This Internal Revenue Manual (IRM) section provides employees with directions for the levy process which is impacted by IRC 6330, IRC 6331 and IRC 6334 and the NFTL process which is impacted by IRC 6321. Levy and NFTL processes are also affected by the taxpayer bill of rights and by IRS policy statements. The procedures in this IRM are designed to ensure levy and NFTL actions we take are in compliance with law and policy.

Authorities relating to this section for Notice of Levy are found in the following code and regulation sections:

Policy Statements and Delegation Orders for Notice of Levy are found in the following IRMs:

The authority for Notice of Federal Tax Lien is found in the following code and regulation sections:

Policy Statements and Delegation Orders for Notice of Federal Tax Lien are found in the following IRMs:

The Director, Collection Policy is responsible for all policies within the lien and levy programs.

The Program Manager, Enforcement is responsible for development and delivery of policies within the lien and levy programs.

Managers are responsible for ensuring employees are duly delegated to issue Notice of Levy and for ensuring the levy actions are in accordance with policy and procedures.

Managers are responsible for ensuring employees are duly delegated to file NFTLs and that lien actions are in accordance with policy and procedures.

Employees that request a Notice of Levy are responsible for ensuring that all pre-levy actions have been taken and that levy issuance is appropriate.

Employees are responsible for ensuring a timely Release of Notice of Levy when account conditions warrant such release.

Employees authorized to make determinations regarding specific lien actions are responsible for ensuring procedures are properly followed.

Employees that request NFTL filings are responsible for providing accurate information.

Employees manually preparing Notice of Levy and NFTLs are responsible for ensuring the accuracy of the document.

Program Reports: The following reports are generated by management and can assist with evaluating levy and NFTL activity:

Program Effectiveness: Operational and program reviews are conducted to ensure case actions are timely and in accordance with the procedures in this IRM. Evaluative (EQRS) and national (NQRS) quality reviews and consistency reviews are routinely conducted.

National Quality Review System (NQRS), attribute 417, Managerial Approvals for Enforcement provides independent collection review information from which management may draw inferences regarding overall case quality for this attribute. See IRM 5.13.1, Embedded Quality Administrative Guidelines.

Certain notices of levy must be approved by managers. See IRM 1.2.2.6.3, Levy on Property in the Hands of a Third Party (not to include Levy Form 668-B).

Certain lien determinations must be approved by managers.

Programming safeguards are built into the ACS system to prevent a levy or NFTL from being generated on a module where the required notices have not been issued.

A levy is a seizure by the IRS of the taxpayer’s property and rights to property. A notice of levy is used by the Automated Collection System (ACS) to seize a taxpayer’s property, held by a third party. If issued a levy, the third party remits the property to the IRS, e.g., a taxpayer’s bank account, wages, commissions, retirement benefits, or money received as a contractor.

Terms and acronyms associated with the ACS levy program include:

A tax lien is a legal claim on an individual’s property for payment or satisfaction of a tax debt. It attaches to all property or rights to property the taxpayer has or acquires, whether real or personal, tangible or intangible.

The NFTL is a document filed in state recording offices to make the tax liability public and protect the IRS's priority as against other creditors of the taxpayer. For corporations, a NFTL may be filed with the Secretary of State, depending on state law.

Refer to IRM 5.19.1-1, Acronyms, Explanations and Command Codes for a complete list of acronyms.

The SSA Paper Levy Contacts web page provides Social Security Administration (SSA) contacts using the first three digits of the taxpayer's social security number (SSN). SSA contacts can confirm the receipt of the paper levy, the amount of the payment, the date payment was made, and the name and account number of the taxpayer to whom the payment was to be credited. See http://serp.enterprise.irs.gov/databases/who-where.dr/ssa-paper-levy-contacts.html

The National Levy Source Look-Up web page provides up-to-date levy source name and address information. See https://acsweb.enterprise.irs.gov/nlsweb/pages/nl08.xhtml .

The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3 ), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see . https://www.irs.gov/taxpayer-bill-of-rights. For additional information see IRM 1.2.1.2.36, Policy Statement 1-236.

A NFTL filing can be appealed (with certain restrictions) under Collection Due Process (CDP) procedures. The final notice of intent to levy can (also with certain restrictions) be appealed under CDP procedures. NFTLs and levies can also be appealed under the Collection Appeals Program (CAP). See IRM 5.19.8, Collection Appeal Rights.

Taxpayer Advocate Service, (TAS) cases may be initiated because of Notices of Levy or NFTLs. See IRM 13.1.7, Taxpayer Advocate Service Case Criteria, for guidance in determining if the taxpayer meets the criteria to be referred to TAS.

For more detailed procedures and guidance, see IRM 5.11, Notice of Lev,y and IRM 5.12, Federal Tax Liens.

If a taxpayer fails to pay the individual SRP imposed by IRC 5000A and Treasury Regulation 1.5000A-1 through 1.5000A-4, we will not file a Notice of Federal Tax Lien on any property of the taxpayer, or levy on any property of the taxpayer for the failure.

The individual SRP assessments are processed on the IMF (Individual Master File) under MFT 35 Tax Class 2. A mirrored individual SRP module(s) is posted to master file under MFT 65.

When manually preparing request for NFTL or Notice of Levy, employees must exclude any balances resulting from the individual SRP.

Large employers (generally, employers with at least 50 full-time employees, including full-time equivalents employees, in the prior calendar year) may be assessed an employer shared responsibility payment (ESRP) under IRC 4980H(a)if they do not offer health insurance with minimum essential coverage (MEC) to full-time employees (and their dependents) and at least one full-time employee receives a premium tax credit (PTC) under IRC 36B. The ESRP may also be assessed under IRC 4980H(b) if the employer offers MEC to it's full-time employees (and their dependents), but a least one full-time employee receives a PTC because the employer's insurance MEC was not affordable or did not provide minimum value.

Unlike the individual SRP assessments in which no enforced collection action is taken, the ESRP assessments may be included when issuing a levy or filing a Notice of Federal Tax Lien when an employer fails to pay the ESRP imposed by IRC 4980H.

The ESRP assessments are processed on the BMF (Business Master File) under MFT43.

The Taxpayer First Act amended IRC 7602(c)(1) and is effective for notices of third party contacts and contacts of third parties made after August 15, 2019. The Code now requires that IRS:

In all cases involving third party contact notices provided after August 15, 2019, or in which contacts with third-parties will occur after August 15, 2019, a notice meeting the new requirements must be provided. Employees may generally not contact a third party until the 46th day following the date of the notice. The notice must also include the tax period(s) at issue. Employees may issue new notices, if necessary. ACS employees will generally use the LT40, Notice to taxpayer of possible need to contact third parties - balance due/combo accounts, however ACS may utilize the Letter 3230 when module(s) to be included in the third party contact are in notice status.

When ACS employees intend to contact third parties in connection with the determination or collection of a tax liability of a taxpayer, they must verify the taxpayer was issued an advance third party contact notification letter that describes the intent to contact third parties and establishes a time frame for the third party contacts occurring on or after August 15, 2019 in accordance with IRC 7602(c)(1). Make sure the third party contact will occur within the one-year time frame described in the notice. Perform IDRS and/or ACS research first to verify the issuance of advance third party contact notification by identifying transaction code (TC) 971 action code (AC) 611 posted on an IDRS module. ACS employees will need to ensure the appropriate revision of the advance third party contact notification letter was issued, see IRM 5.1.1.12.1(2).

