Dear Willie

Dear Willie:

I am preparing for Bankruptcy.  I would like to know which codes I need to pay the most attention to on my IMF.  I have filed returns but I want to be sure that I meet all the necessary requirements for bankruptcy pursuant to the IRS' computer files.

Can you tell me which are the most important codes?

Sincerely,

Prepared

Dear Prepared:

You should get your IMF via FOIA and attempt to figure out the date the IRS credits your returns as filed and the date of the assessment.

The following codes are the most important to remember:

            150  Return filed and tax assessed.

            290  Additional tax assessed.

            300  Additional tax or assessment by examination.

            460  Extension to file return.

            480  Offer in compromise pending.

            582  Tax lien recorded.

            610  Remittance with return.

            780  Account compromise.

            977  Amended return filed.

            Generally the IRS will have a computer code of 150 showing that a return was filed.  However, beware, this 150 might stand for the return the IRS filed, and that return is not sufficient for purposes of a  Chapter 7.  It is possible that they coded the return that you filed with a 977.  You should also ask for copies of the returns you filed about two months after you file them.

            You can get a copy of the IRS 6209 Manual or get help from me on this issue if you wish.  The fact is that you must be very careful to be sure that you have the proof you need before you go into the bankruptcy court.  Hope things go OK, give me a call if you need help.

COLLECTION NOTICES

            An Article by Bill Conklin

            The  purpose of the IRS Collection Division is to collect taxes as cheaply as possible.  The IRS uses computers for efficiency.  There are ten Regional Service Centers that analyze returns.  The computer will decide if there is a computational error and will analyze the return to figure a DIF score (Returns are audited as a result of certain DIF scores).

            The starting point for collection by the IRS is the receipt of a document at the service center showing tax liability.  That document may be a tax return, an audit closing agreement, an audit deficiency, or a Tax Court judgment.  Once the IRS receives the return or other document, they begin their dunning procedure. The first notice issued is a document called the "Notice and Demand." This document states the alleged liability and requests payment within ten days.  The statutes require this notice for the creation of a Federal Tax Lien and if the IRS doesn't send you one; you should be able to defeat their assessment in court. In an assessment for individual income taxes, the individual will receive at least three subsequent notices before the IRS starts administrative collection procedures. The second notice is called "Notice 502: Second Notice of Taxpayer Delinquent Account."  The next notice is "Notice 503; Request for Immediate Payment." and the last notice is Notice 504; Final Notice."  Notice 504 is sent by certified mail and it is a nasty notice.  The IRS will start enforced collection activity after 30 days.

            The IRS will then issue a Notice of Levy approximately six weeks after the Final Notice.  If the Service Center does not know what to levy, they will assign the case to the Automated Collection System (ACS) or they will issue a Taxpayer Delinquent Account (TDA) to the local office for collection.  Then a local agent will have the case and will pursue it.   If the ACS takes the case, they will search for the "taxpayers" and their assets.  The ACS computer will give the technician an electronic display of the individual's account.  The computer will dial the number and will redial later if it gets as busy signal.  IRS technicians have a script, which they read.  They attempt to determine where the taxpayer works and what banks he uses.  If you get a phone call from ACS, that means they don't have the information they need in order to levy your wages.  The IRS has almost unlimited power to harass individuals with the ACS.  If you are receiving harassment from ACS, you may wish to request that the account be transferred to a local Collection individual.  It is close to impossible to deal with the ACS and resolve a problem; and remember that they can issue a Notice of a Levy with the push of a button. If you have assets that cannot be discovered by the ACS; you might want to wait till the Revenue Officer enters the case to begin negotiation.  Of course, if you are a very private individual and you are concerned about your Fifth Amendment Rights, you may wish to assert your rights in response to a collection summons from a Revenue Officer.  See Chapter SF in the Anti-IRS Technical Manual. Good luck and don't ignore collection notices if you are not judgment proof.

THE IRS COLLECTION PROCEDURES

            An Article by Bill Conklin

            The IRS has the power to collect taxes through levy.  In order to pursue a levy, the IRS must have created a lien through the proper procedure; in other words, the IRS must have made an assessment, there must have been a Notice and Demand and the individual must have refused to pay (IRC 6321).

            The Federal Tax Lien arises at the time the assessment is made which is the date that the Form 23-C is signed by an assessment officer (IRC 6322).  The lien will continue for ten years or until the deficiency is paid.  The lien may also be satisfied through an abatement, the acceptance of an Offer in Compromise, or discharge in a liability in a bankruptcy proceeding.

            A lien extends for ten years from the date of assessment but the statute of limitations can be extended for the following reasons:

     1.  The individual signs a waiver of statute of limitations.

     2.  The individual leaves the USA for more than six months (IRC Section 6503(c).

     3.  The individual files bankruptcy, which extends the statute of limitations for the time of the bankruptcy plus six months.  (IRC Section 6503(b)(i).

     4.  The individual files an Offer in Compromise, which extends the statutory period for the time the IRS considers the proposal plus one year.

     5.  If the individual is sued by the IRS, they may get a judgment from the Court.

            If the statute of limitations is about to end and the individual will not sign a waiver, the IRS may initiate a seizure against wages.  Good luck and hang in there, remember it won't last forever.

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Why No One is Required to File Tax Returns at www.anti-irs.com.