TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION

 

 

Fiscal Year 2013 Statutory Review of Compliance With Legal Guidelines When Issuing Levies

 

 

 

August 20, 2013

 

Reference Number:  2013-30-092

 

 

This report has cleared the Treasury Inspector General for Tax Administration disclosure review process and information determined to be restricted from public release has been redacted from this document.

 

 

Phone Number  /  202-622-6500

E-mail Address /  TIGTACommunications@tigta.treas.gov

Website           /  http://www.treasury.gov/tigta

 

 

HIGHLIGHTS

FISCAL YEAR 2013 STATUTORY REVIEW OF COMPLIANCE WITH LEGAL GUIDELINES WHEN ISSUING LEVIES

Highlights

Final Report issued on August 20, 2013

Highlights of Reference Number:  2013-30-092 to the Internal Revenue Service Commissioner for the Small Business/Self-Employed Division.

IMPACT ON TAXPAYERS

When taxpayers do not pay delinquent taxes, the IRS has the authority to work directly with financial institutions and other third parties to seize taxpayers’ assets.  This action is commonly referred to as a “levy.”

The IRS Restructuring and Reform Act of 1998 requires the IRS to notify taxpayers of the intent to levy at least 30 calendar days before initiating any levy action to give taxpayers an opportunity to formally appeal the proposed levy.  Taxpayers’ rights are potentially violated if they are not notified within the 30-day period and a levy is issued.

WHY TIGTA DID THE AUDIT

This audit was initiated because TIGTA is responsible for annually determining whether the IRS complied with the IRS Restructuring and Reform Act of 1998 requirement to notify taxpayers prior to issuing levies.  This is the fifteenth audit report on this subject area.  The overall objective of this review was to determine whether the IRS has complied with 26 United States Code Section 6330, Notice and Opportunity for Hearing Before Levy.

WHAT TIGTA FOUND

The IRS is protecting most taxpayers’ rights when issuing systemically generated and manually prepared levies.  TIGTA reviewed 15 systemically generated and 30 manual levies identified through the Automated Collection System and determined that controls were effective to ensure that taxpayers were given notice of their appeal rights at least 30 calendar days prior to the issuance of the levies.  

In addition, TIGTA reviewed 27 systemically generated and 18 manual levies identified through the Integrated Collection System and determined that taxpayers were given notice of their appeal rights at least 30 calendar days prior to issuance of the levies.  However, three systemic levies had additional tax assessments in which a new notice of intent to levy was not sent prior to issuing the levies, as required.

WHAT TIGTA RECOMMENDED

TIGTA recommended that the IRS determine the feasibility of updating the systemic Integrated Collection System programming to prevent levies from being issued on modules in which a new notice of intent to levy has not been sent after there has been an additional assessment.

IRS officials agreed with the recommendation.  The IRS plans to continue to implement a change to the Integrated Collection System programming for systemic levies to prevent levy issuance on modules where an additional assessment has been made and a new Notice of Intent to Levy/Notice of a Right to a Hearing has not been sent to the taxpayer.

 

August 20, 2013

 

 

MEMORANDUM FOR COMMISSIONER, SMALL BUSINESS/SELF-EMPLOYED DIVISION

 

FROM:                       Michael E. McKenney /s/ Michael E. McKenney

                                  Acting Deputy Inspector General for Audit

 

SUBJECT:                  Final Audit Report – Fiscal Year 2013 Statutory Review of Compliance With Legal Guidelines When Issuing Levies (Audit # 201330003)

 

This report presents the results of our review to determine whether the Internal Revenue Service has complied with 26 United States Code Section (§) 6330, Notice and Opportunity for Hearing Before Levy.[1]  This audit is statutorily required in each fiscal year and addresses the major management challenge of Taxpayer Protection and Rights.

Management’s complete response to the draft report is included as Appendix VII.

Copies of this report are also being sent to the Internal Revenue Service managers affected by the report recommendation.  If you have any questions, please contact me or Augusta R. Cook, Acting Assistant Inspector General for Audit (Compliance and Enforcement Operations).

