5.19.9. Automated Levy Programs

(1) This IRM provides employees with directions and guidelines for the Automated Levy Programs. The program matches federal tax debts with state taxing authorities, municipal taxing authorities and federal agencies disbursing funds, such as, salary, pension, and vendor payments. The procedures in this IRM are designed to ensure that the levy actions we take are in compliance with law and policy.

(1) Authorities relating to this section include:

• IRC 6103 - Confidentiality and disclosure of returns and return information

• IRC 6330 - Notice and opportunity for hearing before levy

• IRC 6331 - Levy and distraint

• IRC 6332 - Surrender of property subject to levy

• IRC 6334 - Property exempt from levy

• 26 CFR 301.6331-1 - Levy and distraint

• 26 CFR 301.6332-1 - Surrender of property subject to levy

• 26 CFR 301.6334-1 - Property exempt from levy

• 26 CFR 301.6343-1 - Requirement to release levy and notice of release

• 26 CFR 301.6343-3 - Return of property in certain cases

• Rev. Proc.2010-16 - Definition of Last Known Address

(1) The Director, Collection Inventory & Selection is responsible for all policies and procedures within the Automated Levy Programs.

(2) Campus employees are responsible for following the procedures in this IRM.

(1) Program reviews are periodically performed by Automated Programs to determine whether IRM guidance requires clarification or revision.

(2) Management will ensure program effectiveness through program and operational reviews conducted by Automated Programs.

(1) Accounts subject to the Automated Levy Programs are identified by various transaction codes and indicators.

(1) The most commonly used acronyms used in this IRM are shown below.

(1) The following resources provide additional information for working ALPs.

• IRM 5.19.1, Balance Due

• IRM 5.19.4, Enforcement Action

• Servicewide Electronic Research Program (SERP) website.

(1) Automated Levy Programs are divided into four categories:

• State Income Tax Levy Program (SITLP) – attaches to state income tax refunds

• Federal Payment Levy Program (FPLP) – attaches to federal disbursements due an individual or business, such as, retirement, vendor/contractor payments, and social security

• Alaska Permanent Fund Dividend Levy Program (AKPFD) – attaches to the Permanent Fund Dividend distributed by Alaska

• Municipal Tax Levy Program (MTLP) – attaches to local income tax refunds

Note: See IRM 5.19.4, Enforcement Action, for procedures related to levies.

(2) Each levy program selects modules using slightly different criteria. Bankruptcy, Installment Agreement and Offer in Compromise accounts are excluded from the ALPs.

(3) Agreements or a memorandum of understanding have been established with Bureau of the Fiscal Service (BFS) for FPLP, each state for SITLP and AKPFD and each municipality or municipality agency for MTLP.

(4) The procedures in this section are specific to ALPs such as:

• Specific information on each program

• Levy identification

• Notices issued by each program

• Steps to release the account from the levy program

(5) Other issues such as can't pay and don't owe are covered throughout IRM 5.19, Liability Collection.

(6) Correspondence and notices for these programs will contain one of the following Automated Collection System (ACS) telephone numbers:

• 1-800-829-7650 for accounts with a business operating division (BOD) code of Wage and Investment (W&I)

• 1-800-829-3903 for accounts with a BOD code of Small Business/Self-Employed (SB/SE), Large Business and International(LM&I), or Tax-Exempt/Government Entities (TE/GE)

• 267–941–1004 for accounts with a universal location code (ULC) 98 indicating an international address; regardless of BOD

(7) ALP notices only reflect the balance due as of the date of the corresponding TC 971 that indicates an ALP notice was issued. These notices, however, advise the taxpayer to pay the balance within 30 days. Since the notices cannot/do not reflect a future balance, a systemic grace period is provided for calculation of interest and failure to pay.

(8) Taxpayers may contact Compliance Services Collection Operations (CSCO), Accounts Management (AM), a Taxpayer Assistance Center (TAC), or the Taxpayer Advocate Service (TAS) to resolve ALP issues. These contacts do not have to be referred to ACS unless:

• The account is in Status 22 and you do not have access to ACS.

• You are unable to resolve the case in accordance with your organization's delegated authority for case disposition (e.g., returning levied property, installment agreement, CNC 530 cc 24–32, etc.) and dollar criteria.

• The taxpayer is calling AM with specific ALP concerns. If the taxpayer is calling about issues other than ALP (i.e., explanation of their account, payments, current year refund calls with federal or state refund offset, etc.), AM should resolve the taxpayer issue following normal processing procedures.

(9) Before disclosing any tax information, you must be sure you are speaking with the taxpayer or authorized representative. See the Taxpayer Authentication guidelines in IRM 21.1.3, Operational Guidelines Overview. For ACS representatives, see Electronic Automated Collection Service Guide (e-ACSg) for a guide to utilize in addressing all compliance issues and controlling the incoming call conversation.

(10) ALP levies are not considered third-party contacts and the CP generated Collection Due Process (CDP) notices do not contain advance TPC notification. See IRM 25.27.1.2(2), Third-Party Contact (TPC): Definition.

(1) The following types of tax and collection status can be selected for levy through SITLP:

• Master File Tax Code (MFT) - 29, 30, 31, 55

  Note: Individual Master File (IMF) only

• Master File and Integrated Data Retrieval System (IDRS) Collection Status Codes - 22, 23, 24, 26, and 53 (with closing codes 03, 09, 12, 39, and hardship codes 24–32)

• ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(2) Only valid social security numbers (SSNs) are included in the SITLP.

(3) Each module whose current status is one of the above, must have a previous Status 58 to be included in SITLP. If there is not a previous Status 58, then there must be a TC 971 action code (AC) 035 or AC 069.

(4) Each module included in the SITLP will have a TC 971 AC 600 posted.

• This TC is an information only transaction which indicates that the levy has been served.

• This TC posts to each module that is included in SITLP annually even if there is a prior TC 971 AC 600.

