FAQs on Liens, Levies, and Other Collection Activities Impacted by COVID-19
On its website, the IRS has posted frequently asked questions on the effect of COVID-19 on liens, levies, and other IRS collection activities.
Q. Will IRS Field Collection activities be modified during this crisis period?
A. IRS will suspend the issuance of any new NFTLs and levies initiated by field revenue officers during this period, unless there is an pressing circumstance. However, importantly, field revenue officers will continue to pursue high-income non-filers and perform other similar activities where warranted. Taxpayers should be aware that revenue officers do contact taxpayers by phone, and that the revenue officer will provide resources if asked, including a direct phone line to call to verify that they are an IRS employee.
Note that IRS does not:
- Demand that taxpayers use a specific payment method, such as a prepaid debit card or gift card. IRS will not ask for debit or credit card numbers over the phone. If a taxpayer owes taxes, they should make payments to the United States Treasury or review IRS.gov/payments for IRS online options.
- Demand that a taxpayer pay taxes without the opportunity to question or appeal the amount they say a taxpayer owes. Generally, IRS will first mail a bill if a taxpayer owes any taxes. Taxpayers should also be advised of their rights as a taxpayer.
- Threaten to bring in local police, immigration officers or other law enforcement to have a taxpayer arrested for not paying. IRS also cannot revoke a taxpayer’s driver’s license, business licenses, or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.
- Taxpayers who receive IRS phone scam or any IRS impersonation scam should report it to the Treasury Inspector General for Tax Administration at its IRS Impersonation Scam Reporting site and to IRS by emailing email@example.com with the subject line “IRS Phone Scam.”
Q. Is the Collection Statute Expiration Date (CSED) affected by the People First Initiative or COVID-19 relief?
A. No. The COVID-19 relief does not change the CSED. All activities affecting the CSED still apply based on law and regulation. IRS will continue to take necessary steps to protect all applicable statutes of limitations. In instances when statutes are in jeopardy of expiring, IRS encourages taxpayers to cooperate in extending such statutes. Otherwise, IRS will issue Notices of Deficiency and pursue other similar actions to protect the interests of the government in preserving such statutes. Where a statutory period is not set to expire during 2020, IRS is unlikely to pursue the foregoing actions until at least July 15, 2020.
Q. What about levies?
A. IRS will suspend new automated levies, and new systemic liens and levies during this period. IRS will not issue new levies unless there are pressing circumstances.
Q. What is the date that IRS considers a lien or levy new?
A. Beginning March 30, 2020, IRS suspended the issuance of levies and NFTLs. “New” levies and NFTLs would not be issued after that date, unless there are pressing circumstances.
Q. If IRS issues a release of levy, how long will it take until the funds are available to me?
A. Generally, IRS will mail or fax a release of levy to the levy source. The timeframe for the release to take effect will be dependent on mail and processing times once received by the levy source. If the levy source will accept a release of levy via fax, the taxpayer may provide a contact or fax number and request a copy of the release be sent via fax.
Q. Will levies and wage garnishments remain in place or will these be paused until July 15, 2020? Can the taxpayer request a pause? If so, how?
A. IRS will not automatically release levies. IRS will consider a taxpayer’s request to release a levy on a case-by-case basis if the levy is causing an economic hardship. “Economic hardship” means the levy prevents the taxpayer from meeting basic, reasonable living expenses. IRS may ask for additional financial information to determine if a levy is causing an economic hardship.
If the taxpayer is working with a revenue officer and wants to request a release of levy, he should contact the revenue officer. Taxpayers requiring a levy release who are not assigned to work with a revenue officer should call the number on the notice of levy.
If a taxpayer is unable to get through, he should fax the request to 855-796-4524. The fax should include their name, address and social security number. Taxpayers who filed jointly should include both social security numbers. In addition, taxpayers should include the name, address and fax number of the taxpayer’s employer or bank that is processing the levy. Note: This fax number is only used to address emergency levy release requests. Due to current limited staffing, IRS will not respond to other issues sent to this fax line.
Q. Will IRS file NFTLs during the suspension period?
A. Generally, IRS will not file new NFTLs unless there is a risk of permanent loss to the Government due to the expiration of a statute or other exigent circumstances. Previously filed NFTLs, however, may be refiled, amended, withdrawn, or released if appropriate.