The taxpayer may have given consent to make third party contacts. See IRM 25.27.1.3.6Taxpayer Authorizes Contact with Third Party for procedures. In this situation there is no reason to give the taxpayer written advance notice of third party contacts. However, authorization should not be sought unless there is a high level of confidence that the 3rd party will have no fear of reprisal since to obtain the authorization the name of the 3rd party will necessarily be disclosed to the taxpayer thereby bypassing the reprisal procedures. See IRM 25.27.1.3.3, Reprisal, IRM 25.27.1.3.4Reprisal Determinations and IRM 25.27.1.3.5, Reprisal Notification Procedures for discussion of reprisal

See IRM 25.27.1, Third Party Contact Program for general IRC 7602(c) procedures to follow when contacting anyone other than the taxpayer regarding the determination or collection of the taxpayer’s tax liability and exceptions to third party contact notice requirements. . See IRM 5.1.1.12 , Third Party Contacts for detailed information on the statutory requirements and IRM 5.19.5.13 , Notification of Third Party Contactfor ACS specific guidance.

Releasing a levy issued to a third party (other than a government entity) is generally a third party contact, however the Service will not delay the issuance of a release of levy to meet the written Third Party Contact requirement as amended by the Taxpayer First Act.

ALP levies are not considered third party contacts and the related computer generated CDP notices do not contain advance third party contact notification. See IRM 25.27.1.2(2), Third Party Contact (TPC): Definition.

IRC 7602(c)(1) requires that the Service provide advance written notification of intent to contact third parties for each module that will be referenced in the third party contact. The taxpayer may have been given an LT11 (revised June 2020 or later), an LT40 (revised June 2020 or later) or an equivalent letter (issued after 8/15/19) for each module to be included on the levy. Equivalent TPC notification letters include:

IRC 6330 requires that the Service (except in the case of jeopardy levies, levies on State income tax refunds or disqualified employment tax levies (DETL) or federal contractor levies(FEDCON)) provide written notification in the form of a Collection Due Process (CDP) notice of its intent to levy on any property or right to property of any taxpayer at least 30 days prior to the levy and inform the taxpayer of the right to a CDP hearing. For more information on DETLs, see IRM 5.19.4.3.1 (11), Pre-Levy Requirements. For more information on federal contractor levies, see IRM 5.19.4.3.1.2, Federal Contractor Levy - "FEDCON" . ACS uses an LT11 (Notice of Intent to Levy and Your Notice of a Right to a Hearing) to inform taxpayers of our intent to levy and provide due process hearing rights prior to levy. When an LT11 is issued, a TC 971AC069 is entered on IDRS systemically for each module listed on the LT11. The taxpayer MUST have been issued an LT11 or equivalent on or after 1/19/99 in order to levy. Equivalent CDP notices include:

Issue LT11 or LT40 ONLY where the next action will be to levy. Review paragraphs (5) - (11) below, prior to issuing the LT11.

When an LT11 is issued, either manually or systemically, the case is reassigned to E3 with a 53-day follow-up to issue a levy as the next action. For new entity receipts, an LT11 is issued systemically during weekly analysis when the following conditions are met:

Ensure that there is a levy source available for ACS to send; see IRM 5.19.4.3.7, Choosing a Levy Source. If there is no levy source available, do not issue LT11. Document ACS Comments or AMS History and reassign using ACS to Contact or Investigation, as appropriate.

Before requesting an LT11, ensure that it is required on at least one tax module by checking the modules for "PRI FNL NOT" and "SEC FNL NOT" dates. If dates are present for all balance due modules, this may indicate that Collection Due Process (CDP) requirements are met; however, further analysis is required:

The LT11 must be sent certified/return receipt requested to the last known address. If the "UD" alert is present on ACSWeb or there is an indication of undelivered mail and no indication of processing through Address Research (ADR) additional research on IDRS is needed:

The required notice must be sent for each module included on a levy. If the case requires a notice for some but not all modules, you may exclude specific tax modules from the LT11 by following the procedures in Figure 5.19.4–1 or Figure 5.19.4-2. Proceed with levy issuance on the remaining modules.

Authorized taxpayer representatives must receive a copy of the LT11/LT73 including only the modules for which the representative is authorized to receive information. When a CAF indicator is present the ACS system will generate a PO11. Representatives will only receive a copy of the LT11 for tax periods in which they are authorized. Should the need arise follow the instructions in IRM 5.19.5.3.6, POA/CAF Letters and the RAF, to manually issue the POA copy of LT11 on ACS. To issue POA copy of LT11 on ACSWeb overlay the POA name and address on the Letters screen. Select LT11, click on "Authorized Representative" button, then click "submit" to send PO11.

A minimum of 46 days must generally elapse since the issuance of the LT40 before a levy is requested.

A minimum of thirty days must elapse between issuance of the LT11 and the date the levy is requested. However, the LT11 has a systemic 53-day follow-up to allow sufficient processing time for remittances or appeal requests. A waiting period is not required if collection is in jeopardy. See IRM 5.11.3.2, Jeopardy Levy Considerations. All cases where jeopardy is suspected to exist must be considered for referral to field Collection. Discuss with a manager any instance where it seems that the LT11 time frame seriously lessens our ability to collect a tax, notably on large dollar, in-business taxpayers. By working through ACS Support liaisons, a field group manager can be alerted to a pending reassignment and take immediate action to protect the governments interest.

Disqualified Employment Tax Levy (DETL) - A legislative change implemented on 3/11/2008 permits issuance of a levy without prior CDP rights for certain levies to collect employment taxes called "disqualified employment tax levies" . A warning message will be displayed on ACS: "Qualify for DETL?" when there is a delinquent employment tax module, 941 (mft 01), 943 (mft 11), 944 (mft 14), 945 (mft 16), 940 (mft 10), or CT-1 (mft 09); and there is an indication that a prior CDP levy hearing was held within 2 years from the beginning of the period to be levied. Employees must refer to the instructions in IRM 5.19.4.3.1.1 , Disqualified Employment Tax Levy (DETL), to determine if issuing the DETL levy is appropriate.

Federal Contractor Levy (FEDCON) - The Small Business Jobs Act of 2010 permits the IRS to issue al evy on a taxpayer prior to providing them with their Collection Due Process notice and hearing if the taxpayer is a federal contractor. Employees must refer to the instructions in IRM 5.19.4.3.1.2, Federal Contractor Levy "FEDCON" , to determine if issuing a FEDCON levy is appropriate.

Payment or filing requirement requests may be assigned to E2 or E3/E4 with the literals "CHKRTN" or "TPP2P " , e.g.:

Determine whether the taxpayer's promised payment or filing has been made. The employee making the arrangement establishes a follow-up 21 days after the first payment is due and enters in ACS Comments or AMS History the date and amount of each payment or required filing.

Check IDRS TXMODA for more recent information or on AMS check Module details. See IRM 5.19.4.3.4(6), Levy Determination.

The next action depends on the following:

Notices of levy are issued by ACS either systemically or through the processing of inventory in function/units E3/E4 and E5. You may access these ACS levy inventories:

Accounts in either the E3/E4 or E5 functions will be reassigned to the I4 function, with the action history literal "TOI4,,POTCLSR " , for manual case processing when there are no levy sources available for systemic levy issuance.

Function/unit E3/E4 issues levies as a next-case action, generally as a follow-up to an LT11. If a case appears on the follow-up date, then the taxpayer most likely has not responded.

When a levy is issued, the case is reassigned to function/unit E5 with a 47 day follow up. If a response has not been received to a previously issued levy by the follow-up date, E5 determines whether the next action should be either a letter to the levy source, issuance of another levy, or other action.

