Brenda
reviewed this web page, click here to
see what she had to say:
26
U.S.C. § 7432. Civil damages for
failure to release lien says:
(a)In
general If any officer or employee
of the Internal Revenue Service knowingly,
or by reason of negligence, fails
to release a lien under section 6325
on property of the taxpayer, such
taxpayer may bring a civil action
for damages against the United States
in a district court of the United
States.
26
U.S.C. § 6325. Release of lien
or discharge of property:
(a)
Release of lien Subject to such regulations
as the Secretary may prescribe, the
Secretary shall issue a certificate
of release of any lien imposed with
respect to any internal revenue tax
not later than 30 days after the day
on which - (1) Liability satisfied
or unenforceable The Secretary finds
that the liability for the amount
assessed, together with all interest
in respect thereof, has been fully
satisfied or has become legally unenforceable;
The
regulations that the Secretary has prescribed
are 26 C.F.R. § 301.6325-1 Release
of lien or discharge of property:
(a)
Release of lien -- (1) Liability satisfied
or unenforceable. Any district director
may issue a certificate of release
of a lien imposed with respect to
any internal revenue tax, whenever
he finds that the entire liability
for the tax has…become unenforceable
as a matter of law (and not merely
uncollectible or unenforceable as
a matter of fact).
In the case, In re Isom, No. 87-2189
(9th Cir. 1988) a United States Bankruptcy
Appellate Panel held that, "…there
are clearly other methods that a liability
might become legally unenforceable."
In a Treasury
Inspector General for Tax Administration
memorandum two Deputy Inspector
Generals for Audit stated, “…CFf staff
are not always filing liens in accordance
with Internal Revenue Manual (IRM) guidelines
and are interpreting national policies
in a variety of ways.” Also they said,
“…the IRS should develop a more uniform
lien filing policy that will better
protect the Government’s interest…”
I interpret that to mean, and I would
think that you would too, that the IRS
is making mistakes throughout their
lien filing process; you just need the
knowledge to recognize what those mistakes
are enabling you to get your lien removed.
Also
in included in the package is report
by the Treasury Inspector General reviewing
IRS compliance with the statutory lien
process. This report tells you right
where to look for the issue that will
render your lien "legally unenforceable;"
which states that, "The IRS did
not completely comply with the law."
respecting the lien process. This reports
states that the IRS did not mail the
lien notices timely as required by the
Internal Revenue Code 95% of the time.
In addition, they found instances where
the IRS could not provide proof of timely
mailing. The report notes that the IRS
had made changes but that those changes,
"…showed no improvement in mailing
lien notices more timely." This
means that there is a technical defect
in more than 95% of the liens that have
been placed since the Reform & Restoration
Act of 1998. The Treasury Inspector
General acknowledges this in the report
by saying in his recommendations, "We
recommended the Director, … consult
with the Office of Chief Counsel to
identify any actions necessary to correct
the potential legal violations we identified
in this audit." I have included
a copy of this audit report in the package.
In
the package I also include the section
of the code that imposes the 5 day notice
requirement.
A
Federal Appellate Court made it clear
that to get your lien removed under
26 U.S.C. § 7432 you must first go through
the requirements of 26 U.S.C. § 6325
when it said, “Section 7432 amounts
to a limited waiver of sovereign immunity
for civil damages actions for failure
to release a federal tax lien upon notice
under I.R.C. § 6325; ...Plaintiff has
not shown that he has given notice in
accordance with § 6325.” Overton v.
United States, 925 F.2d 1282 (10th Cir.
1991). We are supposed to learn from
Mr. Overton’s mistake and give notice
in accordance with § 6325 before taking
any other action.
So,
you need to write a letter to the Area
Director (who used to be called the
District Director) utilizing both 26
U.S.C. § 6325, 26 CFR § 401.6325–1
and 26 C.F.R. § 301.6325 and prove
that the lien on your property is “legally
unenforceable.” To write an effective
letter you might first need information
from the I.R.S. You will get that information
with:
If
you cannot see what makes the lien legally
unenforceable on the face of the lien,
send these FOIAs, get back the responses;
review 26 U.S.C. § 6325 and 26
C.F.R. § 301.6325 that are included
as part of this package. Also review
26 CFR § 401.6325–1(f) to be sure
that your request for a certificate
of release with respect to a notice
of Federal tax lien includes everything
it is required to. Plus, review the
23 published cases respecting this statute,
or, the 51 pages of notes that I took
from those cases plus some others, that
are included in this package and you
are ready to write your § 6325
letter.
I
have learned by reviewing case law that
when there is no signed assessment there
is no liability. Since the lien statute
starts out, “If any person liable to
pay any tax neglects or refuses to pay
the same after demand…” I have included
in this package a FOIA asking for a
copy of the signed assessment. If there
is no signed assessment, there is no
liability. If there is no liability,
there can be no lien. Do you see my
reasoning? I have also included in the
package the IRS FOIA guide to help with
appeals if necessary.
