If you owe money to the IRS, the IRS has many collection tools available to it to collect your unpaid liability, including the seizure of assets, the filing of tax liens, levying on your bank account and levying on your Social Security benefits.
In a recent case, Ronald W. Ewart sued the IRS for levying on his Social Security benefits in the amount of $10,000 stemming from a penalty. The IRS assessed this penalty against Ewart after giving him the opportunity to respond to a letter it sent to him. Although Ewart did respond to that letter, he did not directly address why the IRS should not assess the penalty in the amount of $10,000 against him and generally did not follow the requirements set forth in the letter to properly respond.
Instead, he demanded a response from the IRS regarding his stated intention to “comply conditionally” to the IRS letter and demanded a legal affidavit from the IRS. He made a similar claim in another letter to the IRS. Not surprisingly, the IRS did not respond to either letter.
After assessing the penalty in the amount of $10,000.00 against Ewart, the IRS began levying on his Social Security benefits and the balance due was ultimately paid in full. After the liability was paid, Ewart brought his lawsuit against the IRS.
After considering Ewart’s arguments, the United States District Court for the Western District of Washington dismissed Ewart’s lawsuit for failure to state a claim. Essentially, Ewart missed his opportunity to explain to the IRS why the penalty in the amount of $10,000.00 should not have been assessed against him.
Although he did respond to the IRS letters, he did not do so in a proper fashion. Unfortunately, this case is a classic example of why you need a qualified tax attorney to represent you before the IRS. If you do not timely or properly respond to an IRS letter, the IRS can disregard any arguments that you make that do not directly pertain to the issue at hand.
Specifically, if you make demands upon the IRS that are not allowed by or required by law (as Ewart did in this case by demanding an affidavit from the IRS) the IRS can ignore those arguments and assess the tax liability against you.
Have you received a letter from the IRS? Contact us, we can help.