In processing written levy responses, ACS Support transcribes useful information and takes the next appropriate case action.

Any employee with ACS access may determine that the next action is to issue an LT11 or levy. If so, and the case is not in E5, E2, E3 or E4, take the appropriate action and reassign the case to the appropriate inventory. For instance:

This section lists items that must be checked before levying. Most research is done on ACS. If following the procedures in this section jeopardizes collection by delaying enforcement, discuss it with your manager. By working through ACS Support liaisons, a field group manager can be alerted to a pending reassignment and take immediate action to protect the Government's interest.

Scan ACS Comments, AMS History, account alerts, and history codes for anything that may affect the levy decision.

Tolerance -- Do not levy if the aggregate assessed balance, including accruals and excluding any individual SRP module(s), is less than the following:

Check IDRS CC TXMOD for additional assessments pending and CC IMFOL/BMFOL to confirm that no other modules with balance due are on the account and not in Status 22. If the balance is still below tolerance follow the procedures in the table below:

Accruals Only -- These cases either have accruals exceeding the deferral level, or the aggregate assessed balance, including accruals (plus modules not yet in IDRS Status 22, ACS) exceeds the deferral level. If the balance is accruals only, check IDRS for other pending delinquencies:

Invalid Taxpayer Identification Number (TIN) (identified with an asterisk to the right of the TIN) -- Levy source search routines match TINs; an invalid TIN for the delinquent taxpayer may match another taxpayer's valid TIN. Verify that all levy sources are for the taxpayer.

"IDTHF" Alert - Accounts with an "IDTHF" Alert do not qualify for systemic levy issuance. Prior to issuing a levy on an account with an "IDTHF" Alert, employees must review all levy sources to ensure that the income reported belongs to the taxpayer.

Changes to ACS balance:

Notification of Possible Third Party Contact - See IRM 5.19.4.2.3Taxpayer First Act, Third Party Contact Notification (TPC) IRC 7602(c)(1) , IRM 25.27.1, , Third Party Contact and IRM 5.19.5.13, , Notification of Third Party Contact.

Collection Due Process (CDP) – A date will be entered in the PRI FNL NOT field located on ACS Module Screen - S4, or the FNL Notice column on the Module Summary Screen located on ACSWeb or the SEC FNL NOT field on the Module Detail Screen on ACSWeb. A date entered in the FNL Notice column on the Module summary screen or a date in the SEC FNL NOT field on the Module detail screen identifies the posting of a TC971 AC069 after the issuance of a collection due process notice . The CDP criteria has been met when 45 days has elapsed since issuance of the notice. See IRM 5.19.4.3.1(1), Pre-Levy Requirements, and IRM 5.19.8.4, Collection Appeal Rights, for details on CDP requirements.

Pending Installment Agreement:

Pending/Posted Adjustments - For all accounts with a "TC470" alert, IDRS must be checked to determine which modules contain a pending or posted TC470. Exclude all modules with a pending or posted TC470 from levy issuance.

Undelivered mail -- If the "UD" alert is present on ACSWeb or comments show the LT11 was undelivered because of a bad address, and there is no indication of previous address research, additional research is needed

Limited Liability Companies (LLC) - These may have one or more members. If the entity has two or more owners, it may elect to be taxed as a corporation or a partnership. If the entity has one owner it may elect to be taxed as a corporation or be a disregarded entity. Usually, the entity name line ends with LLC. See IRM 5.19.1.5.14, LLC Accounts, for additional information on Limited Liability Companies.

Currently Not Collectible (CNC) modules -- When a new module comes to ACS and the account has other modules in currently not collectible status, basic information regarding those CNC modules is added to the Notes section on ACS by ACSS employees. Consider including CNC modules on the levy only if all of the following apply:

Military/Federal employees -- Levies on active and retired military and federal employees may require additional research and/or special processing. See IRM 5.11.6, Notice of Levy in Special Cases, in the Notice of Levy Handbook as directed below. Also, check the levy source listing on SERP for the latest mailing address. Levies on:

Offer in Compromise— (OIC) - Levy action is prohibited on cases with a pending OIC, (TC480 present on IDRS.) When it is determined an offer is processable, Automated Offer in Compromise, AOIC, will be updated and the affected modules will be updated to Status 71. There may be situations when the Status 71 will not generate.

If divisible taxes are involved, e.g., employment taxes and trust fund recovery penalties where the taxpayer pays a portion of the amount owed before filing a suit for refund, see IRM 5.11.1.4.9, Refund Litigation, which has more information about this infrequent occurrence.

Levy source data comes from a variety of sources, including:

IDRS displays levy sources using CC LEVYS. This contains sources from wage and information documents filed with IRS, those loaded to IDRS via tape exchange, or conversations with third parties. This information is kept only as long as a case remains on IDRS.

The ACSWeb Levy & Release displays levy sources from:

Levies on ACS Web identified as INFO are to be used for locator purposes only. These sources are:

IDRS provides ACS with levy sources when a case is established on ACS, and at least every three weeks afterward if a new levy source is available. When IDRS sends levy sources to ACS it places a marker on its record internally so that the same record is not transmitted to ACS again. When IDRS receives an update to a levy source the information is provided to ACS. ACS will update the levy source with the current cycle in the confirmed levy source field.

The yearly Information Returns Master File (IRMF) download will occur in February, followed by weekly downloads, on all open modules in ACS and other Collection statuses for new levy sources. If a new source is found, it is systemically loaded to the levy source data base.

To avoid pursuing low-value sources, ACS systemically drops the following levy sources from the IDRS levy updates that it receives and from archive searches of previous ACS closures done when a new case is received on ACS:

ACS displays up to fifteen levy sources; click on the ACSWeb Levy & Release screen to view any levy source. The Confirmed Levy field indicates when the source was loaded to an IRS database (IDRS, ACS, IRMF, TIF). When a case is established, sources are listed in a suggested priority order, based on the type of source. Within each grouping, sources are listed in descending order by dollar amount. This sequence is lost as the case is processed in ACS, with sources deleted and added where levy space is available. Initial order and unique literals displayed for each, where available, are as follows:

Priority levels, 00 through 10, are assigned to levy sources systemically and displayed in the Priority Level field. The priority level is determined by several factors however the main criteria is the source of income.

Other ACS display characteristics are literals TIF, TILT, and ACS.

For all levy sources, the Confirmed Levy field initially contains the cycle the levy source was loaded to IDRS. This field will systemically update when a levy source is updated, changed or confirmed.

A new six digit field is generating for levies loading after January 2005. The field is located directly above the first name line of each source on the ACS levy screen. On AMS the new field is called PRD EARN. The new field indicates the time frame the levy source data originated, see below:

A new field is generating for levy sources beginning 1/10/2009. On AMS the new fields can be located on the bottom right hand side of the levy detail screen directly above the "Modify Only" and "Confirm/Modify" buttons. On the ACS green screens, the field is located directly below the Priority Level field of each source on the ACS levy screen. For both AMS and ACS screens the fields are labeled as: C1P, C1G and C1Z.

On October 1, 2019, IPU 19U1067 eliminated the procedures for verifying and obtaining levy sources in IRM 5.19.1.4.4.2. To ensure alignment with IRM guidance, the procedures for ACS employees to add new levy sources based on contact with taxpayers is being removed. Additionally, ACS employees are no longer required to verify existing levy sources on ST22 cases when handling incoming calls.