• Module(s) that do not have a current year TC 971 AC 600 will not be on the levy file to the state.

(1) Modules meeting the criteria below are not subject to SITLP.

(2) All entities that include one or more of the following UNREVERSED TRANSACTION CODES in any balance due module

(3) Any module that has one of the following UNREVERSED TRANSACTION CODES

(1) SITLP has designated SITLP Coordinators located in Austin, Fresno and Kansas City. A current listing of the SITLP Coordinators can be found on the Servicewide Electronic Research Program (SERP) web site under the Who/Where tab. The names and phone numbers are for internal use only. Taxpayers should NOT be referred to the SITLP Coordinators.

(2) The SITLP Coordinator is the contact point for the states and the IRS Governmental Liaison (GL) for each state.

(3) SITLP Coordinator duties and responsibilities include, but are not limited to:

1. Resolving erroneous and wrongful levy situations. All manual refunds requests should be worked within 5 business days of the IRS received date.

2. Update the Headquarters' manual refund log located on the shared drive database.

3. Maintain a file of manual refund requests and documentation received. This file should include any requests from the previous 12 months.

4. Completing various other miscellaneous duties related to SITLP processing, including contacts with the state's officials and the governmental liaisons.

(1) Pursuant to IRC 6330, SITLP will systemically issue a notice to the taxpayer, but unlike other notice requirements under IRC 6330, SITLP notices are "post-levy" notices. IRC 6330(f) requires that any taxpayer levied under SITLP shall be given an opportunity for a Collection Due Process (CDP) hearing within a reasonable amount of time after the levy if that levy is the first levy made with respect to a particular tax and tax period.

(2) As a result of the Restructuring and Reform Act of 1998 (RRA 98) and IRC 6330, a post-levy notice, CP 92, Seizure of your state tax refund and notice of your right to a hearing, was developed.

(3) The following TC combinations will generate the CP 92:

• TC 971 AC 600 and a TC 670 designated payment code (DPC) 20

• TC 971 AC 600 and a TC 670 DPC 21

• TC 971 AC 600 and a TC 706 (The TC 706 would be a result of a TC 670 DPC 20 that overpaid an earlier SITLP tax period.)

(4) These notices are mailed by certified mail and contain the following inserts:

• Publication 594, The IRS Collection Process

• Publication 1660, Collection Appeal Rights

• Form 12153, Request for a Collection Due Process or Equivalent Hearing

• Return envelope

(5) The CP 92 also provides an ACS telephone number for assistance. See IRM 5.19.9.2.1, What are ALPs?. These telephone numbers are available for taxpayers to resolve their tax accounts or exercise their appeal rights.

(6) A TC 971 AC 069 will systemically post on each module when a CP 92 is generated.

(7) If a taxpayer previously received a CDP notice for any tax period(s) included on the SITLP levy, then a CDP notice will not be issued for those tax periods, unless there was an additional assessment after issuance of the CDP notice.

(8) On joint liabilities, both taxpayers will receive a CP 92. A separate notice is issued to each taxpayer in accordance with RRA 98 Section 3201(d), even if the taxpayers live at the same address. Two TC 971 AC 069s will post to the primary SSN; however, the second TC 971 AC 069 will include the secondary SSN in the cross-reference (XREF) field.

(9) A separate notice will not be issued if there are problems with the name line or SSN as it relates to the secondary taxpayer. This includes:

• The secondary taxpayer is deceased.

• The secondary taxpayer SSN is invalid.

• There is no secondary name in the name line.

• The name line only gives the first name of the secondary taxpayer.

• There is something that makes the secondary name incomplete or indecipherable.

(1) When a SITLP match occurs and levy proceeds are received from the state, a TC 670 DPC 20 will post to the earliest tax period identified in the SITLP file sent to the state. If the amount overpays the earliest tax period, it will systemically offset (TC 826/706) to the next SITLP module(s) whose balance was included in the levy or to other balance due tax periods as appropriate.

(2) In some situations, SITLP payments are manually applied or transferred. These manual SITLP payments are posted with a TC 670 DPC 21.

(3) SITLP levy proceeds are applied to the taxpayer account prior to issuance of the CP 92.

(4) Generally, it takes up to 4 weeks from the time the state receives a SITLP levy file until the time the SITLP levy proceeds are applied to the taxpayer's account. Since this is an automated levy process, timing issues may delay the process even longer.

(1) Taxpayers may contact CSCO, AM, or TAC to resolve SITLP issues. These contacts do not always have to be referred to ACS. See IRM 5.19.9.2.1, What are ALPs?.

(2) If contacted by a taxpayer, explain that the state tax refund was levied to satisfy a federal tax debt. The call should be considered a regular account call which will require explaining the assessment, discussing payment of any remaining balance, granting an installment agreement, or securing financial information to determine ability to pay. All of these procedures are covered in IRM 5.19.1, Balance Due.

(3) SITLP contacts are often the result of the taxpayer receiving a notice from the state that their state tax refund was levied. Since payments may take up to four to six weeks to post, you may not see the TC 670 DPC 20 posted to the taxpayer's account. Be sure to check for a current year TC 971 AC 600 to identify active SITLP accounts. In some cases, you may have to ask the taxpayer for a copy of the letter issued by the state. If a copy of the letter has to be secured, contact should be made with the appropriate SITLP Coordinator based on the state that the taxpayer resides in. DO NOT contact state taxing agencies.

(4) During filing season, several calls are received from taxpayers asking why IRS levied their current year state refund when their federal refund was offset to satisfy the same liability. This is primarily due to the 4 to 6 weeks it takes for a non-EFTPS SITLP payment to post to a taxpayer's account. Advise the taxpayer that there was a balance due when the SITLP levy was issued, but that payment has not yet posted to their account. Since the federal refund has been offset from their current year account and full paid the balance, when the SITLP levy payment is received, it will be refunded to the taxpayer as long as there are no other outstanding balances.

