Revenue officers are supposed to make seizures only as a last resort. The Commissioner has said so. In fact, all IRS Commissioners have said so. The General Accounting Office has said so. Everyone outside the IRS believes it to be so. The national office Collection Division even trains new revenue officers to believe it. Yet the former director of the Collection Division, J.R. Starkey, told Congress:

    The policy is not seizure is the last resort. Seizure may be the
    first alternative. The financial statement of a given taxpayer
    determines what appropriate action is next.

As we have seen, the purpose of the seizure power has often been misinterpreted by those within the IRS who are responsible for the exercise of that power. Congress intended the levy power to be used as a collection device to enable the IRS to "protect the revenue." Yet the revenue officer group managers, who are charged with the responsibility of "protecting the revenue"and "protecting taxpayers' rights" (they must approve a seizure first), are more concerned with gathering statistics for their personal promotion than they are with protecting anyone's rights. In theory, the concept of projecting a "firm enforcement image" may be an exercise in strengthening or "promoting voluntary compliance," as the IRS sees it, but in practice it is nothing more than an exercise in masochism.

It is impressive that of 2.2 million delinquent accounts closed in 1981, only 8,848 property seizures were recorded. The IRS commissioners always make a point of emphasizing this fact at congressional hearings.

But the actual number of seizures is substantially greater than these figures indicate. Notices of Levies served on paychecks and bank accounts are forms of seizure, and when the two statistics (74O,OOO levies served and 8,848 seizures) are added together the results are quite startling: 34 enforcement actions taken for every 100 delinquent accounts closed. This extremely high rate suggests that IRS's powers of persuasion do not work as well in obtaining compliance as their powers of attachment. A study should be made to determine the reason. Perhaps the IRS notices are not as effective in making believers of delinquent taxpayers as the IRS would think.

The Notice of Levy procedure is used quite extensively by the IRS. On any day about 3,000 of them are sent out to attach monetary assets such as paychecks and bank accounts. Although problems arise, little is heard of them. Seizing a paycheck or bank account doesn't quite have the "flair" of a business, auto, or home seizure. Perhaps there is an assumption made that the Notice of Levy procedure is necessary if the IRS is to have any enforcement authority at all.

The seizure process is different. It conjures up contradictory images and expectations. The public believes that the IRS will only seize a car or a home or close down a business when there is no alternative to collecting the tax, and the IRS even fosters this image. Yet overzealous group managers have perverted the purpose of the seizure process by imposing their own values on their revenue officers, who are required to carry out their managers' marching orders for fear of losing their jobs. Thus the evidence suggests that the exercise of the seizure authority is a more subjective process than the use of the levy power.

The GAO reported that revenue officers gave three reasons for making a seizure: 1. To collect the money either by seizing cash or by eventually selling the asset; 2. To gain the taxpayers' cooperation by letting them know that IRS has the power to seize and will use that power; and 3. To prevent business taxpayers from pyramiding their tax liability, particularly the withholding of taxes from employee wages, and not turning them over to the IRS (even if it means putting taxpayers out of business by seizing and selling their business property).

The first and third reasons for seizing are easily understood, but the second reason has a hidden variable. A hard-core group of habitual delinquents (mostly business taxpayers owing withholding taxes) do seem to take delight in constantly and purposely delaying their tax payments. These cases are frequently very difficult for revenue officers, and money is often only collected through enforced collection actions. In these situations, using the seizure authority to collect the tax and solicit the taxpayer's cooperation makes good sense. The GAO has estimated that repetitive delinquents account for 50-84% of a revenue officer's inventory, and education of these taxpayers is not normally the issue.

However, using a seizure to solicit the taxpayer's cooperation, when in fact the revenue officer has not tried other alternatives. smacks of overzealous enforcement enforcement and an abuse of power. "Cooperation" is subject to different interpretations by various group managers. The real hidden message is that the seizure authority is used to "teach the taxpayer a lesson." For some taxpayers it's the only lesson they will receive.

The GAO study showed that in 52% of the cases revenue officers offered one alternative when the taxpayer could not pay in full immediately: a 10-day extension. Not only did the GAO prove this alternative to be unrealistic, but the revenue officers' manual does not even discuss a 10-day time frame. The revenue officer is required to obtain a taxpayer's financial statement (the IRS calls it a Collection Information Statement) if the taxpayer does not immediately pay in full, (IRM 5231.52:(3)), and then decide upon a course of action. By not requiring the taxpayer to submit a financial statement and then allowing only l0 days to pay, the eventual result is most likely to be a seizure. Despite the IRM requirement (5311:(5)) that the taxpayer be informed that levy or seizure will be the next action, the GAO has reported that 57% of the taxpayers interviewed said they were not told this.

The most likely scenario is the following sequence of events. Very close to the end of the reporting month, the group manager discovers he has no seizures recorded for the month. Not wanting to be "shut-out," he directs his revenue officers to check their case files for an "uncooperative" taxpayer. The revenue officers then pull out cases in which unreasonable demands or expectations had previously been made (like only granting a 10-day extension instead of 60 days) and not been met by the taxpayer and then proceed with the seizure.

The poor taxpayer gets caught between a rock and a hard place. He may have initially agreed to the revenue officer's demands with the unrealistic expectation that the money would come in on time or that the revenue officer will be more humane about it later. Taxpayers rarely know IRS procedure and usually believe whatever the revenue officer tells them, so they may not be aware initially that they've been put in an impossible situation. Many taxpayers are frightened when they cannot meet the revenue officer's demands and don't fully communicate their problems to him, thereby making them a prime target for seizure action. due to their "lack of cooperation."

One of the ironies in this situation is that the GAO report discovered that in many cases revenue officers spend an excessive amount of time contacting taxpayers and working with them. But, "despite the numerous contacts being made, revenue officers did not use them effectively." They did not advise taxpayers of their appeal rights, they did not explain the IRS seizure powers, and they did not always ask for a financial statement when one was needed.

The GAO has stated that "informing taxpayers about these powers and that seizure is the next action might reduce seizures." The point is that if revenue officers were effective in their communication with taxpayers, many seizures would become unnecessary. Because of the "macho" attitude of projecting a firm enforcement image to taxpayers, many group managers will not allow their revenue officers to communicate with their taxpayer (not even a quick one-minute phone call) after the taxpayer has failed to make a payment, keep an appointment, or return a phone call.

The philosophy among many revenue officers is that it does not take a good revenue officer to make a seizure, and that the true mark of a good revenue officer is one with a low seizure rate and a correspondingly high collection rate. And the mark of a poor revenue officer is one with a high seizure rate, because a high seizure rate demonstrates that the revenue officer has not done his job properly and has not been careful in his communications with his taxpayers. It should not be necessary for a revenue officer to "make a seizure to impress upon the taxpayer that he can do it." There are far better methods of communication. Frequently a follow-up call to the taxpayer to ask "what happened" is all that is needed.