 

 

Table of Contents

 

Background

Results of Review

Levies Issued by the Automated Collection System Function Complied With Notification Requirements

Most Levies Issued by the Collection Field Function Complied With Notification Requirements

Recommendation 1:

Appendices

Appendix I – Detailed Objective, Scope, and Methodology

Appendix II – Major Contributors to This Report

Appendix III – Report Distribution List

Appendix IV – Outcome Measure

Appendix V – Example of Levy (Form 668-A)

Appendix VI – Previous Audit Reports Related to This Statutory Review

Appendix VII – Management’s Response to the Draft Report

 

 

Abbreviations

 

IRS

Internal Revenue Service

TIGTA

Treasury Inspector General for Tax Administration

U.S.C.

United States Code

 

 

Background

 

The Treasury Inspector General for Tax Administration is required to annually verify whether the IRS is complying with the IRS Restructuring and Reform Act of 1998 requirement to notify the taxpayer of the intent to levy at least 30 calendar days before initiating a levy action.

When taxpayers do not pay delinquent taxes, the Internal Revenue Service (IRS) has the authority to work directly with financial institutions and other third parties to seize taxpayers’ assets.  This action is commonly referred to as a “levy” (see Appendix V for an example of a Levy (Form 668-A)).  The IRS Restructuring and Reform Act of 1998[2] created the provisions of 26 United States Code (U.S.C.) Section (§) 6330[3] that requires the IRS to notify the taxpayer of the intention to levy at least 30 calendar days before initiating a levy action to give the taxpayer an opportunity to formally appeal the proposed levy.  Generally, only one notice of intent to levy is required per tax period.  However, a new notice is required when an additional tax assessment occurs after the original notice of intent to levy has been sent to the taxpayer and the additional tax assessment will be included in the levy.

The IRS Restructuring and Reform Act of 1998 also requires the Treasury Inspector General for Tax Administration (TIGTA) to annually verify whether the IRS is complying with the provisions of the Act.  This is the fifteenth year in which we have evaluated the controls over levies.  While levies can be issued for monetary or physical assets, this report specifically addresses levies of taxpayers’ monetary assets.

To collect delinquent taxes, levies are issued either systemically or manually by two operations within the IRS:

·       The Automated Collection System, through which customer service representatives contact delinquent taxpayers by telephone to collect unpaid taxes and secure tax returns.

·       The Collection Field function, where revenue officers contact delinquent taxpayers in person.  Delinquent cases assigned to revenue officers in the field offices are controlled and monitored with the automated Integrated Collection System.

Previous TIGTA audit reports[4] have recognized that the IRS has improved controls over the issuance of systemically generated levies, primarily due to the development of these systemic controls in both the Automated Collection System and the Integrated Collection System.  In prior years, we determined that the Automated Collection System and Integrated Collection System systemic controls were effective.  During tests, IRS employees were asked to make attempts to prematurely issue levies.  Neither system allowed the employees to issue a levy less than 30 days after the notice request date.  Also, both systems generated a warning each time an employee attempted to levy taxpayer property after the 30-day legal waiting period had passed but before the IRS 45-day guideline had expired.

There is a higher risk when revenue officers issue manual levies because they request these levies outside of the systemic controls that exist and not all manual levies receive managerial approval.  Because the Integrated Collection System is not generating the manual levies, we cannot be assured that there is a complete automated trail for these levies.  Therefore, it is impossible to reliably determine the exact number of manual levies issued by revenue officers during our review period.

TIGTA audit reports issued prior to Fiscal Year 2005 reported that additional controls were needed over manual levies issued by revenue officers; however, since our Fiscal Year 2005 report, we have reported that revenue officers properly notified taxpayers of their right to a hearing when issuing manual levies.  Nevertheless, TIGTA still considers manual levies to be high risk and will continue to thoroughly test them.

This review was performed at the Small Business/Self-Employed Division National Headquarters Collection function office in New Carrollton, Maryland, during the period February through April 2013.  This performance audit was conducted in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objective.  We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objective.  Detailed information on our audit objective, scope, and methodology is presented in Appendix I.  Major contributors to the report are listed in Appendix II.

 

 

Results of Review

 

Levies Issued by the Automated Collection System Function Complied With Notification Requirements

Our review of systemically generated and manually issued levies in the Automated Collection System function showed that taxpayers’ rights were protected.  Controls are in place and effectively ensure that the IRS gives taxpayers notice of their appeal rights for at least 30 calendar days prior to the issuance of the levies.

Taxpayers were given notice of their appeal rights when systemically generated and manual levies were issued by the Automated Collection System function.

