7

The Right to Privacy

Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary, and will respect all due process rights, including search and seizure protections and a collection due process hearing where applicable.

What This Means for You

  • During a Collection Due Process hearing, an independent IRS Appeals/Settlement Officer must consider whether the IRS’s lien filing balances the government’s need for the efficient collection of taxes with your legitimate concern that the IRS’s collection actions are no more intrusive than necessary. IRC § 6320

  • During a Collection Due Process hearing, an independent IRS Appeals/Settlement Officer must consider whether the IRS’s proposed levy action balances the government’s need for the efficient collection of taxes with your legitimate concern that the IRS’s collection actions are no more intrusive than necessary. IRC § 6330

  • The IRS cannot levy any of your personal property in the following situations: before it sends you a notice of demand, while you have a request for a payment plan pending, and if the IRS will not recover any money from seizing and selling your property. IRC § 6331

  • The IRS cannot seize certain personal items, such as necessary schoolbooks, clothing, undelivered mail, certain amounts of furniture and household items, and tools of a trade. IRC § 6334(a)

  • There are limits on the amount of wages that the IRS can levy (seize) in order to collect tax that you owe. A portion of wages equivalent to the standard deduction combined with any deductions for personal exemptions is protected from levy. IRC § 6334(d)

  • The IRS cannot seize your personal residence, including a residence used as a principal residence by your spouse, former spouse, or minor child, without first getting court approval, and it must show there is no reasonable alternative for collecting the tax debt from you. IRC § 6334(e) Treas. Reg. § 301.6334-1(d)(1)

    The revenue officer must attempt to personally contact you and if you indicate the seizure would cause a hardship, he or she must assist you in contacting the Taxpayer Advocate Service if not providing the requested relief. IRM 5.10.1.7.2

    The IRS issued interim guidance that extends these protections to suits to foreclose a lien on a principal residence.  According to this guidance, the IRS should not pursue a suit to foreclose a lien on your principal residence unless it has considered hardship issues and there are no reasonable administrative remedies. See IRS Interim Guidance Memo SBSE-05-0414-0032.

  • As soon as practicable after seizure, the IRS must provide written notice to the owner of the property that the property will be put up for sale. Before the sale of the property, the IRS shall determine a minimum bid price. Before the property is sold, if the owner of the property pays the amount of the tax liability plus the expenses associated with the seizure, the IRS will return the property to the owner. Within 180 days after the sale, any person having an interest in the property may redeem the property sold by paying the amount the purchaser paid plus interest. IRC §§ 6335, 6337

  • If the IRS sells your property, you will receive a breakdown of how the money received from the sale of your property was applied to your tax debt. IRC § 6340

  • Under § 3421 of the Restructuring and Reform Act of1998 IRS employees are required “where appropriate,” to seek approval by a supervisor prior to filing a Notice of Federal Tax Lien. Section 3421 further requires that disciplinary actions be taken when such approval is not obtained. RRA § 98 3421

  • The IRS should not seek intrusive and extraneous information about your lifestyle during an audit if there is no reasonable indication that you have unreported income. IRC § 7602(e)

  • If you submit an offer to settle your tax debt, and the offer relates only to how much you owe (known as a Doubt as to Liability Offer in Compromise), you do not need to submit any financial documentation. IRC § 7122(d)(3)(B)

    For information, see Form 656-L, Offer in Compromise (Doubt as to Liability).