I
am of the opinion that this will not
work unless your letter sounds like
you know what you are doing. The only
way to do that is to sit and read all
of the cases, statutes, and regs that
are part of the package. It is important
that each person do this because when
the letter reaches the Area Director's
office he is already going to know which
arguments are valid and which ones are
not. The Area Director/District Director
is not going to declare your lien "legally
unenforceable" unless your letter
is credible. This is the reason I keep
checking the case law and try to stay
current. He is going to know what the
courts have done most recently and so
should we. If your letter contains arguments
that are not valid it will not be credible
nor will it be effective.
Sometimes
people have me review their letters.
Now included in the package are two
written reviews that I did of people’s
notices of intent to sue. These should
help you avoid mistakes that they made
and make your own letter more effective
and authoritative.
Send
the letter in and wait for your response.
If the Area Director denies your demand
letter to remove your lien, it is not
proof that your issues are not valid
you are simply on to the next step.
You have complied with what is known
in law as “condition precedent.” If
you don’t do first things first, you
will not like the results.
Next step:
After
you’ve gotten a negative response to
your demand that the IRS remove the
lien, you may be asking, what will I
do next? I spent a lot of hours over
a several month period finding the answer
to that question. I reviewed a lot of
cases over that time and eventually
came across some cases where judges
explained the remedy; 26 USC §
7432. In summary, the Tax Payer’s Bill
of Rights waived the United States sovereign
immunity and made it possible to sue
for their refusal to remove "legally
unenforceable” liens because of the
filing of them without following procedure
such as the above FOIAs will expose.
26 CFR § 301.7432-1 requires that:
(e)
No civil action in federal district
court prior to filing an administrative
claim
26
U.S.C. § 7432(d) provides:
Limitations
(1) Requirement that administrative
remedies be exhausted A judgment
for damages shall not be awarded under
subsection (b) unless the court
determines that the plaintiff has
exhausted the administrative remedies
available to such plaintiff
within the Internal Revenue Service.
Can
you see what they are doing? They want
you to send in your administrative letter
and give them an opportunity to prevent
you from suing them. What you would
hope that means, and what is likely
to occur, is that the lien will be removed
without you ever having to go to court!
26
CFR § 301.7432-1(f) requires that
you send your letter to the Chief of
Special Operations function in the District
Director’s Office (I checked this regulation
on 2/7/07. As of this date the regulation
still reads “District Director” and
“Chief of Special Operations function”.).
This guy has the ability, based on a
well worded letter complying with the
statutes and regulations, to call off
the dogs so to speak. Heck, he can even
award you damages if your letter is
good enough (yeah right). Anyway, now
there is somebody that will actually
read your correspondence that has the
power to do something other than file
it. My first letter based on §
7432’s sister statute § 7433 (which
works on almost exactly the same process
as § 7432) caused the IRS to withdraw
one levy and not to execute on a second
that they had threatened. A friend that
used this process mentioned in passing
that after sending in his letter his
next Social Security check was for the
full amount. Of course, if you hadn’t
guessed already, those letters both
threatened to sue.
Who
could ever imagine that curtailing IRS
collection activity could be as simple
as sending a well worded, authoritative
letter to the person that has the power
and authority to stop illegal tax collection
activity? In the Treasury Inspector
General for Tax Administration memorandum
linked to above the two Deputy Inspector
Generals for Audit state, “With its
current processes, the IRS does not
have enough resources to resolve all
the balance due accounts in its inventory.
To deal with this, years ago the IRS
created the Queue to hold cases for
future assignment to revenue officers
who make personal contact with taxpayers.
The collection potential of each delinquent
account is prioritized by computer as
high, medium, or low risk, based on
case type, amount, and skills required
to work the case. Accounts meeting certain
criteria are immediately assigned to
revenue officers, while others are assigned
from the Queue to revenue officers as
workload permits, based on their assigned
priority.” Not only is the IRS in this
situation, so is the U.S. Attorneys’
office. It is this overbearing workload
on both to their parts that works in
your favor when using this process;
they don’t want anymore lawsuits! This
concept makes it a very strong likelihood
that you’ll win while you are exhausting
your administrative remedies.