The first step in the collection process involves mailing taxpayers a series of notices asking for payment of delinquent taxes.  If taxpayers do not comply, the majority of the accounts are forwarded to an Automated Collection System Call Center where customer service representatives contact taxpayers by telephone to resolve their accounts.  If accounts cannot be resolved, these representatives have the authority to issue levies.

Although Automated Collection System customer service representatives primarily issue levies systemically, they may also request the issuance of manual levies through the System under certain circumstances.[5]  Manual levies require the same advance notification to the taxpayer as systemic levies.  IRS procedures do not require that all manual levies issued by Automated Collection System customer service representatives be reviewed and approved by a manager prior to the levies being issued.

Automated Collection System systemic controls are effective

Tests of a judgmental sample[6] of 15 levies issued through the Automated Collection System between October 1, 2011, and September 30, 2012, found that all 15 taxpayers were timely notified of their appeal rights.  Therefore, TIGTA believes that the Automated Collection System systemic control effectively protected taxpayers’ appeal rights.

Virtually all levies issued by customer service representatives are generated through the Automated Collection System, which contains a control developed to comply with the IRS Restructuring and Reform Act of 1998.  The control compares the date that the taxpayer was notified of the pending levy with the date requested to actually issue the levy.  If there are fewer than 30 calendar days between the dates, the Automated Collection System will not generate a levy.  This control is designed to ensure that taxpayers have been notified of their appeal rights at least 30 calendar days prior to the issuance of any systemically generated levies.

Automated Collection System manual controls are effective

Our review of a judgmental sample of 30 levies issued manually by Automated Collection System customer service representatives showed that the IRS timely notified taxpayers of their appeal rights.  TIGTA analyzed the Automated Collection System case history narratives input by customer service representatives to identify any manual levies issued through the System between October 1, 2011, and September 30, 2012.  Employee numbers and action codes[7] were used as the basis to identify any manual levies issued through the System.  All taxpayers were timely notified of their appeal rights.

Most Levies Issued by the Collection Field Function Complied With Notification Requirements

Our review of systemically generated and manually issued levies by the Collection Field function showed that most taxpayers’ rights were protected.  The IRS gave taxpayers notice of their appeal rights for at least 30 calendar days prior to the issuance of the levies, except in some instances in which a new notice was required to be sent for additional tax assessments included in the levies.

Many times notices and telephone calls to taxpayers do not successfully resolve delinquent accounts, and cases have to be assigned to revenue officers in Collection Field function offices for face-to-face contact with taxpayers.  Cases assigned to Collection Field function revenue officers are controlled on the Integrated Collection System.  Revenue officers use the Integrated Collection System to record collection activity on delinquent cases and to generate enforcement actions such as levies.

Revenue officers most commonly issue systemic levies through the Integrated Collection System.  However, they are also authorized to issue manual levies on any case as needed.  Because the Integrated Collection System does not control revenue officer-generated manual levies, it is difficult to reliably determine their exact number.  No managerial review or approval is required when revenue officers issue most manual levies.  As a result, TIGTA believes there is still a high risk associated with manual levies issued by revenue officers.

Integrated Collection System manual controls are effective

Our review showed that all 18 taxpayers sampled received proper notification of their rights.  TIGTA analyzed the Integrated Collection System case history narratives to identify any mention of a manual levy between October 1, 2011, and September 30, 2012.  Because no automated audit trail is produced for manual levies, i.e., the Master File[8] does not have an indicator for manual levies, analyzing case history comments for any reference to a manual levy is the only way to identify potential manual levies.  Using this methodology, TIGTA identified and reviewed a judgmental sample of 18 cases in which revenue officers issued manual levies to seize the monetary assets of taxpayers.  All 18 taxpayers received proper notification of their rights.

Integrated Collection System systemic controls need additional programming

The IRS installed a control in the Integrated Collection System similar to the control in the Automated Collection System that prevents levies from being issued unless taxpayers have received 30 calendar days’ notice and have been informed of their appeal rights.  If fewer than 30 calendar days have elapsed since the notice of intent to levy date, the Integrated Collection System will not generate a levy.

TIGTA tested the effectiveness of this control by reviewing a judgmental sample of 27 systemically generated levies issued through the Integrated Collection System between October 1, 2011, and September 30, 2012.  We compared the date of the notice of intent to levy to the date the levy was issued.  For all 27 levies, taxpayers were timely notified of their appeal rights.  

