administrative costs incurred after the date a bankruptcy petition is filed may be awarded under section 7433(e) or violations of the automatic stay or discharge injunctions.
- Payment Authority - Claims under this provision will be paid out of funds appropriated for judgments, awards and compromise settlements under section 1304 of Title 31 of the United States Code.
5.12.3.35.1 (03-01-2004)
Administrative Claim Procedures
- Title 26, part 301, Section 7433-1, of the Code of Federal Regulations contains administrative claim procedures for Internal Revenue Code section 7433. The administrative claim is to be sent to the Technical Services Group Manager of the area where the taxpayer currently resides or, when dealing with a corporate entity, the area where the corporate headquarters is located.
- There is no
standard form used in preparing a claim. The claim
must contain the following information:
- The name, current address, current home and work telephone numbers and any convenient times to be contacted, and the taxpayer identification number of the taxpayer making the claim;
- The grounds, in reasonable detail, for the claim (including a complete description of the act and copies of available substantiating documentation or correspondence with the Internal Revenue Service);
- A description of the damages incurred by the taxpayer filing the claim (including copies of any available substantiating documentation or evidence);
- The dollar amount of the claim, including any damages that have not yet been incurred but which are reasonably foreseeable (including copies of any available substantiating documentation or evidence); and
- The signature of the taxpayer or the taxpayer's duly authorized representative.
- Each claim will be reviewed by Technical Services to insure that it includes this information. A taxpayer whose claim does not include the information requested in (1) above will be notified in writing, within 14 days of the receipt of the claim, of the deficiencies and advised that the claim is not processable. This is not considered a rejection of the claim because a claim meeting the requirements of Treasury Regulation 301.7433-1 has not been filed. Pattern Letter 2730 (See Exhibit 5.12.3-18) should be used to notify the taxpayer of the deficiencies in the claim.
- Administrative review of the claim should be completed as soon as possible but must be completed within 6 months of receipt of a processable claim. The taxpayer may bring suit either when a filing decision is made on the claim or 6 months after the filing of a processable claim. A taxpayer must file an action in federal district court within two years after the cause of action occurs. If the taxpayer files an administrative claim within the last 6 months of the period of limitations, the taxpayer can file suit any time after the administrative claim is filed.
- A cause of action occurs under this provision when the taxpayer has reasonable opportunity to discover all essential elements of a possible civil action for damages in federal district court under section 7433.
- Pattern Letter 2732 (See Exhibit 5.12.3-20) or Pattern Letter 2733 (See Exhibit 5.12.3-21) is to be used to notify the taxpayer of the results of the administrative review of the claim. If only a portion of the claim is being approved, both pattern letters will be sent to the taxpayer at the same time. Authority to sign these letters should be delegated no lower than the Technical Services Group Manager.
- There is no further administrative appeal of a claim for damages under this section if the claim is denied. The remedy provided by the statute is the institution of a suit.
5.12.3.35.2 (03-01-2004)
Administrative Remedies
- A judgment for damages under Section 7433 will not be awarded unless the court determines that the plaintiff has exhausted all administrative remedies within the Internal Revenue Service.
5.12.3.35.3 (03-01-2004)
Payment Authority
- Claims filed under Section 7433 will be paid from funds appropriated under section 1304 of Title 31, United States Code. Procedures for filing a claim remain unchanged.
5.12.3.35.4 (03-01-2004)
Evaluation of Claim for Damages Under IRC 7433
- Date stamp the claim upon receipt. Technical Services should complete the initial review of the claim within 30 days of receipt.
- Open an OI on ICS under 101 - Claim Other. Review the closed files for any prior claims.
- The statutory
elements contained in IRC 7433 must be applied to
each processable claim. In determining whether a
claim is administratively allowable the reviewer
must determine whether:
- an officer or employee of the IRS intentionally, negligently or recklessly disregarded any legal or regulatory provision of the Internal Revenue Code in connection with the collection of any federal tax ; and
- the taxpayet sustained direct, economic damages as a result.
- The facts and circumstances of each case must be evaluated. The reviewer must determine if the alleged infraction did, in fact, take place. He or she must also determine whether or not the infraction was a reckless, intentional or negligent disregard for the law, contained in (3) above.
- The reviewer must also seek to ascertain when, in time, the taxpayer became aware of the violation or should have become aware of the violation. Claims filed more than two years after the violation must receive special scrutiny. This means that the unauthorized action may have occurred more than two years from the filing date of the claim. The taxpayer's two-year limitation to bring suit begins at the point when