(5) Refer taxpayer to the Taxpayer Advocate Service if appropriate per IRM 5.19.1.3.2, For All Employees, and IRM 5.19.5.7.2, R2 - Taxpayer Advocate Service/Congressionals.

(6) If the taxpayer wants to appeal the levy action with the Office of Appeals, see IRM 5.19.8, Collection Appeal Rights.

(7) Erroneous levies are handled by the SITLP Coordinator. See IRM 5.19.9.3.7, Returning SITLP Payments.

(8) Non-liable spouses may file a "wrongful levy" claim on a SITLP levy. A wrongful levy for SITLP would be when a portion of the state refund is attributable to the non-liable spouse's income only and the non-liable spouse may be entitled to have a portion of the money refunded. See IRM 5.19.9.3.7, Returning SITLP Payments.

(1) The state may send a state refund to IRS erroneously. When this occurs, the state will request a return of the refund through the Campus Collections SITLP Coordinator. See IRM 3.17.10.3.2(8), Receiving Unidentified Remittance Cases.

(2) The state representative will contact the appropriate SITLP Coordinator when a refund situation is identified and will prepare a memorandum requesting the required adjustment. This memorandum will be mailed, faxed or e-faxed to the SITLP Coordinator. The request will contain all entity information, as well as, the specific amount of the refund.

(3) Wrongful levy claims are handled administratively, but non-liable spouses have the option to file a civil wrongful levy suit if the account cannot be resolved administratively. See IRM 5.19.9.3.7.1, SITLP Wrongful Levies.

(4) SITLP payments cannot be returned if the payment created an overpayment and was subsequently refunded to the taxpayer. Research must be performed to ensure that the money remains available to be returned. This research may involve tracking the levy proceeds from module to module.

(5) The return of levy proceeds requires special handling in accordance with IRC 6343 (b) and IRM 5.11.2.4, Returning Levied Property to the Taxpayer.. The return of erroneously levied proceeds is subject to a statutory time period. If the date of levy payment was on or after March 23, 2017, the request must be made before the expiration of 2 years starting from the date of such levy payment. The payments may be returned by the Service without a request if the statutory time period for requesting a return of the levy proceeds has not expired. SITLP levy payment dates should be verified before returning the payment. .

(6) There may be other instances where the return of SITLP levy proceeds is warranted. The return of levy proceeds requires special handling. See IRM 5.19.4.4.11, Levy Release: Returning Levied Property.

(7) Do not refer taxpayers to any SITLP Coordinator or ACS Support Liaison.

(1) IRC 6331(h), as prescribed by the Taxpayer Relief Act of 1997 (Public Law 105-34) Section 1024, authorizes the Internal Revenue Service to issue continuous levies on certain federal payments.

(2) The law allows the IRS to levy up to fifteen percent (15%) of specified payments. Specified payments include any federal payment other than a payment for which eligibility is based on the income and/or assets of a payee.

(3) IRC 6331(h)(3) allows the IRS to levy up to one hundred percent (100%) on any specified payment due to a vendor of property, goods or services sold or leased to the Federal government. The 100% levy increase is incorporated into the FPLP for federal contractor/vendor payments.

(4) BFS is the disbursing agent for many of the federal payments that can be levied. The Defense Finance and Accounting Service (DFAS) and the United States Postal Service (USPS) are two other disbursement offices that also administer certain payments through BFS TOP.

(5) FPLP is a paperless ALP the IRS has implemented with BFS that will systemically attach certain federal payments made or administered by BFS.

(6) The first phase of the FPLP was implemented in July 2000. FPLP is being phased in as different federal payments become eligible for levy through the program.

(7) The interagency agreement between the IRS and BFS provides for certain Federal payments disbursed or administered by BFS to be systemically levied. BFS is the levy source for all levies issued through the FPLP — not the Federal payment agencies. The following Federal payments are subject to the FPLP:

1. Civil Service or Federal employee retirement annuities administered through the Office of Personnel Management (OPM) Civil Service Retirement System (CSRS) and Federal Employee Retirement System (FERS). The FPLP will levy 15% of the payment.

   Note: The FPLP does not levy the annuity payments in the Federal retirement Thrift Savings Plan (TSP).

2. Treasury disbursed Federal civilian agency (non-Defense) contractor/vendor payments. The FPLP will levy 100% of the payment.

3. Non-Treasury disbursed Federal civilian agency contractor/vendor payments by the Army Corp of Engineers, and the United States Postal Service (USPS). The FPLP will levy 100% of the payment.

4. Federal employee travel payments - advances and reimbursements. The FPLP will levy 15% of the payment.

5. Federal (civilian) employee salaries administered by the salary paying agencies (SPA): USDA National Finance Center (NFC), Department of the Interior's National Business Center (NBC), USPS, General Services Administration (GSA), and the Defense Finance and Accounting Service (DFAS).

   Note: DFAS, as a SPA, pays out some Federal civilian employee salaries, as well the Defense civilian employee and the military uniformed active/reserve member salaries and retiree payments. The FPLP does not include the military uniformed services members' salaries.

   Note: See Exhibit 5.19.9-2, FPLP - Federal Employee Salary Paying Agencies - NFC, NBC, GSA, DFAS , for the listing of the Federal agencies whose payrolls are administered by these salary paying agencies. Federal employee salaries will be levied for 15% of the gross wages or salary remaining after current taxes, health insurance premiums, retirement contributions, and, if applicable, court ordered child support payments are deducted. There should be no other deductions taken into consideration for the 15% calculation.

6. Social Security Administration (SSA) benefit payments under Title II of the Social Security Act, aka Federal Old Age, Survivors and Disability Insurance (OASDI) benefits. (The exceptions are disability insurance payments, dependent child benefits, claims for lump sum payments, and payments that have partial withholding to repay an SSA benefit overpayment.) The FPLP will levy 15% of the payment.

