Construction Industry Conference - Virtual-Article - Taxpayers' Rights and the IRM Pt 2

Article - Taxpayers' Rights and the IRM Pt 2

Pdf Summary

The article explains how practitioners can use Internal Revenue Manual (IRM) provisions and taxpayer-rights principles to advocate for clients in IRS collection matters.<br /><br />Before levying, revenue officers must consider the taxpayer’s individual circumstances, including financial hardship, compliance history, responsiveness, and efforts to pay. A levy that causes economic hardship must be released, and levies are generally barred while an installment-agreement request is pending or an agreement is active, as well as during specified appeal periods. The article also notes circumstances in which an IRS intent-to-levy notice may be inappropriate.<br /><br />For penalty abatements, the IRS announced that a new automatic exemption from penalty program will replace first-time abatement for eligible original returns for tax years 2025 and 2026. When reasonable-cause relief is denied, the officer must provide written notice and explain appeal rights; appeals containing new information must be reviewed and documented. Financial hardship may support collection relief or currently-not-collectible status, and verified hardship bars issuing or maintaining a levy to pressure a taxpayer to file.<br /><br />Before filing a federal tax lien, the IRS should consider whether filing or deferral is appropriate. The IRM identifies situations in which a lien should not be filed and allows deferral when supported by documented reasons and a follow-up date, including cases where filing could impede collection. A Collection Appeals Program request is the only appeal available before lien filing; after filing, taxpayers may also seek a Collection Due Process hearing.<br /><br />The authors encourage practitioners to read notices carefully, meet deadlines, document and submit information promptly, and escalate unresolved procedural concerns through IRS management. They emphasize patient, professional representation, clear client communication, and avoiding promises of specific outcomes.

Keywords

Internal Revenue Manual

IRS collection

taxpayer rights

tax levy

financial hardship

penalty abatement

reasonable cause relief

federal tax lien

Collection Due Process

Collection Appeals Program