In
the course of my research, I found a
section of the Code that states, "The
Secretary may withdraw a notice of a
lien filed under this section and this
chapter shall be applied as if the withdrawn
notice had not been filed, if the Secretary
determines that the filing of such notice
was...not in accordance with administrative
procedures of the Secretary…" This
sounds exactly like what I talk about
on the conference call; so, I made a
copy of the statute and included it
in the package. If you point out how
the Secretary's administrative procedures
have not been followed and they refuse
to withdraw the lien it would seem to
me that you could drag the Secretary
or his delegate before court on a mandamus
petition under 28 USC 1361 to compel
an officer of the United States to perform
his duty. I have included a sample letter
that you can customize to fit your situation
and send in demanding the withdrawal
of the notice of lien. This sample letter
is based on the Regulation which explains
what a written request for the withdrawal
of a lien must include. That Regulation
is also included in the package. This
gives you one more shot at getting their
liens removed administratively.
Based
on one lien that I recently examined
the IRS may be not sending the due process
notices timely but may be putting dates
on the notices that make it appear that
they were sent timely. I read a case
describing how the certified mail records
are maintained and processed by the
Post Office and the IRS. A copy of that
case is included in the Lien Thumper
package. From that case I learned exactly
what Postal Form to ask for in a Freedom
of Information Act request in order
to determine the exact date the notice
was placed in the mail and whether the
IRS has done what I suspect. That FOIA
is included in the Lien Thumper package.
Also
in the Lien Thumper package is the form
to use to ask for this information through
the Post Office.
It
occurred to me that there was probably
a regulation that went with the section
of code that imposed the 5 day requirement.
I didn’t have to search to long and
I found it. Down in the question and
answer section of the regulation I found
this question
and answer wherein the Commissioner
excuses himself from compliance with
the statute and regulation. I think
the Treasury Inspector General disagrees
with this position calling failure to
send the notices timely “potential legal
violations.” The answer continues, “Therefore,
the failure to notify the taxpayer concerning
the filing of a Notice of Federal Tax
Lien does not affect the validity or
priority of the Notice of Federal Tax
Lien. When the IRS determines that it
failed properly to provide a taxpayer
with a Collections Due Process Notice,
it will promptly provide the taxpayer
with a substitute Collections Due Process
Notice and provide the taxpayer with
an opportunity to request a Collections
Due Process hearing.” It is at this
hearing, if you elect to, that you will
kick their ass or, set up issues for
judicial review.
Remember,
in 1821 the U.S. Supreme Court said
in Thatcher v. Powell that no public
officer can take any action affecting
your property "…unless authorized
so to do by express law, …and that the
person invested with such a power, must
pursue with precision the course prescribed
by law, or his act is invalid…"
You can read this decision in its entirety
at my free
lien evaluation webpage.
So,
if you notice them that they failed
to timely send you the Collections Due
Process Notice required by statute,
they may send you a new notice and give
you an opportunity to schedule a hearing.
It is my opinion that you want to go
to that. I overheard one of my favorites
when it comes to fighting the IRS, Dr.
Robert Clarkson, the former attorney,
tell somebody over the phone in his
South Carolina drawl respecting a collection
due process hearing, “We’ll keep ‘em
tied up for years.” My position on that
would be, if he can, so can you.
Another
reason I say that is that you will have
an opportunity to expose them in such
a manner that the issue is preserved
for review by the courts. I have learned
that there is a form to request the
hearing. I have included a sample of
one in the Lien Thumper package. On
that form you must tell them what issues
you intend to raise at the hearing.
This sample form raises an issue dear
to the IRS’s hearts; the definition
of income. This sample form quotes from
26 different Supreme Court decisions,
including 13-15 in which the federal
tax collector lost on the issue of what
constituted income! How can they claim
to be so right on the issue of income
when they have already lost so many
times on the issue in the highest court
in the land? I also include another
case in the package wherein the Supreme
Court states, “We must reject in this
case * * * the broad contention submitted
in behalf of the Government that all
receipts -- everything that comes in
-- are income within the proper definition
of the term "gross income…”
There
are probably many unpublished wins that
we’ll never hear about that were taken
care of administratively. If you would
like your letter to carry some weight
and to succeed, the Chief of Special
Operations must find your letter threatening
to sue informed and credible. The way
you can accomplish this is by studying.
This package includes the seven FOIAs
mentioned above and their accompanying
exhibits. Plus, I collected together
thirty-nine published decisions on §
7432, twenty-three cases on § 6325,
the applicable regulations including
26 CFR § 401.6325–1 on where to
send your first demand for Release of
liens, and the statutes themselves and
have packaged that together with the
letter I wrote that was successful on
using the sister statutes § 7433.
Also included are sample notices of
intent to sue over liens the effectiveness
of which is unknown at this time. The
letter I wrote is not a boilerplate
letter that you can just put your name
at the top of. You have to use it as
a model for your own unique letter.
It doesn’t discuss any of the above
KILLER FOIA's at all. Numerous people
have already used this process to successfully
remove levies and there is every reason
to believe that it will work equally
as well on bogus Notices of Lien.
HAVE
A QUESTION? 