   Note: Supplemental Security Income (SSI) payments are not subject to the FPLP.

7. Department of Defense (DoD) contractor/vendor payments paid through the Defense Finance and Accounting Service's (DFAS) 20 payment systems and sites. Each payment system and site were implemented into the FPLP at various times. FPLP will levy 100% of the payment. Prior to April 8, 2012, some of these payments may have been levied for 15% of the payment.

8. Centers for Medicare and Medicaid Services (CMS) - Medicare Parts A, B, C and D provider and supplier payments. Medicare Parts A and B payments disbursed through the CMS' Healthcare Integrated Government Ledger Accounting System (HIGLAS) are in the FPLP, FPLP will levy 100% of these payments. Medicare Parts C and D payments are disbursed by the Treasury Department and are in the FPLP. On June 19, 2015, the FPLP levy authority on Medicare provider/supplier payments increased to 30% of the payment, prior to that date the payments were levied at 15%. This increase was due to the Achieving A Better Life Experience (ABLE) Act of 2014, Provision 209. The Medicare Access and CHIP Reauthorization Act of 2015 increased the amount of the federal payment levy for Medicare Providers from 30% to 100%, this was implemented on October 23, 2015.

   Note: Medicaid provider/supplier payments are not subject to levy under IRC§ 6331(h) or FPLP. These payments are administered and paid out by state government agencies for CMS. The payments may still be subject to levy under IRC§ 6331(a).

9. Miscellaneous Payments - non-means tested, such as discretionary one-time payments and expenditures paid out by different Federal agencies' specialty programs. These are payments made for various Federal program-related expenditures, including interagency transfers, non-means tested loans, grants, medical, emergency and other administrative obligations. Also, included are payments from the Commodity Credit Corporation. The FPLP will levy 15% of the payment.

10. Railroad Retirement Board (RRB) Benefit Payments were added to the FPLP in July 2011. The FPLP levies 15% of the monthly annuity or pension payments under the Railroad Retirement Act (RRA), except the RRA Tier 2 benefit portion.

11. Military Retirement Payments paid through DFAS. FPLP will levy 15% of the payment. Military retirees receiving disability payments and Medal of Honor recipients are excluded (DFAS does not process the levy on those taxpayers), even though a TC971 AC062 may be present on the module.

(8) Third party notification provisions under IRC 7602 do not apply to this type of levy process as contact is made between electronic databases.

(9) If a taxpayer is receiving two or more types of federal payments that are available for levy through the FPLP, then each payment may be levied for the same percentage allowed by the code.

(10) Prior to 2006, on delinquent IMF joint income tax and BMF sole proprietor tax liabilities, the FPLP only levied Federal payments that matched to the primary TIN. Starting January 2006, FPLP began matching and levying Federal payments identified for the secondary or cross-reference (X-REF) SSNs on those IMF and BMF accounts.

(11) Generally, the IRS must provide Collection Due Process (CDP) rights prior to levying. IRC 6330 (f) and (h) provide some limited exceptions where, the IRS can serve a levy to collect taxes prior to giving the taxpayer pre-levy Collection Due Process (CDP) rights. A "disqualified employment tax levy" (DETL) and a "federal contractor (FEDCON) levy" are two of these exceptions found in IRC 6330 (f). The FPLP implemented the DETL process in its automated process in January 2009, and the FEDCON levy process in January 2012. In these situations, the FPLP is served prior to the taxpayer receiving CDP rights but after the levy is served, CDP rights under IRC 6330 are given. Additional information on the general DETL process including the timing rules on when a taxpayer's prior request for a CDP hearing permits a DETL, can be found in IRM 5.1.9.3.14, Disqualified Employment Tax Levy . Further information on the FPLP DETL and FEDCON levy processes is described in the subsections below.

(1) FPLP computer requirements are based on an algorithmic process where all modules are first selected under certain collection statuses, then if appropriate, may be excluded by certain freeze codes based on a module exclusion criterion, or possibly an entity exclusion criterion. This subsection and its Exhibits describe the process.

(2) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(3) The following types of tax accounts and collection status can be systemically selected into the FPLP:

(1) The FPLP has five (5) sequential systemic processes - the case and module selection process; the match process; the notice process; the service of levy process; and the levy payment process. Each process has its own specific account transaction codes (TC) and/or indicators. Details for each process are outlined in the following subsections.

(2) The following TC 97X action codes are associated with those systemic processes and are computer/systemically generated only (unless otherwise noted as being able to manually input).

(1) As discussed in the FPLP Notice Process section, there are four types of FPLP notices issued by the IRS. Each notice is described in this subsection.

(2) CP 90 (IMF) or CP 297 (BMF), Intent to seize your assets and notice of your right to a hearing.

1. The CP 90/297 will be generated by the MF and mailed certified with a return receipt through the National Print Site (NPS) or its successor system. TC 971 AC 069 will systemically post on each module where the CP 90/297 was generated. A cross reference (XREF) TC 971 AC 069 will also post on joint income tax liabilities if both notices are systemically generated during the same cycle.

2. The USPS return receipt listing will be delivered back to the IRS electronically. Upon receipt, the appropriate notice response TC 971 AC 066, 067, or 068 will be electronically input on the account.

3. The CP 90/297 will display the balance due amounts and the appropriate ACS contact phone number for taxpayers to resolve the case or exercise their appeal rights.

4. The notice will inform taxpayers of their right to appeal. Taxpayers may exercise their appeal rights, appropriately, through the Collection Appeals Program (CAP), Collection Due Process (CDP), or Equivalent Hearing (Appeals request made within 1 year of the day after the date on the CDP notice).

(3) CP 91 (IMF) or CP 298 (BMF), Intent to seize up to 15% of your Social Security benefits.

1. CP 91/298 displays the balance due amounts and provides an additional 30 days after the CDP notice time frame to resolve the tax liability.