Beginning October 1, 2017, ACS Support employees process taxpayer levy responses and only third party levy responses determined to be correspondence. All other third party levy responses are discarded as classified waste, IRM 5.19.6.15, Levy Responses. For information on what is determined to be third party correspondence see IRM 5.19.6.12(3), Receiving and Sorting incoming Mail, fifth bullet.

To ensure that levies are issued to the best known source ACS employees working inventory or correspondence must verify existing levy sources based on IDRS research prior to issuing a levy. Research current year IRPTR and current year taxpayer payments received (CCIMFOLP and RTR) to verify/obtain the most current levy source data available and delete older sources that are not present on current year IRPTR.

Employees working inventory or handling correspondence are not required to add, verify or delete levy sources on the following:

ACS Web has a feature that allows you to compare up to three different levy sources by selecting the levies you want to see and then the Compare button on the Levy and Release screen. When duplicates are identified, use the delete button. The history code will automatically use delete code 6 for duplicate.

When verifying levy source information, confirm each levy source on ACS when the confirmed indicator is N or when the confirmed indicator is Y and the confirmed cycle field, "CONF CYC" , has not been updated in the last 13 cycles. Delete those that are no longer valid or are duplicates. (See IRM 5.19.4.4.8(1)for procedures.)

If ACS displays fifteen levy sources and one must be added:

For the following sources, take other action to enforce collection or to locate the taxpayer:

When determining which levy to issue consideration should be given to the priority level of the levy source being issued.

See IRM 5.19.9.3.4 when considering using a FPLP levy source.

Levying on Social Security income is a last resort, not a first levy and, for simplicity, usually is done through FPLP. See IRM 5.19.4.3.10 (5)(b), Levy Types, for basic FPLP information. A manager must approve a manual levy to SSA that could attach more than the 15% through FPLP, see IRM 5.11.6.2.1, Social Security. A few facts to remember if considering this option:

An NL indicator in the Alerts Section means a name line discrepancy between the entity screen and delinquencies listed on the tax module screen. Check the P/S/J indicator for any intended levy source and the tax module screen for the entity name on each delinquency to ensure that the levy source chosen attaches to at least one of the delinquent modules.

Community property laws in some states may impact levy choice. Local management should provide guidance, if necessary.

Beginning in January 2009, employees are not able to issue levies using levy sources that do not meet postal standards for mailing. Employees receive a real time error message when attempting to issue levies on sources that do not comply with postal mailing standards. Employees need to research and correct the levy source address information before the levy can be issued. The corrected address will be validated during real-time processing. If the Code-1 Plus (C1P) value is "1" after validation, proceed with levy action. If the C1P value is other than "1" , a status message will generate indicating the invalid address condition and a levy cannot be issued. See IRM 5.19.4-4, C1P/C1G/C1Z Values and Meanings, for additional information on C1P, C1G, and C1Z values.

When a levy source contains a complete address or the levy source contains an "NLS IND = Y" it is not necessary to verify the levy source address via SERP. For levy sources with address errors and an "NLS IND = Y" , prepare a Form 4442 annotating the levy source information, name and address exactly the way it appears on ACS, and the error message received preventing levy issuance, and fax it to the appropriate levy source coordinator for corrective actions. A list of levy source coordinators can be found on SERP under Who/Where tab, Levy Source Information. Enter ACS history code OADT,10.

Centralized Address for Notice of Levy Issuance

The Levy Source Information page on the Servicewide Electronic Research Program (SERP) contains a database of local, regional and national levy sources submitted by participating sites and headquarters. Each has special levy instructions and useful information, e.g., a unique mailing address, contact person to verify employment, or fax number. See IRM 5.19.4.3.9, ACS Levy Sources on SERP, when adding levy sources to ACS and a complete mailing address is not known.

If an erroneous levy source address is an unrelated taxpayer residence or requires immediate attention because of disclosure, work stoppage, Taxpayer Advocate involvement, etc., do the following:

To avoid delays in routing and processing, it is important to ensure that levies are sent to the proper mailing address where levies are processed. The Servicewide Electronic Research Program (SERP) provides a National Levy Source (NLS) database lookup that can be found under the heading Levy Source Information. The NLS database is an electronic database of centralized levy source addresses.

Anyone who contacts a levy source by telephone or correspondence may identify a need to add, delete or update the NLS database.

Levy Source Coordinators will update the centralized levy source listing through the NLS system.

Methods of levy issuances:

Continuous Effect of Levy: A levy has continuous properties only for salary and wages. It attaches future paychecks, until the levy is released. Wages and salary include fees, bonuses, and commissions. All other levies only attach property and rights to property that exist when the levy is served. Non-continuous levies reach the property or assets for which the taxpayer has a fixed, determinable right. Also see IRM 5.11.6.2, Retirement Income, for additional information about retirement and benefit income.

Form 668-W was developed to use when individual taxpayers may be entitled to the exemption from levy. IRC 6334(a)(9) allows for a portion of an individual taxpayer’s wages, salary, and other income to be exempt by law from levy. This provision also extends to persons working for contract income except for government contractors.

Form 668-A was developed to use when the taxpayer is a corporation, partnership, or other entity (no exemption applies) and for levies on property held by third parties to collect taxes owed by individual taxpayers.

There are a few Automated Levy Programs that may affect cases on ACS:

In a few situations, a manual levy is needed because of special requirements for enclosures or mailing parts of the levy directly to the taxpayer, the computer system cannot issue a levy containing all of the requested information.

See IRM 5.19.4.3.4(17), Levy Determination, for situations that may require a manual levy, and the reference in IRM 5.11.6, Notice of Levy in Special Cases, for more detailed information about the special requirements in each situation.

When a manual levy is needed and one or more modules contains restricted penalty and/or interest, calculate and update IDRS.

When it is determined that a levy must be manually prepared, ensure that AMS history is clearly documented. AMS documentation must include all of the following:

A copy of the Notice of Levy, along with a print of AMS histories and ACSWeb action histories documenting approvals must be maintained in a paper case file.

When a Form 668-A(c)(DO) is prepared manually, the initiating office must also send a levy notification to the taxpayer.

A Form 12175 must be prepared when issuing a manual levy, see IRM 5.19.5.13, Notification of Third Party Contact, for documentation requirements.

A manager or lead must review and initial the manual levy before it is mailed. Additionally, the reviewing manager or lead must document the review in AMS history and on ACS by entering action history "OADT,00,MLEVYAP"

Employees must input action history "OADT,00,MLVYMLD" on the day the notice was mailed or faxed.

Employees must manually input of TC 971 AC 640 for each module included on a manual levy that does not already have a posted TC 971 AC 640. Request the manual input of TC 971 AC 640 only after the taxpayer's right to a post-levy CDP hearing has expired or the CDP hearing is resolved. Refer to IRM 5.19.1.5.19, Passport Certification in Case of Certain Tax Debts, for additional information.

To issue a levy on ACSWeb access the Levy & Release page and select the levy source. Once the source is selected, click the "issue levy" button.

To issue a levy on ACS input history code LVnn, where nn = number of the specific source on the ACS levy screen. Identify the levy source as part of this entry by entering an abbreviation of the levy source's name. The system assigns the case to E5 with a 47 day follow-up. Enter a different follow up date as necessary.

There are occasions when a real-time error message will generate in response to an "LV" action history. Employees are required to review the account, determine if the levy action is appropriate and update AMS histories.

Levies requested on levy sources that do not meet the new postal standards for mailing will no longer be allowed. Real time error messages will generate advising of the invalid condition requiring perfection. Employees will need to perfect the levy source in order to issue a levy to the source. If unable to perfect the levy source the source should be deleted.

