If collection of an unassessed liability is in jeopardy, the IRS may make an immediate assessment and pursue collection without the need to follow normal assessment and collection procedures. As soon as the jeopardy assessment is made, the tax, penalties and interest become due and payable per IRC 6851 and IRC 6861. See IRM 5.1.4, Jeopardy, Termination, and Quick and Prompt Assessments, for procedures for making jeopardy assessments.

Generally, if collection of tax is in jeopardy, a jeopardy assessment has already been made. There may be situations, however, where the tax liability has already been assessed through normal procedures before a jeopardy determination is made. In either situation, when collection of the tax liability is in jeopardy, the IRS may immediately proceed to collect by levy without waiting the usual 10-day period after notice and demand per IRC 6331(a) or the 30-day period after notice of intent to levy is issued per IRC 6331(d). See IRM 5.11.3, Jeopardy Levy without a Jeopardy Assessment, for guidance.

The following IRC sections provide authority for jeopardy and termination assessments and jeopardy levies:

The following regulations provide authority relating to jeopardy and termination assessments and jeopardy levies:

The following delegation orders pertain to jeopardy and termination assessments and jeopardy levies:

The Director, Collection Policy, is responsible for all polices relating to jeopardy and termination assessment and jeopardy collection initiated by Collection employees.

The Program Manager, Case Resolution Alternatives, is responsible for development and delivery of policies within jeopardy and termination assessment and jeopardy levy program.

Managers of revenue officers who request approval for jeopardy assessments and levies are responsible for ensuring the procedures are followed and employee actions are timely and accurate.

Revenue officers and Collection advisors are responsible for following the procedures in this IRM.

Field revenue officers use Integrated Collection System (ICS) to document case actions and to generate levy documents issued to third party levy sources.

The Collection Activities Report (CAR) 5000-24 records the total number of levies issued. See IRM 5.2.4.11, Levy and Seizure Report (Report Symbol No-5000-24). Jeopardy levies are not reported separately. The IRS has determined that levy data may be made available as national statistics, provided that such data will never be used to evaluate an employee or to suggest or impose production quotas or goals. See IRM 1.5.2, Managing Statistics in a Balanced Measurement System, Uses of Section 1204 Statistics.

CAR Report 5000-23, Section III- Operational Data, includes a line item which reports inventory and dispositions of miscellaneous situations, including jeopardy. See IRM 5.2.4-15, Description of Collection Workload Indicators Report No-5000-23 (C-23), Section III- Operational Data.

Management ensures program effectiveness through manager case reviews, territory, area and Collection operational reviews, and National Quality Review System (NQRS) data.

The area director and Counsel must approve jeopardy assessments initiated by Collection. See IRM 1.2.2.5.18, Delegation Order 4-21 (Rev.2) (formerly DO-219, Rev. 4), Jeopardy and Termination Assessments.

The territory manager and Area Counsel must approve jeopardy notices of levy. See IRM 1.2.2.6.3(20) and IRM 1.2.2.6.3(21).

The territory manager must approve levies issued within the 15-day waiting period following the end of the 30-day period after notice of intent to levy and notice of a right to a hearing. See IRM 1.2.2.6.3(17) and IRM 1.2.2.6.3(18).

ICS system has programmed safeguards to prevent a levy from being generated on a module where the required notices have not been issued.

26 CFR 301.6861-1(a), by reference to 26 CFR 1.6851-1(a), provides that jeopardy will exist if the IRS finds that the taxpayer:

The court may consider many factors in determining whether one of the three circumstances stated above is present. For example, the court may consider whether the taxpayer is involved in illegal activity. See Mueller v. Commissioner, 882 F. Supp. 1060, 1062 (S.D. Fla. 1995); Harvey v. United States, 730 F. Supp. 1097, at 1106 (S.D. Fla. 1990) (citing Young v. United States, 671 F. Supp. 1340 (S.D. Fla. 1987)). The court also may consider whether:

Only the area director has the authority to determine that a jeopardy assessment should be made. See IRM 1.2.2.5.18, Delegation Order 4-21 (Rev. 2) (formerly DO-219, Rev. 4), Jeopardy and Termination Assessments. Written approval by the Chief Counsel or their delegate is also required. See IRM 5.1.4, Jeopardy, Termination, Quick and Prompt Assessments, for procedures to recommend jeopardy assessments.

Objective facts must support the determination that collection is in jeopardy. The amount assessed must also be supported. For example, there must be a reasonable, factual basis for determining that the taxpayer received income despite prior tax returns reporting little or no income.

For income, estate, gift, and certain excise taxes, a statutory notice of deficiency for the jeopardy assessment must be issued within 60 days following assessment. See IRC 6861(b).

A statutory notice of deficiency for the termination assessment of income taxes must be issued within 60 days after the due date of the taxpayer’s return, regardless of whether the taxpayer files a return. See IRC 6851(b) and Perlowin v. Sassi, 711 F.2d 910 (9th Cir. 1983).

After a jeopardy assessment is made, the IRS is required to send notice and demand to the taxpayer for the amount of the jeopardy assessment. Regardless of whether the taxpayer has filed a petition with the Tax Court, the amount of the assessment must be paid within 10 days unless a bond is filed as provided in IRC 6863. See 26 CFR 301.6861-1(d).

The bond must be equal to the amount of the jeopardy assessment the collection of which the taxpayer is seeking to stay, plus interest. Upon the filing of such a bond, collection of the amount covered by the bond is stayed. See 26 CFR 301.6863-1.

Whenever levy is made without waiting the 10-day period after notice and demand required by IRC 6331(a), public notice of sale of the property seized shall not be made within such 10-day period unless IRC 6336 (relating to the sale of perishable goods) applies. See IRC 6335(b). If the area director determines that any property seized is liable to perish, the IRS may return such property to the owner upon their payment of the appraised value of the property or the posting of an acceptable bond. If the owner neither pays the appraised value or posts a bond, the IRS shall make public sale as soon as practicable after the seizure. See IRC 6336. See also IRM 5.10.1.7, Perishable Goods Criteria, Definitions, and Examples, IRM 5.10.1.8, Perishable Goods Pre-Seizure Development, and IRM 5.10.2.6, Perishable Goods, for more information regarding the seizure and sale of perishable goods.

In the case of a jeopardy assessment of income, estate or gift tax under IRC 6861, property levied upon and seized may not be sold until expiration of the period within which the taxpayer may petition the Tax Court for a redetermination of the assessment, or until the Tax Court decision becomes final. See IRC 6863(b).

Because of the urgency necessary to sell IRC 6336 perishable goods, such sales may proceed without filing a Tax Court petition.

The IRS should first attempt to obtain the taxpayer’s consent prior to a quick sale under IRC 6863(b)(3)(B).

For jeopardy assessments and seizures made under IRC 6862, where there is no Tax Court review, a different stay provision applies. IRC 6863(c) stays the sale of seized property until the district court’s determination under IRC 7429 becomes final.