ECONOMIC HARDSHIP POLICY

ECONOMIC HARDSHIP POLICY

Posted By: Jennifer O'Neill // Jun 21, 2016

Even though Automated Collection System (ACS) has various guidance regarding sections of IRM 5.19 for reporting accounts as currently not collectible (CNC) when economic hardship is verified, there are still reports of problems of ACS not acknowledging and adhering to these policies if the taxpayer has unfiled returns.  System Advocacy has had referrals indicating that ACS will not secure a Collection Information Statement from taxpayers with unfiled returns, consequently not “verifying” economic hardship and continuing to threaten taxpayers with levy actions.

Systematic Advocacy reports that, in an effort to correct these problems with Automated Collection System (ACS), the IRS has revised IRM 5.19 to say that a levy cannot be issued or a levy cannot be left in place to persuade a taxpayer to file a delinquent return.  This is based on a tax court opinion, Vinatieri v. Commissioner, 133 T.C.No.16 (Dec 21, 2009).

To correct these problems, Systematic Advocacy is asking that, should a representative run into this problem, that they submit issues and case examples to SAMS with the reference “VIN Case”, as they need more case-related examples of problems in this area.

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