If the liability is a result of a joint return and both husband and wife are employed, generally issue the first levy on the employer of the spouse receiving the larger income.

Issue multiple levies simultaneously if the aggregate balance on the ACSWeb Case Overview Screen is $2,500 or more, and more than one unique levy source is available, subject to the following limitations:

Managerial Approval-- Reassign accounts requiring managerial approval TOC0,,LVnn. Document ACS Comments or AMS History identifying which levy needs approval. The approving manager will approve the proposed levy action either by issuing the requested levy or by showing approval in ACS Comments or AMS History if a manual levy is required. Managerial approval is required when issuing levies on the following sources:

Managerial Approval is no longer required when issuing a levy to the same source on same assessment. (Refer to Delegation Order 5-3 (Rev 1) , see IRM 1.2.2.6.3.) Exercise caution when determining whether to reissue a levy, consider the following:

When issuing a levy to a Limited Liability Company (LLC) entity, a warning message generates. Employees will be required to confirm that the levy request is appropriate. Refer to IRM 5.19.4.3.4(15), Levy Determination.

If you cannot levy on all modules, e.g., one or more modules have not met due process requirements, on ACS follow paragraphs (a) through (d) and (i) or on AMS follow paragraphs (e) through (i) below:

When issuing a levy to a FPLP source, a warning message will alert employees to the fact that FPLP may already be levying this taxpayer. The message will be displayed on ACS in the following situations:

Levy sources must be recorded as third party contacts when a manually prepared levy is issued or when an outcall is made to confirm employment or an account. See IRM 5.19.5.13, Notification of Third Party Contact, for documentation requirements.

If a levy must be served quickly, prepare it manually and fax it to the levy source. (Confirm the source has fax equipment and will accept the levy this way.)

Prior to sending one or more LP61 letters simultaneously to secondary, unverified levy sources ensure that the taxpayer has received advance written notification of third party contact that meets the advance notice requirements of IRC section 7602(c). This can clean up the remaining levy file while awaiting a response to levy, thereby speeding overall case processing. Some things to consider in using these letters are:

When requesting a levy or an LP61 to a levy source that is non-employee compensation, add literals "Re: non-employee income" if space is available on the second name line. This will help the levy source locate necessary records.

If a telephone number for the taxpayer is available, you may, at any time, attempt telephone contact with the taxpayer before issuing a levy.

If there are no levy sources remaining, or none on which ACS may issue a levy, next-case action depends on what the site has done previously to contact the taxpayer. Also, various case characteristics, identified by issuance codes, balance due, type of tax, or such may dictate next-case actions. (See IRM 5.19.4.3.8, Next Action after Levy Response, for more specific guidance).

Levy responses are received by telephone or in writing. ACS Support employees process taxpayer levy responses and only third party levy responses determined to be correspondence. All other third party levy responses are discarded as classified waste, IRM 5.19.6.15. Levy Responses. For information on what is determined to be third party correspondence see IRM 5.19.6.12, Recieving and Sorting Mail(3), fifth bullet.

A call from a third party levy source can provide a more thorough response and a chance to solicit locator information.

For responses on cases no longer on ACS, research on IDRS to see the account status.

Notices of levy are sent with a business reply envelope addressed to the corresponding Support Site. ACS Support employees process taxpayer levy responses and only third party levy responses determined to be correspondence. All other third party levy responses are discarded as classified waste, IRM 5.19.6.15. Levy Responses. For information on what is determined to be third party correspondence see IRM 5.19.6.12, Receiving and Sorting incoming Mail (3), fifth bullet.

Most payments are processed through RPS, or to IDRS, using CC PAYMT. The payment amount will show as a pending transaction the next day. The ACS balance due is updated by IDRS with the next weekly update.

Levy responses without a remittance attached are sent directly to ACSS after the mail room opens them. Only responses determined to be correspondence will be worked, all others will be discarded as classified waste..

If the response to the levy requests that future levies be sent to a different address, see IRM 5.19.4.3.8, Levy Source Address.

If we receive stock certificates or negotiable instruments as a result of levy issuance, take the following actions to ensure safe handling of documents.

Processing instructions for various levy response situations are located throughout IRM 5.19.4.4.1 through IRM 5.19.4.4.10 .

Telephone contact helps us to clarify vague statements about employment or account status, and solicit locator information that often is not provided by third parties on written responses.

If the levy source says that the taxpayer is employed there, has an open account, or is currently a contractor, determine and document the reason the levy proceeds were not sent. Proceed with next action after levy response, see IRM 5.19.4.4.8, Next Action After Levy Response.

If no longer employed:

Use the procedures in IRM 5.19.4.4.3.1 to assist employers in determining the correct amount exempt from levy. Also use the procedures in IRM 5.19.4.4.3.1 if proceeds are substantially below the amount expected based on the taxpayers known income and probable exemptions.

To request a levy release on AMS, access the ACSWeb Levy & Release page, click on the levy source. On the drop down menu, select LP68.

To request a levy release on ACS, input History Code LP68,nn (when n=position of levy on ACS Levy Screen).

If the levy full pays the assessment but leaves a small accrual balance, see IRM 5.19.4.3.4(3) , Levy Determination, for tolerance instructions.

Look for other outstanding levies, matching up History Codes LVnn with subsequent deletions (DLnn) and other indications of response. Select LP68 in ACSweb or input LP68, Lnn, as necessary.

If another outstanding levy source indicates that proceeds will be sent soon:

Reset follow-up date by entering OADT,21, if necessary, to allow time for receipt of closing information from IDRS, usually with next weekend update

See IRM 5.19.4.4.10 for further background information regarding levy releases.

Determining the proper action after receiving a partial levy payment depends on:

When an account in E5 receives at least 2 payments within 90 days the account is systemically assigned to E7. If this is the second levy payment on a wage source, consider establishing a continuous wage levy agreement, even if the account resides in E7.

Partial payments can be secured from any levy source type. Determine the next appropriate action to take by using the following criteria:

If levy proceeds are substantially below the amount expected based on the taxpayer’s known income and probable exemptions, consider contacting the employer to determine whether the taxpayer is claiming too many exemptions or is allowing voluntary deductions to an extent that defeats the levy. (See IRM 5.19.4.4.7(7) , No Payment Levies, and Policy Statement P-5-29 of IRM 1.2.14.1.6, Policy Statements for Collecting Process Activities. )

If a second payment is not received on a Form 668-W levy when anticipated, or if the second payment differs significantly from the first so that it is difficult to know whether we can expect regular payments, follow up with the levy source.

If you are not able to follow-up or the source indicates the payments will be varied, establish a continuous wage levy agreement for the minimal amount that can be expected each month.

Review all partial pay responses for any pertinent taxpayer or levy source data per IRM 5.19.4.4.7(11), No Payment Levies.

After a second partial payment is secured on a Form 668-W, consider if the account should be reviewed for manual or systemic monitoring through IDRS as a continuous wage levy installment agreement, CTLV. Although not considered an installment agreement, these are loaded to IDRS as Status 60.

Provide for monitoring of continuous wage levy payments through IDRS Status 60 if:

Cases receiving payments through the FPLP program require special handling. Do not set the account up on a CTLV.

If later levy payments are likely to full pay the account within four months, input history code OADT,130,CTLV. After 4 months, if the account is not full paid, proceed with new levy analysis.

