The Powers of the Revenue Officer
In my practice I have discovered, and here summarize, 15 categories of the powers of the revenue officer. These “powers” can be formidable, but they can also be used constructively if you understand their nature and take the time to plan to use them to your best interests.
- Record Notices of Federal Tax Liens;
- Levy on bank accounts and garnish wages;
- Seizure and sale of real and personal non-exempt property;
- Issue summonses (to the taxpayer as well as third persons);
- Allow a short-term or long-term installment payment arrangement;
- Damage employment and business relationships;
- Void or challenge transfers to third persons;
- Refer the taxpayer to the Criminal Investigation Division and/or Examination Division;
- Institute jeopardy and/or termination assessments;
- Allow an audit reconsideration;
- Abate penalties,
- Indirectly assess the taxpayer by the use of Code Sec. 6020(b); assert big penalties for the failure to account for and pay over employment and withholding taxes;
- Recommend offers in compromise;
- Suspend collection due to economic or other hardship; and
- Label the taxpayer as an illegal tax protester (ITP) or potentially dangerous taxpayer (PDT).
The revenue officer can work with you or against you. Much depends upon your past history of communication; much depends upon whether good faith has been shown in dealing with the revenue officer.
Occasionally, you encounter a revenue officer with whom you simply cannot work. Either that person is out to make an example of you or is simply overzealous in his or her zeal to “protect the revenue.” When this occurs, you may have no choice but to talk to a bankruptcy specialist. Once a bankruptcy petition is files, the automatic injunction under the Bankruptcy Act will take effect and will stop the entire collection process.