The government shutdown may have caused some Texas taxpayers to rejoice at the news that the Internal Revenue Service would be temporarily halting the generation of new liens and levies due to large scale employee furloughs, effectively protecting thousands of individuals accused of being delinquent on their taxes from collections efforts. However, furloughs have had somewhat unexpected consequences for those attempting to deal with existing leans as the shutdown left most of these individuals with no one to contact regarding their accounts.
The IRS has the power to impose harsh penalties against Texas residents accused of failing to pay taxes. In additional to high interest rates and fees, tax liens and levies can result in seizures of funds or property. Taxpayers with whom the IRS has threatened such actions should contact qualified tax law attorneys to ensure their rights and interests are properly represented.
The IRS immediately stopped its computers from generating new liens and levies upon the beginning of the shutdown, but existing liens were en route to taxpayers and set to be automatically enforced on certain dates. Typically, such individuals could call the IRS to contest their liens or request that they be dismissed for practical, humanitarian or other reasons.
However, the representatives that field such calls were furloughed following the shutdown, leaving the affected taxpayers with frozen bank accounts and little means of recourse. The IRS usually sends out notices of about 20,000 liens and 71,000 levies each week, suggesting that around 100,000 were affected.
Some individuals have received letters informing them that they must respond to an IRS notice within a set time frame or face property or asset seizure, only to find that they cannot contact the tax agency’s taxpayer advocates to discuss the matter. One couple even faces penalties for taxes they failed to pay because an identity thief stole an excess refund check for which they were later told they were responsible. Their tax professional explained that resolving the issue would usually be an easy process, but is now practically impossible.
Forbes, “As IRS Shutdown Drags On, Some Taxpayers Face Big Problems” Janet Novack, Oct. 10, 2013