A Critical Examination of IRS Collection
Policies and Procedures
By: Jack Warren Wade, Jr.
Published 1983 by The National Taxpayers Legal Fund
Copyright 1983, by Jack Warren Wade, Jr.
Library of Congress Catalog Card Number: 83-61874
"The Power To Tax" was written by
Jack Warren Wade, Jr. as part of a consulting contract with The National Taxpayers Legal
Fund (NTLF), an organization established by The National Taxpayers Union but which is no
longer in business. This monograph provided the basis for the first Taxpayer's Bill of
Rights which was passed in 1988. Many of its recommendations were adopted initially, but
several still remain as recommendations, such as recommendation #16 which calls for a
"politically appointed Ombudsman," and recommendation #6 which calls for the
Congress to require the IRS to "issue regulations tregulations specifying the
circumstances, conditions, and situations under which a levy will be made."
Check out the reasons why those recommendations were made, and think about why the IRS has
fought against their adoption.
Identifying the Problems & Reasons Why Change is Necessary
Introduction:
Title page with back cover text, introduction and author's background.
Chapter 1: The Collection Mission:
Enforcement Operations, Property seizures
Chapter 2: The Tax Collection Process:
Preliminary Collection Steps, The District Collection Office, The Field Collection Office
Chapter 3: The Federal Tax Lien:
Lien Filing Decisions, Releasing the Lien, Contact with the Taxpayers
Chapter 4: Determining Collection Potential:
Installment Agreements, New Guidelines for Allowable Expenses, Types of Installment
Agreements
Chapter 5: The Levy and Seizure Process:
The Notice of Levy, Pre-Seizure Considerations, The Writ of Entry Requirement, The Seizure
Act, The Minimum Bid Price, Problems with the Minimum Bid Formula
Chapter 6: The "Seizure Mentality":
Increasing Seizure Statistics, The Levin Hearings, Management Pressure to Make Seizures
Chapter 7: The Seizure Mentality and Violations of Civil
Liberties:
Seizure Abuses and Violations of IRS Policy Case Histories
Chapter 8: Seizures: The Last Resort?
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."
Chapter 9: Administrative Problems in the Collection Division
The Collection Division resists major internal policy changes...There is a serious lack of
decentralization in the structure...Chiefs of district collection divisions are not always
rotated from time to time...Some districts still refuse to issue a manual to every
employee...The goals of the national office are often contradictory to those of the
districts.
Recommendations for Comprehensive Legislative Reform
Recommendation #1
Congress should update IRC 6334, Property Exempt from Levy.
Recommendation #2
Congress should rewrite IRS 6331(d)(3)(A) Effect of Levy to provide for a release when the
taxpayer has entered into an installment agreement, or there is a financial hardship.
Recommendation #3
Congress should rewrite IRC 6343(a) Release of Levy to specify conditions under which a
levy can be released.
Recommendation #4
Congress should revise IRC 6331 to require the IRS to provide taxpayers with written
redemption and release rights.
Recommendation #5
Congress should provide restrictions on "successive seizures."
Recommendation #6
Congress should require the IRS to issue regulations specifying the circumstances,
conditions, and situations under which a levy will be made.
Recommendation #7
Congress should make deposits in financial institutions of wages and salaries subject to
the same exemptions from levy as is provided by IRC 6334.
Recomendation #8
Congress should prohibit IRS from levying on property where the value of the U.S. interest
in the property is insufficient to meet the expenses of seizure and sale.
Recommendation #9
Congress should prohibit seizures on the day a summons is served.
Recommendation #10
Congress should change the 10 day notice and demand period to 30 days.
Recommendation #11
Congress should require certain seizures to first be approved by higher management
officials
Recommendation #12
Congress should require the IRS to make written notifications prior to levy spelling out
payment options, appeals procedures, and the possibility of hardship suspensions.
Recommendation #13
Congress should grant certain taxpayers the right to file suit in a federal district court
subsequent to levy under these conditions.
Recommendation #14
Congress should allow taxpayers to administratively appeal a filing of a Notice of Federal
Tax Lien under certain conditions.
Recomendation #15
Congress should require the IRS to give taxpayers notification of their rights prior to
any interview that involves the assessment of a deficiancy.
Recommendation #16
Congress should provide that the IRS Ombudsman be an appointee of the President, just as
is the IRS Commissioner, and the Chief Counsel.
Recommendation #17
Congress should provide for the judicial appeal of a levy made when the IRS has determined
that collection was in jeopardy.
