IV 
112TH CONGRESS 
1ST SESSION 
H. RES. 89 
Expressing the sense of the House of Representatives that the Internal 
Revenue Service should immediately update its collection policies and 
procedures in order to more adequately protect and assist taxpayers 
suffering an economic hardship. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 11, 2011 
Ms. WATERS (for herself and Ms. FUDGE) submitted the following resolution; 
which was referred to the Committee on Ways and Means 
RESOLUTION 
Expressing the sense of the House of Representatives that 
the Internal Revenue Service should immediately update 
its collection policies and procedures in order to more 
adequately protect and assist taxpayers suffering an eco-
nomic hardship. 
Whereas in Vinatieri v. Commissioner, the tax court held that 
the Internal Revenue Service (IRS) abused its discretion 
by proposing to levy on a taxpayer who had shown that 
she was in economic hardship; 
Whereas the Vinatieri error arose because the IRS inter-
preted the Internal Revenue Manual as preventing it 
from placing the taxpayer’s account into currently not 
collectible status due to the unfiled returns; 
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•HRES 89 IH 
Whereas, since Vinatieri v. Commissioner, the IRS has failed 
to adequately explain procedures for placing an account 
with unfiled returns into currently-not-collectible status 
rather than proceeding with levy; 
Whereas errors in the Vinatieri case also occurred because: 
(1) The Internal Revenue Manual did not simply state 
that the IRS cannot levy or propose to levy on a taxpayer 
known to be in economic hardship; and (2) the Internal 
Revenue Manual that permits currently-not-collectible 
status for taxpayers in economic hardship was contradic-
tory and incomplete in explaining the availability of cur-
rently-not-collectible status where there were unfiled re-
turns; 
Whereas as long as the IRS does not levy or propose to levy 
on a taxpayer it knows is in economic hardship, it oper-
ates consistently with the holding of Vinatieri; 
Whereas as IRS employees would benefit from additional 
training on the principles outlined in the Vinatieri deci-
sion, independently of any other circumstance, the IRS 
should not levy or propose to levy if the levy will create 
economic hardship; 
Whereas, according to the National Taxpayer Advocate, the 
IRS’s collection policies inflict unnecessary harm on tax-
payers who are struggling financially; 
Whereas, according to the National Taxpayer Advocate, in 
fiscal year 2010, the IRS filed liens against 1,100,000 
taxpayers; 
Whereas, according to the National Taxpayer Advocate, be-
tween fiscal year 1999 to fiscal year 2010, the IRS in-
creased its lien filings by 553 percent; 
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•HRES 89 IH 
Whereas when the IRS files a notice of Federal tax lien, the 
taxpayer’s credit rating can be damaged for the long 
term; 
Whereas tax liens are recorded by consumer reporting agen-
cies and remain on a taxpayer’s credit report for 7 years 
from the date a tax liability is resolved; 
Whereas employers, mortgage lenders, landlords, car dealer-
ships, auto insurance companies, and credit card compa-
nies utilize credit reports, and a tax lien has the potential 
to render an individual unemployable, unable to obtain 
housing (owned or rented), and unable to obtain car in-
surance or a credit card, at least at reasonable rates, for 
many years into the future; 
Whereas a tax lien can be particularly devastating to small 
businesses, as it often cuts off their access to credit; 
Whereas section 6343(a)(1)(D) of the Internal Revenue Code 
of 1986 states that a levy shall be released if the Sec-
retary has determined that such levy is creating an eco-
nomic hardship due to the financial condition of the tax-
payer; 
Whereas Treasury Regulation section 301.6343–1(b)(4) pro-
vides that economic hardship is present ‘‘if satisfaction of 
the levy in whole or in part will cause an individual tax-
payer to be unable to pay his or her reasonable basic liv-
ing expenses’’; 
Whereas, to determine hardship, the IRS considers general 
earning potential, basic living expenses, and the cost of 
living in the taxpayer’s geographic location; 
Whereas a levy on the taxpayer’s wages or property would 
cause the taxpayer to be unable to pay reasonable basic 
living expenses, creating an economic hardship that 
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•HRES 89 IH 
would require release of the levy pursuant to Treasury 
Regulation section 301.6343–1(b)(4) and other regula-
tions; 
Whereas the IRS has not revised Internal Revenue Manual 
sections that lead it to propose to levy on a taxpayer in 
economic hardship; 
Whereas the IRS lacks sufficient procedures to monitor eco-
nomic hardship among taxpayers; 
Whereas the IRS should work with the Taxpayer Advocate 
Service to revise its Internal Revenue Manual and other 
procedural guidance to clarify that all collection employ-
ees have authority to put a taxpayer account into cur-
rently-not-collectible status based on economic hardship 
even when the taxpayer has unfiled returns, independ-
ently of any other criteria; 
Whereas the IRS should work with Taxpayer Advocate Serv-
ice to train collection employees how to manage taxpayer 
accounts when the taxpayer is facing economic hardship; 
Whereas the IRS should establish quality review procedures 
that measure whether employees considered the possi-
bility that a taxpayer was in economic hardship and man-
aged accounts appropriately; 
Whereas taxpayers and small businesses continue to be 
harmed as a result of the IRS’s failure to correct its in-
structions to its employees; 
Whereas the IRS has not corrected either of these conditions; 
Whereas currently-not-collectible status is the mechanism for 
preventing issuance of levies; 
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