On combination balance due/return delinquency entities where a continuous wage levy agreement is a possibility, see if the return delinquencies qualify for TC59x with Closing Codes 25 (BMF), 26, or 28 (IMF). If they do, close the return delinquency modules, and establish continuous wage levy agreement. If they cannot be closed, establish the CTLV and move case TOI5.

Prior to establishing any continuous levy agreement determine if the amount received seems appropriate considering the taxpayer exemptions and filing status. If less than anticipated, contact the employer to determine whether the taxpayer is claiming too many exemptions or is allowing voluntary deductions to an extent that defeats the levy. (See IRM 5.19.4.4.3(4), Levy Responses: Telephone, and Policy Statement P-5-29 of IRM 1.2.14.1.6, Policy Statements for Collecting Process Activities.)

The CSED must be considered before establishing a continuous wage levy. A CTLV can be established if the earliest CSED is further than 18 months in the future. Request a review date:

When continuous payments are being received from multiple levy sources, the account must be manually monitored. Do not establish an agreement on IDRS, ST60. Follow the procedures in IRM 5.19.4.4.6.1.

If the case meets continuous levy agreement criteria:

If the account will not be full paid in four months and does not meet requirements for a continuous wage levy see IRM 5.19.4.4.8(4) , Next Action After Levy Response.

Levy responses without payment are the most common. They can be by telephone or in writing.

Form 668-W -- If the response is negative:

Form 668-A -- If the response is negative:

Some third parties say they cannot honor the levy and cite some detail about the levy form or process. If the source is good and can be reasonably accommodated, do so. Depending upon the situation, a site or Area Office liaison may need to call the source to discuss levy requirements. Prior to contacting the levy source ensure the advance written third party contact notification requirements are met.

Unable to process or similar statement may mean that the source was dividends, insurance company interest, Bureau of Public Debt, or other sources that should not have been issued. Often, the third party will enclose a detailed form letter explaining the reason for returning the levy. If the source is valid for ACS use and can be perfected, do so. Otherwise, document response in ACS Comments or AMS History and delete the levy source.

"Part-time employee" often means the employee earns less than the levy exempt amount. Document status in ACS Comments or AMS History and proceed with next action after levy response, see IRM 5.19.4.4.8, Next Action After Levy Response..

"Too many exemptions" means the taxpayer earns less than the levy exempt amount.

If the levy source questions some discrepancies between the entity information on the levy and their records, contact the third party to ensure the levy source is valid, then reissue as needed.

"Taxpayer in bankruptcy" requires documentation in ACS Comments or AMS History and reassignment to R4; use History Code TOR4,,BKRPTCY. If the levy was issued after the taxpayer filed for bankruptcy, and the proceeds were sent and processed, then a violation of the bankruptcy automatic "stay" occurred. Advise local management as the Insolvency Unit will need to expedite contact. Variations occur in state exemption laws that debtors may elect to use in a bankruptcy proceeding and in Standing Orders adopted by bankruptcy courts. This can result in differing local procedures among sites.

Reassign to R4 responses showing the taxpayer is deceased or has a military deferment.

On no pay responses question the caller or analyze correspondence for any pertinent taxpayer or levy information.

If the taxpayer is incarcerated, see IRM 5.19.1.5.7, Incarcerated Taxpayers, and proceed with next case action.

If the taxpayer is in a college, university, or other school, an issue may be raised about money in school bank accounts that is provided by the Department of Education for student aid. (See IRM 5.11.4.8, Schools' Bank Accounts, for processing instructions.)

Outright refusals to honor levies are rare. If it happens and the contact is by telephone:

Individual and multiple levy sources may be deleted at one time on the levy verification screen. Select "Delete" for all applicable sources and submit the request. The system will automatically generate deletion code "2" (see 2 below) when deleting from the levy verification screen. To delete a levy source using a deletion code other than "2" , view the levy source details on ACSWeb and click the "Delete Levy" button. A menu will open displaying the deletion codes (see 2 below). Click on the appropriate code and click on the delete button. It will generate the appropriate history code as shown in the example in 2 below.

Delete sources on ACS using History Code DLnn, where nn=number position of source on ACS Levy Screen, followed by one of the following levy deletion codes, then an abbreviation of the source’s name. Add to ACS any new information that the levy source provides. It is not necessary to also delete the source from IDRS. (See IRM 5.19.4.3.5(5), Levy Sources and ACS Display.)

Employees who receive levy responses but who are not authorized to request subsequent levies should do the following:

If the account will not be full paid in four months and does not meet requirements for a continuous wage levy (see IRM 5.19.4.4.6, Continuous Wage Levies - E7 Payment Processing), choosing the next action depends on factors such as:

If there has been no written or verbal contact with the levy source, consider the levy follow-up in IRM 5.19.4.4.9, Levy Follow-Up:

If there are additional levy sources, do a new levy analysis as follows See IRM 5.19.4.3.4:

If no levy sources are available, the case is in E5:

If there are no levy sources available and the case is assigned to other Contact, Investigation, Research, or Service Center function/unit, then other case processing has superseded levy. Enter levy response information in ACS Comments or AMS History , but take no other action.

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NC09 in (9) above does not apply to cases:

E5 cases are next case accessed if no response is received or processed by the follow-up date entered when the levy was requested.

Employees must be alert to other outstanding levies. You may need to partially or fully release levies or delay the next action because of other levies.

On AMS double click on the modules in the Module section. Review for transaction code TC670 DPC 05 for levy proceeds. You may sort the transactions by TC by clicking on the heading "code" or sort them by date by clicking on the heading "date" .

Check IDRS for recent payments. Levy proceeds are generally posted to an account without corresponding notation in ACS Comments or AMS History. Look for odd dollar amounts with a posting date at least several weeks after the levy issuance or for continuous and/or multiple payments in the same amount. Levy proceeds may be identified on IDRS with a Designated Payment Code (DPC) 05 on line after TC670 payment. However there may be instances where levy proceeds are applied without a DPC. Use RTR to determine the source of the payments before taking the next case action.

Initiate an LP59 follow-up only in the following circumstances:

If the account does not meet the criteria listed in item 4 above for LP59 issuance, then proceed with next action after levy response, see IRM 5.19.4.4.8, Next Action After Levy Response.

When a faxed levy release is necessary to expedite the processing of the release of levy and a return call is needed to provide the correct fax number, document ACS Comments or AMS History. In order to assist the next CR and facilitate a effective call resolution, documentation should include::

The primary purpose for issuing a Notice of Levy is to collect the delinquent tax liability. However, there may be some instances when a full or partial levy release is necessary.

When a taxpayer claims to be a victim of identity theft, follow IRM 5.19.21.2.3, Identification Theft and Disposition of Levy Proceeds, to determine if a levy release is warranted. When contact is from the Non-Owner of the TIN, follow IRM 5.11.2.3.6, Returning Levy Proceeds to ID Theft Victims – (SSN Owner), to determine if a levy release is warranted. Full and partial levy release instructions can be found in (8) below.

Levies are issued after the taxpayer has been given an opportunity to resolve their tax liability but failed to do so. Taxpayers will generally call us once they learn that a Notice of Levy has attached and the levy source will be sending us proceeds. Release of levy is not required for a levy that was issued prior to reaching resolution with the taxpayer unless it meets one of the criteria for required release listed in item (5) below.

A Release of Notice of Levy must be issued on modules when any of the following conditions apply:

A Release of Notice of Levy should be considered when the taxpayer states they have made a payment by credit card. Credit card payments are a source of guaranteed funds -- meaning the line of credit is authorized before the confirmation number is issued. Taxpayers can't cancel a payment once the transaction is completed. The transaction is complete when the taxpayer receives the confirmation number.