However, the IRS failed to send the taxpayers a new notice of intent to levy as required for three levies with additional assessments made on a module covered by the levies.  The IRS agreed that these three taxpayers should have been provided a new notice of intent to levy for the additional assessments prior to the levies being issued and the taxpayer’s rights were potentially violated.  IRS management subsequently took corrective action on all three cases.

In addition, the Integrated Collection System is currently not programmed to prevent levies from being issued on tax modules when there is an additional assessment and a new notice of intent to levy is required to be sent to the taxpayer.  The revenue officers, in these cases, did not ensure that a new notice of intent to levy for the additional assessment was sent to the taxpayer before issuing the levy.  IRS management informed us that in Fiscal Year 2013, there will be a mandatory training course provided for revenue officers that will include instructions for checking for new assessments in relation to levies. 

Recommendation

Recommendation 1:  The Director, Collection Policy, Small Business/Self-Employed Division, should determine the feasibility of updating the Integrated Collection System programming for systemic levies to prevent levy issuance on modules where an additional assessment has been made and a new Notice of Intent to Levy/Notice of a Right to a Hearing has not been sent to the taxpayer.

Management’s Response:  IRS management agreed with the recommendation and plans to continue their actions to implement a change to Integrated Collection System programming for systemic levies to prevent levy issuance on modules where an additional assessment has been made and a new Notice of Intent to Levy/Notice of a Right to a Hearing has not been sent to the taxpayer.  

 

Appendix I

 

Detailed Objective, Scope, and Methodology

 

The overall objective of this review was to determine whether the IRS has complied with 26 U.S.C. Section (§) 6330, Notice and Opportunity for Hearing Before Levy.[9]  To accomplish our objective, we:

I.                 Determined whether manual levies issued by both revenue officers and Automated Collection System[10] function customer service representatives complied with legal guidelines in 26 U.S.C. § 6330.

A.    Identified any references to manual levies issued between October 1, 2011, and September 30, 2012, by querying the history narrative text field of the Integrated Collection System[11] open case inventories.  We identified 353 potential manual levies and reviewed a judgmental[12] sample of 30 potential manual levies from the open Integrated Collection System cases.  We used judgmental sampling because we could not identify the population of manual levies issued.  During the course of our audit, we reclassified 12 cases as systemic Integrated Collection System levies, which increased the systemic sample by 12 cases (for a total of 27) and decreased the manual levy sample by 12 cases (for a total of 18).

B.    Selected a judgmental sample of 30 manual levies from 387,467 potential employee-requested levies on the Automated Collection System between October 1, 2011, and September 30, 2012.  We used judgmental sampling because we could not identify the population of manual levies issued.  We used the employee and action codes[13] on the Automated Collection System to identify the manual levies. 

C.    Requested and analyzed case histories for all cases containing references to manual levies identified in Steps I.A. and I.B.

D.    Reviewed case history documentation and identified whether a revenue officer or an Automated Collection System function customer service representative had issued a manual levy.

E.     Analyzed Master File[14] transcripts and Automated Collection System and Integrated Collection System case histories to determine whether taxpayers were provided at least 30 calendar days’ notice prior to any levy actions initiated by the IRS.  We also verified that if more than 180 days had passed from the date of the notice to the date of the levy that a Warning of Enforcement Action was issued within 180 days prior to the date of the levy.  As part of this analysis, we checked to see if any additional assessments were made on the modules covered by the levy after the taxpayer was given notice but before the levy was issued.  If there was an additional assessment, we determined whether the taxpayer received a new notice.

F.     Validated the manual levy data from the Automated Collection System and Integrated Collection System by relying on TIGTA Data Center Warehouse site procedures that ensure that data received from the IRS are valid.  The Data Center Warehouse performs various procedures to ensure that it receives all the records in the Automated Collection System, Integrated Collection System, and IRS databases.  In addition, we scanned the data for reasonableness and are satisfied that the data are sufficient, complete, and relevant to the review.  All the levies identified are in the appropriate period, and the data appeared to be logical.

II.               Determined whether the IRS maintains sufficient automated controls and procedures to ensure that taxpayers are advised of their right to a hearing at least 30 calendar days prior to any levy action by testing systemically generated levies.