2. CP 91/298 specifically identifies the Social Security benefit payment that may be levied for 15% by indicating the taxpayer's Claimant's Account Number (CAN) and the Beneficiary's Own Account Number (BOAN). The BOAN is always the taxpayer's SSN. These numbers are systemically provided by BFS from SSA during the FPLP matching process to identify the taxpayer's Social Security benefit information.

3. CP 91/298 is generated by the Master File; mailed regular mail to the taxpayer's last known address; and a TC 971 AC 169 will systemically post on each affected module. These notices will also have the appropriate 1-800 ACS contact phone number listed.

4. Starting July 2005, the CP 91 will be considered aged and will be reissued if it is more than 26 cycles old prior to a levy transmitted after July 2005. There is no CP 298 aging criterion for the BMF modules.

5. The notice will inform taxpayers of their right to appeal. Taxpayers may exercise their appeal rights through the Collection Appeals Program (CAP) or an Equivalent Hearing Request if no prior CDP or Equivalent hearing on the FPLP periods.

6. CP 91/298 is systemically generated for the FPLP only. It should not be issued manually and is not required prior to issuing duly authorized paper levies pursuant to IRC 6331(a), Levy and distraint, Authority of Secretary, on Social Security benefit payments.

(4) CP 297A, Notice of seizure and notice of your right to a hearing.

1. The FPLP DETL process sends the CDP notice after the levy.

2. This notice informs the taxpayer that a levy has already been issued, and they may still exercise their appeal right as discussed for the pre-levy CDP notice CP 90 (297).

3. These notices are mailed certified, and displays the ACS contact information.

(5) CP 90C (IMF) or CP 297C (BMF), Notice of seizure and notice of your right to a hearing.

1. The FPLP FEDCON levy process sends the CDP notice after the levy.

2. This notices informs the taxpayer that a levy has already been issued, and they may still exercise their appeal right as discussed for the pre-levy CDP notice CP 90 (297).

3. These notices are mailed certified, and displays the ACS contact information.

(6) IRS personnel are to process any appeals requests according to procedures in IRM 5.1.9, Collection Appeal Rights or IRM 5.19.8, Collection Appeal Rights.

(7) During any time of the FPLP notice and levy process, refer taxpayers to TAS (see IRM 13, Taxpayer Advocate Service) when the contact meets TAS criteria (see IRM 13.1.7, TAS Case Criteria) and you can't resolve the taxpayer's issue the same day. The definition of "same day" is within 24 hours. "Same day" cases include cases you can completely resolve in 24 hours, as well as cases in which you have taken steps within 24 hours to begin resolving the taxpayer's issue. Do not refer "same day" cases to TAS unless the taxpayer asks to be transferred to TAS and the case meets TAS criteria. Refer to IRM 13.1.7.6, Same Day Resolution by Operations. When you refer cases to TAS, use Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), and forward to TAS.

(8) It may be necessary to block or release the case from the FPLP (See IRM 5.19.9.4.7, FPLP Levy Release: General) if a resolution is pending through the Appeals or TAS process and no other FPLP exclusionary criteria exist. See Exhibit 5.19.9-3, FPLP Exclusion Criteria.

(9) There is a fifth FPLP notice generated for the program. It is generated by BFS after a payment is levied. See IRM 5.19.9.4.3.5, Levy Payment Process (TC 670 DPC 18 or 19).

(1) ACS may encounter FPLP accounts through incoming calls or inventory processing.

(1) An ACS telephone number will be on all FPLP notices (CP 90, CP 90C, CP 297, CP 297A, CP 297C, CP 91, CP 298, and the BFS Notice) regardless of the status of the module(s).

(2) These FPLP taxpayer contacts are received by telephone, in writing, or walk-in. Unless stated otherwise, procedures are the same for all contacts.

(3) Taxpayers may contact CSCO, AM, and TAC to resolve FPLP issues. These contacts do not always have to be referred to ACS. See IRM 5.19.9.2.1, What are ALPs?.

(4) If there is an open control base, contact the employee for case processing instructions.

(5) ACS will work any FPLP incoming calls regardless of the Collection Status; except for accounts in Status 26. Revenue officers will work their own FPLP cases. Advise the taxpayer to contact the revenue officer or SB/SE Compliance Area Office. Provide the telephone number from the Zip Code listing on SERP, under the Who/Where tab, if the taxpayer requests it.

(6) Taxpayers may call referring to the Federal Contractor ccr.gov debt flag. Handle the call by following normal FPLP case processing procedures. To remove the "flag" the module must be removed from FPLP.

(7) During any time of the FPLP notice and levy process, refer taxpayers to TAS (see IRM 13, Taxpayer Advocate Service) when the contact meets TAS criteria (see IRM 13.1.7, TAS Case Criteria) and you can't resolve the taxpayer's issue the same day. The definition of "same day" is within 24 hours. "Same day" cases include cases you can completely resolve in 24 hours, as well as cases in which you have taken steps within 24 hours to begin resolving the taxpayer's issue. Do not refer "same day" cases to TAS unless the taxpayer asks to be transferred to TAS and the case meets TAS criteria. Refer to IRM 13.1.7.6, Same Day Resolution by Operations. When you refer cases to TAS, use Form 911, Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), and forward to TAS.

(8) If there is a Criminal Investigation (CI) TC 910, 916, or 918 posted to the account, do not advise the taxpayer. Continue to follow the appropriate FPLP procedures outlined in IRM 5.19.9.4 to resolve the collection issues only. If the taxpayer has received a letter from the IRS regarding the CI issue, the taxpayer should call the number on that letter.

(1) When BFS records indicate that the taxpayer is owed funds, they will begin taking 15% or 100% of any disbursement(s) due the taxpayer at least ten (10) cycles after the required CDP notice (TC 971 AC 069) or eight (8) cycles after the notice for SSA disbursements (TC 971 AC 169). Taxpayers generally call the IRS once they learn that an FPLP levy is being processed by BFS. Though the primary purpose for issuing the FPLP levy is to collect the delinquent tax liability, a levy release may be necessary.