Q. What happens with NFTL filings after July 15, 2020?
A. After the suspension period, IRS will resume making NFTL determinations and filing new NFTLs following standard procedures.
Q. Will IRS discharge property from the federal tax lien or subordinate its lien interest during the suspension period?
A. IRS will continue to process requests for lien certificates and issue the certificates based on each case’s merits. The timeframe to work these requests may be longer than normal due to resource constraints impacted by COVID-19.
Q. What should taxpayers do if they need a lien release, certificate of discharge, or have another lien issue?
A. IRS is processing all electronically submitted lien certificate applications (e.g. electronic applications for lien discharge) normally and assigning them within 10 days. To protect the health and safety of IRS employees and taxpayers, IRS is NOT processing lien certificate applications received at the Advisory Consolidated Receipts (ACR) site in Florence, Kentucky. IRS is working to reopen its offices and to restore mail service and will update this document as the situation changes. Taxpayers can also check IRS Operational updates.
IRS requests taxpayers use the E-Fax line for the ACR site (844-201-8382) for certificates such as: discharge of property from the federal tax lien; withdrawal of the NFTL; and subordination of the federal tax lien. Publication 4235, Collection Advisory Group Numbers and Addresses (PDF), has additional information on the process for submitting applications for lien certificates, and on related publications. Taxpayers and practitioners may also visit IRS.gov and search “Lien Certificates” for further information.
Q. What is a CP504 Notice?
A. The CP504 Notice lets a taxpayer know if they have an unpaid amount due on their account. If they do not pay the amount due immediately, IRS will seize (levy) their state income tax refund and apply it to pay the amount they owe.
IRS will still issue CP504 Notices during the relief period, but IRS will not issue the Final Notice of Intent to Levy Letter 1058 or LT11, which is required before a levy can be issued.
IRS will not issue Notices of Levy during the collection suspension period. This includes automated levy programs such as: The Federal Payment Levy Program; the State Income Tax Levy Program; and the Municipal Income Tax Levy Program.
Q. What should I do if I receive a CP504 Notice?
A. Pay the amount due shown on the notice. Taxpayers may pay their balance online or mail their payment to IRS in the envelope they received. Include the bottom part of the notice to make sure IRS correctly credits the account. Visit IRS.gov/payments for more information.
If a taxpayer can’t pay the whole amount now, they can resolve outstanding liabilities by entering into a monthly payment agreement. Visit IRS.gov/payments for more information about IRS payment options. Most taxpayers will qualify to apply for a payment plan or Installment Agreement online without needing to call or write to IRS.
Due to staffing issues, it may be difficult to get through to a representative. IRS is working to reopen its offices and will update this document as the situation changes. Check the IRS Operations updates regularly for the most up-to-date status.
Q. How does this initiative affect the Private Debt Collection program?
A. During the suspension period IRS will not forward new delinquent accounts to Private Collection Agencies (PCAs). PCA interaction with taxpayers is limited to inbound telephone calls (outbound calls only when requested in a voicemail or correspondence). When the taxpayer indicates their ability to pay was affected by the National Emergency, the PCA will place a hold on the account through July 15, 2020. The PCAs will not terminate or modify existing payment arrangements during the suspension period.
Q. Are taxpayers with payment arrangements made through IRS contracted PCAs allowed to suspend those payments during the COVID-19 suspension period?
A. Taxpayers can make payments on their account at any time. If a taxpayer is not able to make payments during the suspension period from April 1 to July 15, 2020, relief is provided. The PCAs will:
- Restrict outbound calls to only when the taxpayer requests a return call in correspondence or via voice message
- Not terminate or restructure an existing payment arrangement
- Suspend payment reminder or missed/late payment letters and telephone calls
- Continue to send reminder notices for the taxpayer’s preauthorized direct debit payments which includes instruction on how to cancel or change payments
Q. Can taxpayers request to have their PCA account transferred back to IRS?
A. Taxpayers can request in writing that their account be returned to IRS and have no further contact from the PCA at any time, which is a protection provided under the Fair Debt Collection Practices Act.
Q. Will IRS continue to work bankruptcy-related issues?
A. Yes. IRS will continue to file Proofs of Claim, address automatic stay violations, apply payments, and process and discharge orders.
Join Our Newsletter
Sign up to receive exclusive newsletters with the latest information affecting you and your organization.
SHARE THIS POST