A.    Selected a judgmental sample of 15 Automated Collection System levies from an approximate population of 732,111 levies and 15 Integrated Collection System levies from an approximate population of 527,277 levies issued between October 1, 2011, and September 30, 2012, from the Automated Collection System and Integrated Collection System databases of open cases maintained in the TIGTA Data Center Warehouse.[15]  Because we reclassified 12 of our potential manual Integrated Collection System case levies as systemic, the Integrated Collection System systemic levy sample increased from 15 levies to 27 levies.

We have previously tested systemic controls on both systems to determine if they will allow employees to issue a levy less than 30 days after the notice request date.  Results showed that neither system allows the employees to issue a levy less than 30 days after the notice request date.  Since these controls were put in place, testing each year has been limited to a judgmental sample of levies.  Because again this year we did not anticipate finding any errors and the controls are strong, we did not use statistical sampling.

B.    Analyzed Master File transcripts and case histories as necessary to verify that taxpayers were advised of their right to a hearing at least 30 calendar days prior to any levy action.  We also verified that if more than 180 days had passed from the date of the notice to the date of the levy that a Warning of Enforcement Action was issued within 180 days prior to the date of the levy.  As part of this analysis, we checked to see if any additional assessments were made on the modules covered by the levy after the taxpayer was given notice but before the levy was issued.  If there was an additional assessment, we determined whether the taxpayer received a new notice.

C.    Validated the systemic levy data from the Automated Collection System and the Integrated Collection System by relying on TIGTA Data Center Warehouse site procedures that ensure that data received from the IRS are valid.  The Data Center Warehouse performs various procedures to ensure that it receives all the records in the Automated Collection System, Integrated Collection System, and IRS databases.  In addition, we scanned the data for reasonableness and are satisfied that the data are sufficient, complete, and relevant to the review.  All the levies identified are in the appropriate period, and the data appeared to be logical.

Internal controls methodology

Internal controls relate to management’s plans, methods, and procedures used to meet their mission, goals, and objectives.  Internal controls include the processes and procedures for planning, organizing, directing, and controlling program operations.  They include the systems for measuring, reporting, and monitoring program performance.  We determined the following internal controls were relevant to our audit objective:  the Small Business/Self-Employed Division Collection function’s automated controls in place that prevent the issuance of levies prior to 30 calendar days before initiating any levy action and managerial reviews.  We evaluated these controls by reviewing samples of levy cases.

 

Appendix II

 

Major Contributors to This Report

 

Augusta R. Cook, Acting Assistant Inspector General for Audit (Compliance and Enforcement Operations)

Carl Aley, Acting Assistant Inspector General for Audit (Compliance and Enforcement Operations)

Tim Greiner, Acting Director

Glen Rhoades, Acting Director

Phyllis Heald London, Audit Manager

Beverly Tamanaha, Acting Audit Manager

Nicole DeBernardi, Lead Auditor

Janis Zuika, Senior Auditor

 

Appendix III

 

Report Distribution List

 

Principal Deputy Commissioner

Office of the Commissioner – Attn:  Chief of Staff  C

Office of the Deputy Commissioner for Services and Enforcement  SE

Deputy Commissioner, Small Business/Self-Employed Division  SE:S

Director, Field Collection, Small Business/Self-Employed Division  SE:S:C

Director, Collection Policy, Small Business/Self-Employed Division  SE:S:C:CP

Chief Counsel  CC

National Taxpayer Advocate  TA

Director, Office of Legislative Affairs  CL:LA

Director, Office of Program Evaluation and Risk Analysis  RAS:O

Office of Internal Control  OS:CFO:CPIC:IC

Audit Liaison:  Commissioner, Small Business/Self-Employed Division  SE:S

 

Appendix IV

 

Outcome Measure

 

This appendix presents detailed information on the measurable impact that our recommended corrective action will have on tax administration.  This benefit will be incorporated into our Semiannual Report to Congress.

Type and Value of Outcome Measure:

·       Taxpayer Rights and Entitlements – Potential; three taxpayer accounts affected (see page 4).

Methodology Used to Measure the Reported Benefit:

From a judgmental sample of 27 systemically generated levies issued through the Integrated Collection System between October 1, 2011, and September 30, 2012, we identified three cases in which an additional assessment was made on a module covered by the levy, and the IRS failed to send the taxpayer a new final notification letter for the additional assessment before issuing the levy.  The IRS agreed that these three taxpayers should have been provided a new notice of intent to levy for the additional assessments prior to the levies being issued, and the taxpayers’ rights were potentially violated.

