Re: [tips_and_tricks] Collection Letter from ACS (LT16)
> I received a collection letter today from the ACS division of the IRS. It states the amounts they say I owe from 9 years ago plus penalty and interest (the letter is labeled LT16). Overall it just looks like another computer generated letter that I believe I have received years ago. I do remember sending a letter back to them demanding proof of the liability and so forth but I was wondering if I need to even bother replying at all or if so what other arguments could I raise.
ACS = "Automated Collection System". Raising legal arguments won't do you any good, but creating a record will & the key point is to throw the burden of proof back on them. They don't have to provide "assessment certificates & support documents" if you don't ask for them, but you certainly can pursuant to 26 U.S.C. § 6203 and 26 CFR § 301.6203-1. Then they are required to provide the documentation, but in 20 years I've never seen assessment forms which comply with the Regulation. See, e.g. Brafman v. U.S., 384 F.2d 863 (1967) where an assessment certificate was held to be invalid simply because it lacked the requisite assessment officer signature. See also, U.S. v. Miller, 318 F.2d 637 (1963); Radinsky v. U.S., 622 F.Supp. 412 (1985); Brewer v. U.S., 764 F.Supp. 309 (1991); Curley v. U.S., 791 F.Supp. 52 (1992); and March v. IRS, 335 F.3d 1186 (2003) - other U.S. court of appeals cases dealing with the assessment procedures.
I always use a Certificate of Service @ the end of correspondence, right out of the federal rules of civil procedure & while you may not get any response @ all, @ least you have a record of the fact that you did indeed demand the assessment documents & the IRS' own manual states several times (IRM §§ 126.96.36.199.4 -- 188.8.131.52.24, item # 2) that, "The Assessment Certificate is the legal document which permits collection activity." (Emphasis added). In other words, no valid assessment, no legal authority to collect.
The whole administrative process is a time-consuming royal PITA & it can (usually will) continue for years, so don't jump into it if you're not prepared to cross every t, do every i & spend a LOT of time looking up statutes / regulations, but there are procedures in place you can use which specify what the IRS can / cannot do & when they have to do it. And they almost never follow their own procedures, so you can use that against them.
The U.S. Code is online for free, so is the Code of Federal Regulations, etc. & you'll also want to get the Parallel Table of Authorities & Rules - it's not "definitive" or all-inclusive, but it helps you find which regulation(s) applies to which statute(s). And for procedural issues, you can usually add 301. to the statute number to see the applicable regulation (e.g. the regulation for 26 U.S.C. § 6203 is found @ 26 CFR § 301.6203-1).
Now understand that the IRS' computer system goes by taxpayer ID # in numerical order, not by name, address, etc. & as long as there are forms such as W-2, 1099, etc. being sent in with "your" SSN on them, the computer system is going to do what it was programmed to do - kick out form-letters, under the assumption that you do owe what is claimed. If you can work your way out of "the system" while using the administrative procedures, you can eventually get to the point that you don't get any more letters, but that takes time - took me about a year & 1/2 and that was long time ago when it was easier.
But again, the key issue is to throw the burden of proof back on them, using their own rules / regulations - don't make "affirmative defenses" as those will either be ignored or declared "frivolous". But this is the way I look @ it - hey, I didn't write these statutes / regulations / rules, you (the Gov't.) did, they apply to you & you have to abide by them. They won't do it if you don't force 'em to though & that's no easy job. But if you sit back & do nothing, their process will move forward & you will end up with a paycheck garnishment, a lien, etc. which will be virtually impossible to defeat. "Nip it in the bud" & make a record of the fact that you demanded the proper assessment documents from the very 1st letter - that shifts the burden of proof from you to them.
Another thing I always recommend is to get the Individual Master File (IMF) that pertains to you so you can see what they've been up to & are likely to do next. It's all in code & you have to have a 674-page manual (ADP & IDRS Document 6209) to look the codes up, but every single transaction from the 1st "return" you ever filed in your life will be on the IMF & "FOIA" / "Privacy Act" request will get it - takes 6-8 weeks. Going thru it you start to see patterns develop & while you can't precisely predict what they'll do next, you can get a good idea, plus you'll no doubt find numerous errors. Quite some time a go I read where a forensic accounting firm had gone over 1000's of IMF's & found only 2 that were correct.
I've gone over a bunch of 'em & haven't seen one that was correct yet - for a example, a single guy was coded "MFR-11" & that means "Child Care Credit Present" - but he'd never claimed any "child care credit" 'cause he's never had any children. After a request for amendment / correction of record, the next IMF came back with an "MFR-01" which means "1040 Not Required." Yeah, all this stuff is really complicated & obviously it's meant to be so the average person will say I can't deal with all this procedural stuff & just pay to get it over with. Or get a CPA to deal with it, whatever.
But if you want to do it yourself you can, it just takes a lot of time & if you're able to do what you do for a living as an independent contractor rather than an employee, you can work your way out of "the system" to avoid future problems before they come. I wish I could say here's a template to use to deal with these things but there isn't - the system is just too complicated to come up with a "one size fits all", "fill in the blank" format, but if you want to learn the procedures you can.
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--- On Tue, 10/5/10, robertparker99@... <robertparker99@...> wrote:
From: robertparker99@... <robertparker99@...>
Subject: [tips_and_tricks] Collection Letter from ACS (LT16)
Date: Tuesday, October 5, 2010, 8:07 PM
I received a collection letter today from the ACS division of the IRS. It states the amounts they say I owe from 9 years ago plus penalty and interest (the letter is labeled LT16). Overall it just looks like another computer generated letter that I believe I have received years ago. I do remember sending a letter back to them demanding proof of the liability and so forth but I was wondering if I need to even bother replying at all or if so what other arguments could I raise.
In the past I have responded to every letter from the IRS but they are either ignored or I receive another computer generated letter stating that my arguments are frivolous and blah, blah,blah.
Your thoughts are appreciated and I thank you in advance.
- Be aware that the 26 CFR 301 regulations are all "interpretive" regulations which do not have the force and effect of law. The IRS acts as if they are law, but they only apply to treasury department employees.
As stated the Parallel Table is not definitive. The more definite way to find out whether a regulation is actually based on a code section or directly on a statute is to look in the Electronic Code of Federal regulations. It has tables which show the authority for each regulation. If the authority is a Treasury document or 26 USC 7805 only, the regulation is NOT a substantive one, There must be a citation of an individual code section (or in some cases a Statute at Large reference) for the regulation to be substantive. This is based on the Administrative Procedure Act and on 1 CFR 1.