The Internal Revenue Service did not always comply with statutory requirements when conducting seizures of taxpayer property, according to a new report that found a handful of instances of such violations.
The report, released Monday by the Treasury Inspector General for Tax Administration, did not identify any instances in which taxpayers were adversely affected by the violations TIGTA inspectors found, but it noted that noncompliance with the legal requirements could result in abuses of taxpayers’ rights.
TIGTA said it reviewed a random sample of 50 of the 747 seizures conducted from July 1, 2010, through June 30, 2011, to determine whether the IRS is complying with legal and internal guidelines when conducting each seizure.
In the majority of seizures, the IRS followed all the legal guidelines, and TIGTA did not identify any instances in which the taxpayers were adversely affected. However, in 11 seizures, TIGTA identified 14 instances in which the IRS did not comply with a particular requirement of the Tax Code.
In five instances, the sale of the seized property was not properly advertised. TIGTA found four instances in which the amount of the liability for which the seizure was made was not correct on the notice of seizure provided to the taxpayer. There were three instances in which proceeds resulting from the seizure were not properly applied to the taxpayer’s account, and two instances in which the required information relating to the sale of the seized property was either incorrect or not provided to the taxpayer.
TIGTA recommended that the IRS include an instruction in the Internal Revenue Manual that the newspaper advertisement must contain the same legal description of the property and conditions of sale that are shown on Form 2434. In response to the report, IRS officials agreed with the recommendation and plan to revise the Internal Revenue Manual accordingly.
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