 

Appendix V

 

Example of Levy (Form 668-A)

 

The Form was removed due to its size.  To see the Form, please go to the Adobe PDF version of the report on the TIGTA Public Web Page.

 

Appendix VI

 

Previous Audit Reports Related to This
Statutory Review

 

TIGTA, Ref. No. 1999-10-071, The Internal Revenue Service Has Not Fully Implemented Procedures to Notify Taxpayers Before Taking Their Funds for Payment of Tax (Sept. 1999).

TIGTA, Ref. No. 2000-10-150, The Internal Revenue Service Has Significantly Improved Its Compliance With Levy Requirements (Sept. 2000).

TIGTA, Ref. No. 2001-10-113, The Internal Revenue Service Complied With Levy Requirements (Jul. 2001).

TIGTA, Ref. No. 2002-40-176, The Internal Revenue Service Has Improved Controls Over the Issuance of Levies, But More Should Be Done (Sept. 2002).

TIGTA, Ref. No. 2003-40-129, The Internal Revenue Service Does Not Have Controls Over Manual Levies to Protect the Rights of Taxpayers (Jun. 2003).

TIGTA, Ref. No. 2004-30-094, Additional Efforts Are Needed to Ensure Taxpayer Rights Are Protected When Manual Levies Are Issued (Apr. 2004).

TIGTA, Ref. No. 2005-30-072, Taxpayer Rights Are Being Protected When Levies Are Issued (Jun. 2005).

TIGTA, Ref. No. 2006-30-101, Fiscal Year 2006 Statutory Review of Compliance With Legal Guidelines When Issuing Levies (Aug. 2006).

TIGTA, Ref. No. 2007-30-070, Fiscal Year 2007 Statutory Review of Compliance With Legal Guidelines When Issuing Levies (Apr. 2007).

TIGTA, Ref. No. 2008-30-097, Fiscal Year 2008 Statutory Review of Compliance With Legal Guidelines When Issuing Levies (Apr. 2008).

TIGTA, Ref. No. 2009-30-070, Fiscal Year 2009 Statutory Review of Compliance With Legal Guidelines When Issuing Levies (May 2009).

TIGTA, Ref. No. 2010-30-068, Fiscal Year 2010 Statutory Review of Compliance With Legal Guidelines When Issuing Levies (Jun. 2010).

TIGTA, Ref. No. 2011-30-036, Fiscal Year 2011 Statutory Review of Compliance With Legal Guidelines When Issuing Levies (Mar. 2011).

TIGTA, Ref. No. 2012-30-095, Fiscal Year 2012 Statutory Review of Compliance With Legal Guidelines When Issuing Levies (Aug. 2012).

 

Appendix VII

 

Management’s Response to the Draft Report

 

DEPARTMENT OF THE TREASURY

INTERNAL REVENUE SERVICE

WASHINGTON, D.C. 20224

 

 

COMMISSIONER

SMALL BUSINESS/SELF·EMPLOYED DIVISION

 

 

August 6, 2013

 

MEMORANDUM FOR MICHAEL E. MCKENNEY

           ACTING DEPUTY INSPECTOR GENERAL FOR AUDIT

 

FROM:                      for  Faris Fink /s/ Ruth Perez

            Commissioner, Small Business/Self-Employed Division

 

SUBJECT:                       Draft Audit Report - Fiscal Year 2013 Statutory Review of Compliance With Legal Guidelines When Issuing Levies (Audit # 201330003)

 

Thank you for the opportunity to review your draft report titled: "Fiscal Year 2013 Statutory Review of Compliance with Legal Guidelines When Issuing Levies."  We agree with your recommendation as stated in the report.

 

We initiated efforts to update the Integrated Collection System (ICS) to address the required levy notices on subsequent assessments.  In addition, we will provide training on this topic to revenue officers during this year's Continuing Professional Education.

 

We concur with your Outcome Measure as described in the report.

 

Attached is a detailed response outlining our corrective actions to address your recommendation.

 

If you have any questions, please contact me, or a member of your staff may contact Darren J. Guillot, Director, Enterprise Collection Strategy at (202) 622-7902.