(2) The FPLP levy must be released whenever any of the following conditions apply:

1. A levy was issued prior to the expiration of the taxpayer's 30 day notice period and none of the exceptions found at IRC 6330(f) apply, i.e., DETL levy, FEDCON levy, or collection is in jeopardy.

2. Liability is no longer owed (or a pending adjustment will fully satisfy liability).

3. FPLP levy is creating an economic hardship (meaning the taxpayer is unable to meet basic reasonable living expenses) and if the taxpayer is an individual.

4. The CP 90/297 (or equivalent) was sent, but not to the most recent taxpayer confirmed address that was available to us when we requested the letter.

5. Release facilitates the collection of the liability. The IRS, not the taxpayer, makes the determination that a levy release facilitates collection.

6. Statutory collection period has expired.

7. The taxpayer enters into an approved installment agreement.

8. The taxpayer indicates that bankruptcy has been filed.

9. Wrongful levy (i.e. LLC entity inquiries) or erroneous levy conditions apply.

10. The taxpayer makes an Offer in Compromise (Status 71 with a posted TC 480).

(3) There may be instances where a FPLP levy may be released for reasons not outlined in (2) above. In an interagency agreement between Treasury and DoD agencies, 100% FPLP levies on Defense contractors may be considered for release if their inability to perform their contract will jeopardize national security or impose significant additional costs to the Federal government. When the taxpayer raises these issues, inform the taxpayer to immediately contact their DoD contracting officer (CO). The CO has established channels of communications within the DoD and DFAS about these issues.

• DoD will formally submit a written request to IRS FPLP headquarters when they determine that a levy release and/or return of levy proceeds should be considered.

• IRS FPLP headquarters will then contact the appropriate FPLP Coordinator to initiate expedited handling of the case and direct contact from IRS to that particular taxpayer.

• In the interim of the taxpayer attempting to resolve the levy through these channels and not resolving the outstanding liability, continue with collection action. DO NOT release or block the levy solely due to the taxpayer's claim for national security or contract jeopardy reasons.

(4) A FPLP levy release determination on a Status 22 (ACS) account should be coordinated with an employee who has access to the ACS data base since ACS documentation might impact release decision.

(5) The FPLP levy is released electronically when closing actions are taken and transaction codes are posted on the Master File that would remove the affected modules from the selection criteria. See IRM 5.19.9.4.2.2, Exclusions.

(6) A FPLP exclusion TC or TC 971 AC 061 must be posted before the next payment is processed by BFS. BFS has different cutoff dates before they process the federal payments to the taxpayer and IRS. Therefore the TC must be posted for the following types of payments by:

1. If you are unsure of the payment date, ask the taxpayer.

2. It may take up to 3 weeks for the levy to be released. The exclusion TC typically takes 2 weeks to post and the following cycle a TC 972 AC 060 will be generated by MF.

3. Explain to the taxpayer and document (for Status 22 accounts) that additional payments may be levied. For OPM and SSA, it could be one additional payment and for salary it could be two additional payments.

4. If you need to immediately release the levy, additional actions may be required. See IRM 5.19.9.4.7.1, Immediate Release Through the FPLP Coordinator.

(7) Manual blocks (TC 971 AC 061) can be input at any time to stop the FPLP process. If a FPLP exclusion TC is not yet warranted on a taxpayer's case, then input the automated levy block, TC 971 AC 061, on each appropriate module that should not be levied. Posting the TC 971 AC 061, will either generate a TC 972 AC 060 which reverses the existing TC 971 AC 060, or blocks the module from the FPLP and does not allow a TC 971 AC 060. Do not input both a FPLP exclusion TC and TC 971 AC 061 during the same cycle.

(8) All manual blocks expire after 52 cycles for (IMF) or (BMF) regardless of the actions on the case. If you want the block to remain beyond the allowed cycles, you will have to re-input the TC 971 AC 061 (and have it post to the MF) before the end of the expiration cycle.

(9) Field Assistance employees working Status 22 cases will follow the same procedures above. If working cases through ICS or AMS, then take appropriate case actions and update comments on the appropriate system.

(10) In some situations, the taxpayer may insist on going to an IRS office to obtain a PAPER release of the FPLP levy. Advise the taxpayer that visiting an IRS office is unnecessary. Explain that the release is handled electronically by the IRS.

(11) In the event of a joint tax return, where both spouses have FPLP levies on their sources of income and it is determined that one spouse should not be levied; a release of levy needs to be granted. In these situations take the following actions:

1. Input a TC 971 061 on each module to block the FPLP.

2. Explain to the taxpayer that another payment may be taken if the cut-off date for their payment type is missed. See paragraph 6 above.

3. If immediate release is needed follow the procedures in IRM 5.19.9.3.7.1 Immediate Release Through the FPLP Coordinatorbelow.

4. Follow the procedures in IRM 5.19.9.4.5.1(3), FPLP Levy vs ACS Paper Levy, for preparing a manual levy for the spouse who is still subject to levy.

(1) FPLP payments are identified with a TC 670 DPC 18 or DPC 19.

(2) The return of levy proceeds requires special handling in accordance with IRC 6343(d) and IRM 5.11.2.4, Returning Levied Property to the Taxpayer. The return of FPLP levy payments is subject to a statutory time period. If the date of levy was on or before March 22, 2017, a request for the return must be made before the expiration of 9 months starting from the date of such levy. If the date of levy was on or after March 23, 2017, the request must be made before the expiration of 2 years starting from the date of such levy. The payments may be returned by the Service without a request if the statutory time period for requesting a return of the levy proceeds has not expired. FPLP levy payment dates should be verified before returning the payment.

