How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bkb1956 Your Own Question
bkb1956
bkb1956, Enrolled Agent/Real Estate & Corporate Paralegal
Category: Capital Gains and Losses
Satisfied Customers: 2833
Experience:  18+ years of experience as a tax preparer; 25+ years of experience as a real estate and corporate paralegal
71603090
Type Your Capital Gains and Losses Question Here...
bkb1956 is online now
A new question is answered every 9 seconds

22 October 2015 06:44 1) Does the initial IRS levy include

Customer Question

22 October 2015 06:44 1) Does the initial IRS levy include safe deposit boxes? 2) If I write them asking for more time to pay after an LT16, what is the procedure?
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  CGassist.168 replied 1 year ago.

Q1: Does the initial IRS levy include safe deposit boxes?

A1: Based on the following information, a separate levy would have to be issued and then they still cannot have it opened. If a levy is issued against the box, the IRS will request that you open it in the presence of an IRS rep. SEE BELOW:

IRS representatives cannot arbitrarily gain access to your box. However, they can serve a Levy and a Notice of Seizure requiring us to freeze the box. The IRS then requests that you open the box in the presence of its representatives. If you refuse, a court order must be issued, requiring the box to be forced open and the contents impounded.

REFERENCE SOURCE:

http://www.washingtonsavings.net/personal-services/safe-deposit-boxes/FAQs-about-safe-deposit-boxes

------------------------------------------------------------------

Q2: If I write them asking for more time to pay after an LT16, what is the procedure?

A2: You need to call them and set up payment arrangements. SEE BELOW:

What you need to do

  • Pay the amount you owe within 10 days from the date of the letter.
  • File any missing tax returns and send payment for any tax due within 10 days from the date of the letter.
  • If you’ve already paid the balance, call the telephone number listed on the letter.
  • If you’ve already filed the returns, call the telephone number on the letter.
  • If you don’t think you owe the balance due or are required to file a return, call the telephone number listed on the letter.
  • If you can’t pay the balance, call the telephone number listed on the letter to discuss payment options.

REFERENCE SOURCE:

https://www.irs.gov/Individuals/Understanding-your-LT16-Notice

Let me know if you require further assistance with this matter.

Customer: replied 1 year ago.
Thank you for your response. Q1) Does the initial Levy deny me access to my own box? Q2) I was looking for IRS internal operating procedures for a detailed study in considering the way the IRS routes or handles responses after an LT16.
Expert:  CGassist.168 replied 1 year ago.

You are welcome.

Q1: Does the initial Levy deny me access to my own box?

A1: As mentioned in my previous response, unless the initial levy specifically includes the safe deposit box, no, the initial levy does not automatically include the safety deposit box.

----------------------------------------

As for a detailed study in considering the way the IRS routes or handles responses after an LT16, the collecting process from the Internal Revenue Manual is about as detailed as it's going to get. The LT16 may not be specifically mentioned, but this section applies to it.

https://www.irs.gov/irm/part5/irm_05-019-004r.html#d0e252

Customer: replied 1 year ago.
According to this another notice must be sent after the LT16 http://screencast.com/t/BSNCwkKS1
I was sent a CP523, then an LT16, is there another notice of levy or final notice of intent to levy?
Expert:  CGassist.168 replied 1 year ago.

My apologies, I am moderating a live webinar now. I am unable to continue on with you. I will release the questions back into the question queue so that someone else can assist you.

Expert:  bkb1956 replied 1 year ago.

Different expert here - my name is ***** ***** please allow me to provide you with some additional information.

The final notification from the IRS is the CP90/CP297. Even though you have received the LT16 and CP523, you still have an opportunity to pay the taxes you owe or make payment arrangements. The IRS is very flexible when negotiating payment plans, and my best advice is to be proactive and communicate with the IRS rather than waiting for the next IRS notice.

The following links contain excellent information you will find helpful:

http://www.howardlevyirslawyer.com/home/myth-vs-reality-irs-collection-threats/

https://www.taxact.com/tsupport/FAQDisplay.asp?Question=686

Recently, I contacted the IRS on a client's behalf AFTER the IRS had issued a levy against the client's self-employment income. During my initial conversation with the IRS, the levy was immediately released pending the outcome of the repayment negotiation conversations.

Please let me know if you require further information or clarification.