 

Attachment

 

Attachment

 

RECOMMENDATION 1:

The Director, Collection Policy, Small Business/Self-Employed Division, should determine the feasibility of updating the ICS programming for systemic levies to prevent levy issuance on modules where an additional assessment had been made and a new Notice of Intent to Levy/Notice of a Right to a Hearing has not been sent to the taxpayer.

 

CORRECTIVE ACTION:

We agree with the recommendation and will continue our actions to implement a change to ICS programming for systemic levies to prevent levy issuance on modules where an additional assessment had been made and a new Notice of Intent to Levy/Notice of a Right to a Hearing has not been sent to the taxpayer.

 

IMPLEMENTATION DATE:

January 15, 2015

 

RESPONSIBLE OFFICIAL(S):

Director, Collection Policy, Small Business/Self-Employed Division (SB/SE)

 

CORRECTIVE ACTION MONITORING PLAN:

IRS will monitor this corrective action as part of our internal management system of controls.



[1] 26 U.S.C. § 6330 (Supp. IV 2010) as amended by the Trade Act of 2002, Pub. L. No. 107-210, 116 Stat. 933; the Job Creation and Worker Assistance Act of 2002, Pub. L. No. 107-147, 116 Stat. 21 (codified in scattered sections of 26 U.S.C., 29 U.S.C., and 42 U.S.C.); the Victims of Terrorism Tax Relief Act of 2001, Pub. L. No. 107-134, 115 Stat. 2427 (2002); and the Community Renewal Tax Relief Act of 2000, Pub. L. No. 106-554, 114 Stat. 2763.

[2] Pub. L. No. 105-206, 112 Stat. 685 (codified as amended in scattered sections of 2 U.S.C., 5 U.S.C. app., 16 U.S.C., 19 U.S.C., 22 U.S.C., 23 U.S.C., 26 U.S.C., 31 U.S.C., 38 U.S.C., and 49 U.S.C.).

[3] 26 U.S.C. § 6330 (Supp. IV 2010) as amended by the Trade Act of 2002, Pub. L. No. 107-210, 116 Stat. 933; the Job Creation and Worker Assistance Act of 2002, Pub. L. No. 107-147, 116 Stat. 21 (codified in scattered sections of 26 U.S.C., 29 U.S.C., and 42 U.S.C.); the Victims of Terrorism Tax Relief Act of 2001, Pub. L. No. 107-134, 115 Stat. 2427 (2002); and the Community Renewal Tax Relief Act of 2000, Pub. L. No. 106-554, 114 Stat. 2763.

[4] See Appendix VI for a list of previous audit reports related to this review.

[5] One example of when a manual levy may be requested is for levies on Individual Retirement Arrangements.

[6] A judgmental sample is a non-statistical sample, the results of which cannot be used to project to the population.

[7] The action code shows what action was taken, such as a levy.  The employee code shows whether there was a system-generated action or an employee-generated action.

[8] The IRS database that stores various types of taxpayer account information.  This database includes individual, business, and employee plans and exempt organizations data.

[9] 26 U.S.C. § 6330 (Supp. IV 2010) as amended by the Trade Act of 2002, Pub. L. No. 107-210, 116 Stat. 933; the Job Creation and Worker Assistance Act of 2002, Pub. L. No. 107-147, 116 Stat. 21 (codified in scattered sections of 26 U.S.C., 29 U.S.C., and 42 U.S.C.); the Victims of Terrorism Tax Relief Act of 2001, Pub. L. No. 107-134, 115 Stat. 2427 (2002); and the Community Renewal Tax Relief Act of 2000, Pub. L. No. 106-554, 114 Stat. 2763. 

[10] A telephone contact system through which telephone assistors collect unpaid taxes and secure tax returns from delinquent taxpayers who have not complied with previous notices.

[11] An automated system used to control and monitor delinquent cases assigned to revenue officers in the field offices.

[12] A judgmental sample is a nonstatistical sample, the results of which cannot be used to project to the population.

[13] The action code shows what action was taken, such as a levy.  The employee code shows whether there was a system-generated action or an employee-generated action.

[14] The IRS database that stores various types of taxpayer account information.  This database includes individual, business, and employee plans and exempt organizations data.

[15] A centralized storage and administration of files that provides data and data access services of IRS data.