(3) In situations where a levied payment has already been processed by BFS and transmitted to the IRS , then the levied payment may be returned to the taxpayer and a manual refund may be issued in accordance with IRM 5.11.2.4, Returning Levied Property to the Taxpayer and IRM 21.4.4, Manual Refunds.

(4) In a double levy situation, the taxpayer does not need to ask for the money back. The levied proceeds that would need to be returned are any proceeds that have been received from the paper levy for the exact same federal payment for the same time frame as the FPLP levy. Identification of the double levy situation where the same levy source/payment was levied with the FPLP and a paper levy Form 668-A or W includes, but is not limited to, working with the taxpayer by phone or through correspondence.

(5) In situations due to timing issues, where a levy has been released and the levied payment has already been processed by BFS, but not yet transmitted to the IRS by the pay date, the levied payment may be returned to the taxpayer in accordance with IRM 5.11.2.4. There may be other situations, where the levied proceeds that had already been received prior to the levy release may be returned to the taxpayer and a manual refund processed.

(1) The AKPFD is an ALP between the IRS and the State of Alaska, Permanent Fund Dividend Division (PFDD).

(2) The program matches a Master File database of delinquent taxpayers against a database of Permanent Fund Dividend (PFD) applicants.

(3) The PFD is the result of the state's oil wealth investment, which belongs to all residents of the State of Alaska. The fund was created in 1976 by a voter-approved amendment to the state constitution. The value of the fund varies from year to year, based on the economy. The value of the fund is used to determine the amount of the PFD each year. For example, in 2018, the dividend for each resident was $1,600.

(1) On or about June 1st of each year, the PFDD will provide the IRS with its database of eligible applicants, at which time the validation process begins.

1. The PFDD file is transferred using Secure Data Transport (SDT) from the Alaska Permanent Fund Office.

2. The file is then sent to Enterprise Computing Center (ECC) to validate the Alaska records.

3. Errors in the file are then corrected by the Headquarters Collection Analyst.

(2) The next step in the levy process is to ensure that the IRS database of taxpayers has been validated and only the taxpayers eligible for levy action remain on the levy file.

(3) In order to ensure that only taxpayers eligible for levy action are included on the IRS database, extensive exclusion criteria has been established and programmed into the IRS validation process. See IRM 5.19.9.5.3.1, AKPFD Exclusion Criteria.

(4) Once a determination has been made to include a taxpayer on the levy file, a TC 971 Action Code 601 is input on each tax period subject to the AKPFD levy. This is a unique identifier used exclusively to identify AKPFD accounts selected for levy action.

(5) Then Master File will systemically verify if a Intent to seize your assets and notice of your right to a hearing, (CDP notice), has been issued by identifying an unreversed TC 971 AC 069 on the module. If there was not one issued, then Master File will systemically generate an AKPFD CDP final notice, either the CP 77 (IMF) or CP 177(BMF), prior to the levy and post a TC 971 AC 069 on the module. Notices are mailed to taxpayers in June to allow ample response time for the taxpayer. See IRM 5.19.9.5.4, AKPFD Notices.

(6) After notices are issued to taxpayers, there is a period of no less than 45 days for the taxpayer to resolve the balance due prior to levy issuance. Resolution may include, but is not limited to:

• Full payment

• Proof of payment

• Installment Agreement

• Offer-in-Compromise

• CDP

• Currently not collectible (TC 530 cc 24-32)

(7) During this period of time prior to initiating levy action, accounts are worked either through written correspondence and/or telephone contacts. Most resolutions will cause the account to be removed from the levy file. In some situations, however, documentation is required to be completed and forwarded to the Headquarters Collection Analyst for inclusion into a "No Levy" list maintained strictly by that office. See IRM 5.19.9.5.6.1, No Levy/Levy Release Procedures.

(8) The IRS levy file is transferred via SDT to the State of Alaska, PFDD, along with a blanket levy memorandum, in lieu of Notice of Levy, signed by the Headquarters Collection Director by August 31st.

(9) Generally, levy proceeds are received beginning in October and continue throughout the year. Payments generally include one large payment and several smaller payments. This is contingent upon State of Alaska processing constraints.

(1) The following types of tax and collection status can be selected for levy through the AKPFD program:

• MASTER FILE TAX CODE (MFT) - IMF - 29, 30, 31, 55; BMF - 01, 03, 08, 10, 11, 13, 14,16, 17, 43, 60, 63, and 64

  Exception: See (2) below

• MASTER FILE AND IDRS COLLECTION STATUS CODES - 22, 23, 24, 26, 53 (with closing codes 03, 09, 10, 12, and 39), 60 (with TC 971 AC 898 or TC 971 AC 899 (older than 18 cycles))

• ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(2) For BMF accounts, only sole-proprietorships are included in AKPFD.

(3) The Master File status of a tax module will not change when it is selected for AKPFD levy.

(4) A TC 971 AC 601 is posted annually to identify accounts that are eligible for AKPFD.

(5) For each tax module, there must be a TC 971 AC 069, and it must have been posted on the account for at least 30 days prior to levy.

(1) Pursuant to IRC 6330, Master File will systemically verify if a Intent to seize your assets and notice of your right to a hearing (CDP notice), had been issued by identifying an unreversed TC 971 AC 069 on the module. If there is none issued, then Master File will systemically generate an AKPFD CDP final notice, either the CP 77 (IMF) or CP 177 (BMF), Intent to seize your assets and notice of your right to a hearing. This is sent to the taxpayer certified mail, return receipt requested prior to initiating levy action.

(2) A TC 971 AC 069 will systemically post on each module when the CP 77 (CP 177) is generated. For the BMF, the TC 971 AC 069 will post to the EIN with a cross-reference to the sole-proprietor as appropriate. For the IMF, the appropriate SSN(s) will be displayed on the TC 971 AC 069 XREF field.

(3) The USPS return receipt listing will be delivered back to the IRS electronically. Upon receipt, the appropriate notice response TC 971 AC 066, 067, or 068 will be electronically input on the account.