Thank you and best regards,

Barb

Customer: replied 1 year ago.
It seems like the IRS code does in fact have right to the freeze the box so the safe deposit box owner cant access it:5.10.3.13 (04-03-2013)
Safe Deposit Boxes1.Serve a Notice of Levy, Form 668–A, with a copy of the NFTL attached on an officer of the bank or trust company and request surrender of the contents of the box. The revenue officer will also provide part 4 of Form 668–B to the official as authority to seize the taxpayer's assets. The bank or trust company should then be advised not to permit the box to be opened except in the presence of a revenue officer.2.Ordinarily two keys are used to open a safe deposit box: a master key held by the company which owns the box and an individual key in the possession of the person who rents the box. A bank or trust company will not open a safe deposit box without the consent of the lessee of the box unless protected by a court order. Under these circumstances the government must prevent the taxpayer from having access to the box, or it must obtain a court order directing that the box be opened, usually by a locksmith.3.At the time that a safe deposit box is secured, Form 12912, Seal for Securing Safe Deposit Boxes, will be signed by the revenue officer and affixed over the locks for security while the box remains under seizure.4.Form 2433, Notice of Seizure, will be prepared while the revenue officer is still on the premises, or as soon as possible after leaving the premises. The notice, addressed to the bank or trust company, should specify the amount demanded and describe the property as "contents of safe deposit box." The box should be identified as accurately as possible (usually by box number and name of the institution).5.Personally deliver Part 2 of Form 2433 to an official of the bank or trust company. Deliver Part 1 to the taxpayer according to the procedures in IRM 5.10.3.20, Notice of Seizure Form 2433 - Delivery.6.When the rental period of the safe deposit box expires and is not renewed, a bank or trust company usually has the right to open the box. The revenue officer should attempt to determine if this is the situation in any given case, and if the right exists, use this opportunity to seize the contents of the box.7.If the revenue officer is unsuccessful in securing the taxpayer's consent or cooperation in opening the box, a Writ of Entry may then be sought or a suit requested to authorize entry into the safe deposit box (IRM 5.10.3.13.1, Court Order to Open Safe Deposit Box). Securing the taxpayer's consent or cooperation is preferable as it gives the taxpayer every opportunity to comply before resorting to a court order.8.When the deposit box is opened at a later date, either voluntarily or involuntarily, and the deposit box contains assets which are seized, a Supplemental Notice of Seizure (see IRM 5.10.3.10.2, Notice of Seizure Form 2433 - Supplemental) will be prepared describing the assets.9.When the box is opened, all residue from the seal should be removed by the revenue officer, or the bank official in the revenue officer's presence.
Expert:  bkb1956 replied 1 year ago.

What you have outlined is correct, however, as the first expert pointed out, the seizure of the contents of a safe deposit box is not arbitrary. The IRS must follow its levy and seizure protocol to do so. In other words, there is more involved than levying a bank account, and the IRS must have knowledge that a safe deposit box exists.

Customer: replied 1 year ago.
Why don't people just close one account and open another one somewhere else?
Expert:  bkb1956 replied 1 year ago.

Some do.

Customer: replied 1 year ago.
Is that illegal?
Expert:  bkb1956 replied 1 year ago.

I'm a tax expert not a legal expert. Some people leave accounts open, but withdraw almost all of the money. Usually, the IRS has methods to find out about bank accounts.

To be honest, I am not understanding your objective/motive regarding this topic. The first expert and I have provided the correct answers/information regarding your questions. The bot***** *****ne is that it is best to be proactive with the IRS rather than trying to determine what the IRS can and cannot do and how long it will take to do it. My personal experience with the IRS is that the IRS is very flexible and accommodating to taxpayers who owe taxes.

Since you have been given correct information thus far and we are not getting off topic, please take a moment to rate my answer since that is the only way I receive credit for answering you and alerts Just Answer to compensate me for a portion of the fee you paid.

Customer: replied 1 year ago.
Please answer if it is legal. I will then give a rating and a bonus.
Expert:  bkb1956 replied 1 year ago.

It is not illegal because the information that the IRS has about your bank accounts and wages is not absolutely, 100% current. The IRS has the information from your prior years’ income and tax returns. If they IRS wants to levy you in 2015, for example, they will be relying on information in their database that was reported to them on your 2014 taxes. If you are no longer banking or employed at the same place you were previously, an IRS levy could go to an empty source.

The voluntary disclosure of where you bank and work is not necessarily a bad thing – many IRS collection cases require the full disclosure of your accounts and income for resolution. Full cooperation is often necessary to get the bear off your back. But if you disclose this to the IRS, and they did not previously have it, and you can’t come to an agreement, you have just given them ammunition to levy you.

http://www.howardlevyirslawyer.com/2014/11/26/how-does-the-irs-find-my-bank-account-and-wages-to-send-a-levy/

Expert:  bkb1956 replied 1 year ago.

Just following up with you to see if you have any other questions or concerns. If so, please come back to me here at your convenience, and I will be happy to assist you. If not, please take a moment to rate my answer since that is the only way I receive credit for answering you and alerts Just Answer to compensate me for a portion of the fee you have previously paid.

Best regards,

Barb

Customer: replied 1 year ago.
Another tax expert told me:but in my 19 years of experience:CP523's and FNOIL'S have the same function - they are the last letter received before the levy.No - a FNOIL doesn't come after a CP523 in my experience. The CP523 is THE FNOIL!
Expert:  bkb1956 replied 1 year ago.

With all due respect to the other tax expert, the CP523 is NOT the last letter before levy.

See the following:

https://www.irsmedic.com/2015/02/20/irs-notice-cp523/

As the information in the link states, the letter sounds more serious and intimidating than it is. However, it should not be ignored.

As I mentioned previously, I am not understanding your intention/motive regarding this topic as well as the fact that you have, by your own admission, consulted with another tax expert. At this point, I would ask that you rate my answers.

Thank you and best regards,

Barb

Customer: replied 1 year ago.
What is the last letter before the levy in this situation?
Expert:  bkb1956 replied 1 year ago.

As I previously mentioned, the final notification from the IRS is the CP90/CP297. Even though you have received the LT16 and CP523, you still have an opportunity to pay the taxes you owe or make payment arrangements. The IRS is very flexible when negotiating payment plans, and my best advice is to be proactive and communicate with the IRS rather than waiting for the next IRS notice.

http://www.backtaxeshelp.com/faq/what-if-receive-intent-to-levy.html

Related Capital Gains and Losses Questions