A Release of Notice of Levy should be considered when the taxpayer states they have made a payment using IRS Direct Pay. Generally payments made via IRS Direct Pay post within 48 hours. Unlike payments made with credit cards, taxpayers can cancel a payment made using IRS Direct Pay.

Prompt issuance of the levy release is essential. Per Delegation Order 5-3, levy release authority requires a minimum GS-5. Any employee who recognizes a case that meets release criteria must take the appropriate action to release the levy. A levy release determination on a Status 22 (ACS) account should be made by an employee with access to the ACS database, either directly or by telephone to someone who has access.

The levy source should receive the levy release in 7 to 10 days. If a release is needed to prevent over-collection, or to relieve hardship, manually prepare Form 668-D immediately and fax it to the levy source and/or the taxpayer. However, if the levy source will accept a verbal notification pending receipt of the mailed release, issue the release normally as described in item 3 above. See IRM 5.19.5.4(8) for e-fax workaround procedures when sending a "manual release" (668-D) from ACSWeb.The following are examples of when a levy release should be faxed:

Releasing levies that have been issued through an Automated Levy Program (ALP) such as the State Income Tax Levy Program (SITLP), the Federal Levy Payment Program (FPLP), and the Alaska Permanent Fund Dividend Levy Program (AKPFD) require special handling.

In some situations the taxpayer may insist on going to an IRS office to obtain a completed Form 668-D, Release of Levy. Enter in ACS comments or AMS History that a release is authorized or the condition for release (e.g., copy of a document, payment, etc.).

ACS generates some Letters LP68 systemically in weekly processing to cover situations where an ACS case with an open levy closes without employee action, e.g. a credit or offset. Systemic levy release occurs when:

In the past, accounts may have been transferred to the Queue (IDRS Status 24) when the entity did not meet the continuous wage levy agreement criteria, because payments were very small or irregular, and there were no other enforcement or contact options. Also, cases may have been removed from ACS systemically and assigned to the Queue or to currently not collectible status with closing code 39 (TC530-39), with a productive continuous wage levy still open. This happened because we didn't reach the case in E5 before systemic removal criteria took over. There is no mechanism to identify and release the levies in this situation. If the account eventually is fully paid, and the taxpayer or third party requests a levy release:

Occasionally, a taxpayer may prefer to let the full levy stand as an initial payment. Sometimes, a taxpayer may request a partial release, with regular levy payments substituting for a payroll deduction agreement. Encourage the taxpayer to set up a Payroll Deduction agreement or a Direct Debit installment agreement, as it benefits the taxpayer by reducing the likelihood of default and lessening taxpayer burden. However, setting up this type of agreement is acceptable when the taxpayer’s employer refuses to process a payroll deduction agreement. See IRM 5.19.4.4.6(9) , Continuous Wage Levies - E7 Payment Processing, for continuous wage levy agreement criteria.

All instances of over-collection resulting from multiple simultaneous levies must be reported to management to determine how they occurred. This information should be available to headquarters upon request, not to assign blame but to judge whether procedural or systemic improvements are needed to make the program work more effectively.

See IRM 5.11.2.4, Returning Levied Property to the Taxpayer, for information. Also, IRM 5.1.12.20, Manual Refund, has instructions for hardship situations where a manual refund of levy proceeds is warranted. IRM 5.11, Notice of Levy Handbook, and IRM 5.1.12.20, Manual Refund, are available on SERP.

Delegation Order 5–3 authorizes ACS Operations Managers to determine whether to return levy payments.

Generally a wrongful levy is one that attaches property (e.g., a bank account) to which the taxpayer has no rights. EXAMPLE: A levy source has paid funds to the Internal Revenue Service from an account of a non-liable party.

If the proceeds have not been forwarded, the levy should be released and no claim for return of levied property processed. Follow the levy release procedures outlined in IRM 5.19.4.4.10.

If the proceeds have already been forwarded, and it has been determined that returning the proceeds is appropriate, supporting documentation must be provided by the party other than the taxpayer or financial institution before the claim can be processed. This documentation must include:

When documentation is received, provide your manager with the information. Attach screen prints of all ACS Comments or AMS History (if applicable) and completed Form 5792 (Request for IDRS Generated Refund). The initiator will complete Form 5792 with ACS Operation Chief’s signature for concurrence in Section IV box 4 and 5 on the form as delegated in Delegation Order 5–3. Instructions for completing the Form 5792 can be found in IRM 21.4.4.5, Preparation of Manual Refund Forms

Phone contact with the designated ACS Support Compliance Liaison, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is required before faxing the request. If interest will be allowed on the returned proceeds, the ACS Support Compliance Liaison will provide the appropriate date for the calculation using COMPAD for Form 5792. Completed Form 5792, all supporting documentation, and ACS Comments or AMS History screen prints should be faxed by the initiator to the ACS Support Compliance Liaison, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

ACS Support Compliance Liaison confirms receipt of request by fax to the initiator within one business day, then verifies and processes the information. If the information is verified, ACS Support Compliance Liaison requests a refund on IDRS no later than the next workday. Refunds should be issued within 3 working days.

Policy Statement P-5-39 provides that the Service reimburse taxpayers for bank charges that result from erroneous levies. In addition to the bank's fee for processing levies, this includes charges for overdrafts directly caused by the levy. The claim must be filed with the Area Director or Field Director, Compliance Services who issued the levy within one year after the expense accrues.

Provide Form 8546 (Claim for Reimbursement of Bank Charges). Advise the taxpayer to send the completed Form 8546, along with a copy of the levy and proof that the bank charges have been paid, to the Service Center Collection Branch, ATTN: Claim Specialist.

The following criteria must be present in all cases:

Examples of circumstances that may result in reimbursement of bank charges include:

See IRM 5.19.6.12.4, Erroneous Levy, Reimbursement of Bank Charges, for further processing details. This reimbursement process is separate from the collection of any tax owed.

The Notice of Federal Tax Lien (NFTL) filing determination decision for ACS is a process of deciding whether to file or not file a NFTL. If the decision is to file and there is no applicable exception as outlined in IRM 5.19.4.5.1.1 , Determination Requirement Exceptions, then follow the filing criteria and thresholds found in IRM 5.19.4.5.3 .

IRC 6320 requires the IRS to ensure collection actions, including the decision to file an NFTL, balance the need for the efficient collection of the tax with legitimate concerns of the taxpayer that actions be no more intrusive than necessary. To that end, review the factors contained in this IRM section and related subsections to reach the appropriate decision.

Filing determination considerations are listed below. It is not an all-inclusive list but it, as well as this IRM as a whole, provides guidance for the varying circumstances experienced when working with taxpayers.

Do not file a NFTL when:

This section contains the instructions for pre-filing actions and filing criteria when the decision is to file an NFTL.

When a Notice of Federal Tax Lien (NFTL) will be filed on a taxpayer account containing only notice status modules:

For status 22 accounts where you have access to ACS, 15 or fewer tax modules will be on the NFTL request, no modules contain an unreversed TC470, and the case does not require manager approval for other reasons, e.g., a hardship CNC, input History Code FM 10. In other situations,

When NFTL filing requires managerial approval:

If the account contains both notice status and Status 22 modules and you have access to ACS, there are options for filing the NFTL. It depends on if and when the taxpayer had been issued an CP504 Notice or equivalent.

There are certain conditions which require special procedures when filing a NFTL. Cases meeting the criteria as listed below require the input of History Code FM10 twice and ACS Comments or AMS History must be documented accordingly. The duplicate FM10 entries cause ACS Comments or AMS History to be researched for unique filing instructions.