(4) Both the CP 77 and CP 177 provide an ACS toll-free telephone number to contact for assistance. See IRM 5.19.9.2.1, What are ALPs?.

(5) There is another AKPFD notice which is issued to the taxpayer by the Alaska PFDD Office, this notice is issued after the payment is levied. See IRM 5.19.9.5.4.1, PFD Notice.

(1) The PFDD generally begins the payout process during the month of October. The AKPFD levy payments are generally paid in one large payment in October and several smaller payments throughout the year.

(2) AKPFD payments are identified on tax modules with a TC 670 DPC 22 for systemically applied payments and DPC 23 for manually applied payments.

(3) The State of Alaska provides the IRS with the levy payment and data via the Electronic Federal Tax Payment System (EFTPS).

(1) CP 77 or CP 177 responses will be via written correspondence or a telephone call to ACS.

(2) Taxpayers are generally afforded 45 days or more to resolve the tax account prior to the final levy file going to the State of Alaska.

(3) Taxpayers may contact CSCO, AM, TAC, and TAS to resolve AKPFD issues. These contacts do not always have to be referred to ACS. See IRM 5.19.9.2.1, What are ALPs?.

(4) The taxpayer may request a CDP hearing, at which time the procedures outlined in IRM 5.19.8, Collection Appeal Rights, should be followed.

(5) If the taxpayer enters into an approved payment arrangement, files a Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), or otherwise takes action that would result in a decision to remove the account from levy action, be sure to input the appropriate actions to IDRS and follow procedures below. See IRM 5.19.9.5.6.1, No Levy/Levy Release Procedures.

(6) If case resolution will stop the levy but the taxpayer wants the PFD applied to the IRS balance, advise him/her to complete an "Assignment of Rights Form". This form is available at the Alaska Department of Revenue web site. Caution the taxpayer that even though the "Assignment of Rights Form" is submitted, the IRS may not receive the dividend if other creditors have a claim to it.

(7) If there is a Criminal Investigation (CI) TC 910, 916, or 918 posted to the account, do not advise the taxpayer. Continue to follow the appropriate AKPFD procedures outlined in IRM 5.19.9.4 to resolve the collection issues only. If, however, the taxpayer raises any questions about the CI issues, refer to IRM 5.19.1.5.13, Criminal Investigation Division Indicators (CID) on Balance Due Cases . If the taxpayer has received a letter from the IRS regarding the CI issue, the taxpayer should call the number on that letter.

(8) If the taxpayer raises issues regarding the AKPFD which you can not address, the call can be transferred to the Seattle or Buffalo ACS Call Site using extension #92068 or IUP 1068.

(9) If the taxpayer is inquiring on the Backup Withholding on the PFD refer the taxpayer back to the State of Alaska. Advise the taxpayer that they will need to include the backup withholding on their tax return.

(1) The following types of tax and collection status can be selected for levy through MTLP:

• Master File Tax Code (MFT) - 29, 30, 31, 55

  Note: Individual Master File (IMF) only

• Master File and Integrated Data Retrieval System (IDRS) Collection Status Codes - 22, 23, 24, 26, and 53 (with closing codes 03, 09, 12, 39, and hardship codes 24–32)

• ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(2) Only valid social security numbers (SSNs) are included in the MTLP.

(3) Each module whose current status is one of the above, must have a TC 971 action code (AC) 069.

(4) Each module included in the MTLP will have a TC 971 AC 602 posted.

• This TC is an information only transaction which indicates that the levy has been served.

• This TC posts to each module that is included in MTLP annually even if there is a prior TC 971 AC 602.

• Module(s) that do not have a current year TC 971 AC 602 will not be on the levy file to the municipality.

(1) Modules meeting the criteria below are not subject to MTLP.

(2) All entities that include one or more of the following UNREVERSED TRANSACTION CODES in any balance due module

(3) Any module that has one of the following UNREVERSED TRANSACTION CODES

(1) When a MTLP match occurs and levy proceeds are received from the municipality, a TC 670 DPC 30 will post to the earliest tax period identified in the MTLP file sent to the municipality. If the amount overpays the earliest tax period, it will systemically offset (TC 826/706) to the next MTLP module(s) whose balance was included in the levy or to other balance due tax periods as appropriate.

(2) Generally, it takes 4 to 6 weeks or sometimes longer from the time the municipality receives a MTLP levy file until the time the MTLP levy proceeds are applied to the taxpayer's account. Since this is an automated levy process, timing issues may delay the process even longer.

(1) Taxpayers may contact CSCO, AM, or TAC to resolve MTLP issues.

(2) If contacted by a taxpayer, explain that the municipal tax refund was levied to satisfy a federal tax debt. The call should be considered a regular account call which will require explaining the assessment, discussing payment of any remaining balance, granting an installment agreement, or securing financial information to determine ability to pay. All of these procedures are covered in IRM 5.19.1, Balance Due.

(3) MTLP contacts are often the result of the taxpayer receiving a notice from the municipality that their municipal tax refund was levied. Be sure to check for a current year TC 971 AC 602 to identify active MTLP accounts. In some cases, you may have to ask the taxpayer for a copy of the letter issued by the municipality. DO NOT contact municipal taxing agencies.

(4) If the MTLP levy payment is not posted to the account within 6 weeks, contact the MTLP Coordinator. The MTLP Coordinators can be found on SERP under Who/Where.

(5) Refer taxpayer to the Taxpayer Advocate Service if appropriate per IRM 5.19.1.3.2, For All Employees, and IRM 5.19.5.7.2, R2 - Taxpayer Advocate Service/Congressionals.

(6) If the taxpayer wants to appeal the levy action with the Office of Appeals, see IRM 5.19.8, Collection Appeal Rights.

(7) Erroneous and wrongful MTLP levies are handled by the MTLP Coordinator.