Procedural Issues
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What is a Tax Return and When is it Good Enough?

As Supreme Court Justice William Brandies noted so eloquently in a 1930 opinion, “[t]he word ‘return’ is not a technical word of art.”[1] Translated from circumlocution and niceties to frank and righteous indignation, this means that Congress (via the IRS), which exerts so much time, energy, resources, and three to four shared administrative brain cells to the task of assigning and perfecting the definitions of definitions, beating a dead horse until even the glue factory won’t take it, failed to define return, one of the most essential words in the entire Code…arguably the second most important word after tax…which, I might add, is similarly not defined.[2] Because neither the courts nor Congress saw fit to define the metes and bounds of what a return might be, some taxpayers have been accused of coloring outside the lines when it comes to filing a “return” with the IRS. Try as some taxpayers…

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April 29, 2021
Procedural Issues
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Procedural Considerations on Collection (Levies and Distraints) – Part Three: Enforcement of Levy

In the first article in this series of posts regarding the IRS's enforced collection through levies, we discussed the IRS’s authority and limits thereto regarding levies and distraints. In the second article of this series on levies, we discussed the procedure requiring notice and hearing before a levy attaches.  In this third article in this series, we discuss the IRS’s enforcement of levies and distraints. Enforcement of Levy If a person (including an officer or employee of a company or a member or employee of a partnership) fails or refuses to surrender the property to the IRS subject to the levy, the person becomes personally legally liable to the IRS in an amount equal to the value of the property not surrendered, but not exceeding the amount of taxes for which the levy was made, together with costs and interest on such amount[1] from the date of the levy.[2] Any…

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April 29, 2021
Procedural Issues
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Procedural Considerations on Collection (Levies and Distraints) – Part Two: Notice and Hearing Before Levy

In the first article in this series of posts regarding the IRS's enforced collection through levies, we discussed the IRS’s authority and limits thereto regarding levies and distraints. In this second article of this series on levies, we discuss the procedure requiring notice and hearing before a levy attaches.  In the third article in this series, we will discuss the IRS’s enforcement of levies and distraints. Notice and Opportunity for Hearing Before Levy The IRS may not levy any property or right to property of a person unless the IRS has notified that person in writing of his or her right to a hearing[1] before such levy is made.[2] The notice must be given not less than 30 days before the day of the first levy of property to recover the unpaid tax.[3] The notice must be given in person; left that the dwelling or usual place of business of…

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April 29, 2021
Procedural Issues
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Procedural Considerations on Collection (Levies and Distraints) – Part One: Introduction to Levies

On Levies and Distraints To Bill’s credit, his call of the IRS’s bluff that they would actually try to collect his long delinquent tax debt has not resulted in any enforced collection action three years since he failed to report capital gains on the sale of seven of his largest ostriches.  You had no love loss when the giant birds were sold, having been chased down and assaulted by two of their number in your younger and more vulnerable years—the scar on the back of your head bearing constant witness to your trauma. Nonetheless, Bill calls you one day to discuss the most recent notice that he received from the IRS in which they threatened—this time with a little more piss and vinegar (Bill’s words)—to seize his birds and everything else he held dear to himself.  Having explained this inevitability to Bill a number of times, you feel no real…

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April 29, 2021
Procedural Issues
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Procedural Considerations on Collection (Liens) – Part Three: Release or Discharge of a Federal Tax Lien

In the first article in our series on Federal tax liens, we discussed the IRS's authority, and limits thereto, with regard to imposing and enforcing liens against taxpayers.  In the second article in this series on liens, we discussed the procedure and effect of filing a Federal tax lien. In this third article, we briefly discuss the release, discharge, or subordination of a Federal tax lien. Certificate of Release and Certificate of Discharge The IRS must issue a certificate of release of any federal tax lien not later than 30 days after the day on which the liability has been fully satisfied or has become legally unenforceable, or a bond is furnished to and accepted by the IRS.[1] On the other hand, the IRS may issue a certificate of discharge of any property subject to a federal tax lien under four distinct scenarios. First, a lien may be discharged if…

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April 29, 2021
Procedural Issues
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Procedural Considerations on Collection (Liens) – Part Two: Effect of Tax Lien

As noted in the first article in this series, a federal tax lien is not valid as against any purchaser, holder of a security interest, mechanic’s lienor, or judgment lien creditor until appropriate notice of the lien has been appropriately filed by the IRS.[1] With respect to real property, the notice of lien must generally be filed only once in the office designated by the laws of the state in which the property subject to the lien is situated.[2] In the case of personal property, the notice of lien must generally be filed only once in the office designated by the laws of the state in which the property subject to the lien is situated.[3] Property is situated at its physical location or, for personal property, at the residence of the taxpayer at the time the notice of lien is filed.[4] In the first article in our series on Federal…

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April 29, 2021