If the taxpayer owns real property other than the primary residence (e.g., vacation or rental property) and the NFTL filing is required, request an additional NFTL if the property is located in a county other than that of the primary residence.

If the taxpayer has a new address , and a NFTL is required, only enter the new address on IDRS using CC ENREQ in accordance with Rev. Proc. 2010-16, otherwise use the last known address, LKA, and document AMS history that the LKA was used because the criteria outlined in Rev. Proc 2010-16 was not met.

Where the address is a P.O. Box, attempt to obtain a street address, if possible, from the taxpayer or from a third party with current knowledge about the taxpayer. In ACS, consider an LP47, Address Information Request, to the post office, or call the current employer. Otherwise, use the P.O. Box rather than an uncorroborated street address.

IRC 6320 gives taxpayers the right to request a hearing after the filing of a Notice of Federal Tax Lien. The taxpayer must request a CDP hearing no later than 30 days after the expiration of five business days after the date the NFTL is filed. The date the NFTL is filed is the date the NFTL is received by the recording office. Because the Service does not ordinarily obtain this date from the recording office, the Service uses an estimated filing date on the Letter 3172 to provide the taxpayer with a "must file" date (the date by which the IRC 6320 hearing request must be submitted). The estimated filing date is calculated by adding 3 business days to the NFTL mailing date. In other words, the Service assumes that the recording office will receive the NFTL 3 business days after it is mailed. The "must file" date on the letter is then determined by adding 5 business days plus 30 calendar days to the estimated filing date. Letter 3172 is used to notify the taxpayer of their appeal rights and deadline for response. This letter MUST be issued to all taxpayers identified on the NFTL and to their authorized representatives.

There may be instances where the name on the NFTL does not agree with what is listed on the balance-due account.

If the entity has an invalid TIN, i.e., there’s an asterisk after the TIN, and a valid TIN is found, correct the Master File before filing a NFTL. An account with the corrected TIN should merge with the existing ACS case; then, file the NFTL. If a valid TIN is not found, use the invalid TIN and asterisk.

When it is evident that the NFTL is intended to reach an individual or corporate taxpayer operating under a trade name, both the individual and trade name should appear as the taxpayer's name.

See IRM 5.12.7.5.3, Limited Liability Companies, when filing an NFTL on a Limited Liability Company (LLC).

If multiple tax periods are present, but name line is different for each assessment, list each assessment separately with its related name line, so separate NFTLs are filed. This situation occurs frequently on IMF liabilities where taxpayers have divorced and remarried.

The names of third parties that may be shown on the Balance Due Notice (e.g., an accountant, "c/o" , etc.) should never appear on the NFTL. Do not enter the names of officers on an NFTL against a corporation.

When the taxpayer is a corporation, prepare the NFTL showing the words "a corporation" after the corporate name. When preparing the NFTL through ALS, "a corporation" will automatically appear on the printed NFTL when the entity type of corporation is selected during input. File the NFTL only in the personal property filing location unless it is known that the taxpayer owns real property in which case file an NFTL in the recording office where the real property is located.

When a taxpayer is a partnership, the NFTL should show the words "a partnership" after the partnership name AND list the names of all known general partners. When preparing the NFTL through ALS, "a partnership" will automatically appear on the printed NFTL when the entity type of partnership is selected during input. File an NFTL in the personal property filing location for the partnership. File in other locations if there is evidence that either the partnership or one or more of its general partners owns real property there.

IRC 6323(j) gives the Service the authority to withdraw a Notice of Federal Tax Lien (NFTL) under the following conditions:

Taxpayers may call in response to the NFTL filing CDP Letter 3172. Despite previous notices and other contact and collection actions, the taxpayer may feel that Letter 3172 is the first and only notification issued about the NFTL. This perception is not a basis for lien withdrawal. The text of Letter 3172 and enclosures are available on the Electronic Publishing website: http://publish.no.irs.gov/catlg.html.

Letter 3172 provides an ACS telephone number so we can explain the basics: why we file NFTLs, why we did so in this case if information is available, and its effect. This may resolve some taxpayers’ concerns and avoid unnecessary appeals. If detailed ACS information is not available, most often we filed using the routine criteria in IRM 5.19.4.5.2 , Do Not File Decisions. Why we file NFTLs and their effect are mentioned in IRM 5.19.4.5.1, Notification of Federal Tax Lien Determinations and Filing Criteria, as is a list of IDRS notices and ACS letters that refer to NFTL filing.

Determine from the taxpayer contact whether the NFTL filing was erroneous, or whether the taxpayer is requesting the withdrawal for other reasons. If the NFTL filing appears to have been erroneous on the Service's part, or if there is a significant urgency to the taxpayer's request, reassign the case TOR0 and alert your manager. Access the case immediately, contact the Advisory for guidance or assistance if necessary, and call the taxpayer within 48 hours

Examples of erroneous NFTL filing are

A taxpayer who had a NFTL filed after being granted an installment agreement may allege that such filing was not a condition of the agreement. Documentation including the Form 433D and history should be reviewed to determine if withdrawal should be recommended. See IRM 5.12.9.3.2(2), Withdrawals in Installment Agreements Situations, for additional information whether withdrawal should be recommended.

Denying the taxpayer’s request for NFTL withdrawal can be appealed under the Collection Appeals Program (CAP). See IRM 5.19.8.4.16, Collection Appeals Program (CAP) Procedures. for detailed information about how to process CAP requests.

Taxpayers have the right to appeal the filing of a Notice of Federal Tax Lien under Collection Due Process. See IRM 5.19.8, Collection Appeals Program, for detailed information about taxpayer appeal rights and how requests are submitted and processed. To help avoid a formal appeal, consider having the taxpayer discuss the issue with your manager. In filing an appeal:

See IRM 5.12.9 for more detailed information about NFTL withdrawals.

Under IRC 6325(a) a lien release must be issued within 30 days after determining that the taxpayer’s outstanding obligation covered by the NFTL (including any interest, additional amount, addition to the tax, or assessable penalty, together with any additional costs that may have accrued) is fully satisfied, unenforceable or supported with a bond.

The lien is not released until the liability is satisfied in some form (e.g., payment or tax abatement), becomes legally unenforceable, e.g., beyond Collection Statute Expiration Date - CSED, or the Service (under IRC 6325(a)(2) accepts a bond furnished by the taxpayer to ensure payment of liability.

When all accounts on the NFTL are satisfied, a record of satisfaction is downloaded to ALS which generates a lien release. This information then downloads to IDRS where a TC583 is posted to all affected accounts.

Answer general questions about lien releases and withdrawals, and requirements for each as it applies to the specific entity. For issues of a very technical or complex nature, or where the taxpayer/third party seeks an immediate lien release in exchange for payment, advise the taxpayer/third party to call the Lien Payoff/Release number found in the POD Listing on SERP.

See IRM 5.12.3.6 for information on partial release of liens. Refer all partial lien requests to CLO.

Inquiries may be received through correspondence or calls requesting information on what they need to do to get a lien ‘released’ or discharged in order to refinance their mortgage or perhaps they are selling their property and need the lien released to complete the sale. Employees can assist callers by providing them with information on how to apply for a Certificate of Discharge of Property from Federal Tax Lien or a Certificate of Subordination of Federal Tax Lien, depending on the circumstance. Additionally, the Advisory Unit Contact List is available on SERP, under the Who/Where tab by clicking on "Advisory Unit Contact List" .