Failure to Contest the Underlying Tax Liability Leaves Taxpayer Open to Levy Collection Comments Los Angeles Tax Litigator Bruce Givner

by Bruce Givner on September 4, 2012

Mr. Starkman timely filed his 2002 federal income return, then entered into an installment agreement with the IRS to make payments on his outstanding tax liability.  Because Starkman did not timely file his 2009 federal income tax return nor make his estimated tax payments for 2010, he technically defaulted on the installment agreement, even though he had timely been making the installment payments.

The IRS then sent Starkman a Final Notice of Intent to Levy and Notice of Your Right to a Hearing, and later a Notice of Federal Tax Lien Filing and Your Right to a Hearing.  Starkman then timely filed a Form 12153, Request for a Collection Due Process or Equivalent Hearing, which requested reinstatement of the previously entered installment agreement, but did not contest the 2002 tax liability.  The IRS issued a Notice of Determination Concerning Collection Action(s) when Starkman’s 2009 and 2010 liabilities were still outstanding.

Starkman filed a petition with the U.S. Tax Court.
The IRS can levy a taxpayer’s property if the taxpayer does not pay a tax due within 10 days after a notice and demand for payment.  IRC Section 6331(a).  At least 30 days before enforcing a levy collection, the IRS must give the delinquent taxpayer a final notice of intent to levy, including notice of the administrative appeals available to the person.  IRC Section 6331(d).  If a taxpayer fails to pay the tax due, after the demand, the IRS can levy the taxpayer’s property.  IRC Section 6321.

In reviewing the IRS’s actions, the Tax Court found the IRS had met all the applicable law requirements.  Further, requiring Starkman to pay his 2010 estimated tax payments and file his 2009 federal income tax return were not an abuse of its discretion.  Since the underlying 2002 tax liability was not questioned by Starkman, the Tax Court held that a levy of Starkman’s property was proper.

Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles County.  Call Los Angeles Income Tax and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.

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