Source: https://www.irs.gov/irm/part5/irm_05-011-007r
Timestamp: 2019-04-25 06:02:22+00:00

Document:
(1) This transmits revised 5.11.7, Notice of Levy, Automated Levy Programs.
This IRM information pertains to the Collection automated levy programs' criteria and procedures. These programs are the State Income Tax Levy Program, Federal Payment Levy Program (FPLP), Alaska Permanent Fund Dividend Levy Program, and Municipal Tax Levy Program.
5.11.7.2.1.1, IRS/BFS Interagency Agreement - Federal Payments Subject to the FPLP, is updated to include information on the exclusion of SSA disability insurance payments and the new 100% levy expansion authority on vendor payments.
5.11.7.2.2, FPLP Selection Criteria, is updated to include addition of MFT 43 in FPLP.
5.11.7.2.2.1, Business Master File (BMF) Modules Selected for the Disqualified Employment Tax Levy (DETL), is updated to include RRB payments as an exception to payments subject to DETL.
5.11.7.2.2.3, Low Income Filter (LIF) Exclusions, is updated to reflect changes made to LIF case processing conditions.
5.11.7.2.3, FPLP Systemic Processes and Indicators, is updated to include the addition of CP 177 and new titles of FPLP notices.
5.11.7.2.4 (6), FPLP Generated Notice(s) and Appeal Rights, FPLP Levy Notice from Bureau of Fiscal Service was removed.
5.11.7.2.4.1, BFS Notice to Taxpayers, new section added.
5.11.7.2.6 (5), Blocking or Releasing FPLP Levy, the note was removed, the TC 971 AC 061 no longer blocks modules from other automated levy programs.
5.11.7.2.6.2, FPLP Coordinator Duties, is updated to include information on documenting Form 4844 and file requirements.
5.11.7.2.7, Returning FPLP Levy Proceeds, incorporates clarification on payments that may be returned.
5.11.7.4, Municipal Tax Levy Program, is added for new automated levy program.
(2) IRM Exhibit 5.11.7-1, FPLP - Federal Employee Salary Paying Agencies: NFC, NBC, GSA, DFAS, is updated to include additional agency information.
(3) IRM Exhibit 5.11.7-2, Table of Federal Payments Subject to FPLP, is updated to provide information on the 100% levy expansion on USPS vendor and Medicare payments.
(4) IRM Exhibit 5.11.7-7, CP 90 (or 297), Final Notice, Notice of Intent to Levy and Notice of Your Right To A Hearing, has been removed.
(5) IRM Exhibit 5.11.7-8, CP 91 (or 298), Final Notice Before Levy on Social Security Benefits, has been removed.
(6) IRM Exhibit 5.11.7-9, CP 297A, Notice of Levy and Notice of Your Right To A Hearing, has been removed.
(7) IRM Exhibit 5.11.7-10, CP 90C (or 297C), Notice of Levy and Notice of Your Right To A Hearing, has been removed.
(8) IRM Exhibit 5.11.7-11, FPLP Levy Notice - Department of the Treasury Financial Management Service (FMS) Notice, has been retitled, updated and renumbered, it is now IRM Exhibit 5.11.7-7, Department of the Treasury, Bureau of the Fiscal Service Notice.
IRM 5.11.7 dated August 28, 2012 is superseded. This IRM incorporates Collection Interim Guidance Memoranda SBSE-05-0615-0050 dated June 15, 2015, Federal Payment Levy Program 30% Levy Authority on Medicare Provider Payments, SBSE-05-1015-0066 dated October 6, 2015, Federal Payment Levy Program 100% Levy Authority on Medicare Provider Payments, SBSE-05-1015-0067 dated October 7, 2015, Federal Payment Levy program - Exclude SSA Disability Insurance Payments, and SBSE-05-1215-0084 dated December 22, 2015, Federal Payment Levy Program - Return of FPLP Levy Proceeds.
Information intended for Campus Compliance and other personnel can be found in IRM 5.19.9, Liability Collection, Automated Levy Programs.
The State Income Tax Levy Program (SITLP) is one of four automated levy programs. SITLP matches a Master File database of delinquent taxpayers eligible to be levied against a database of state tax refunds for each state participating in SITLP.
Information pertaining to the SITLP criteria, process and procedures can be found under IRM 5.19.9, Liability Collection, Automated Levy Programs.
The Federal Payment Levy Program (FPLP) is an automated levy program the IRS has implemented with the Department of the Treasury, Bureau of the Fiscal Service (BFS) since 2000.
BFS administers the Treasury Offset Program (TOP) to collect delinquent non-tax debts for federal agencies. The FPLP was developed to interface with BFS TOP as a systemic and efficient means for the IRS to collect delinquent taxes.
IRS provides a weekly file of delinquent taxpayers to BFS. BFS matches the delinquent taxpayer file against federal payment files.
IRC§ 6331(h), Continuing levy on certain payments, as prescribed by the Taxpayer Relief Act of 1997 (Public Law 105–34) Section 1024, authorizes the IRS to issue continuous levies on payments referred to as "specified payments."
The FPLP was developed as the automated means intended to administer this law; therefore, no paper levy documents (Form 668-A or Form 668-W) should be served to effectuate a levy under this statute. The federal agencies participating in this automated levy program process understand how this levy statute is administered and that the service of a paper levy document is the means of levy intended under IRC§ 6331(a) and/or (e).
The law allows up to fifteen percent (15%) of Specified payments to be levied. Specified payments under IRC § 6331(h)(2)(A) include any federal payment other than a payment for which eligibility is based on the income and/or assets of a payee. Specified payments, under IRC § 6331(h)(2)(C), includes any annuity or pension under the Railroad Retirement Act, or benefit under the Railroad Unemployment Insurance Act. The payments subject to 15% in the FPLP are discussed in the next section. IRM 5.11.7.2.1.1. IRS/BFS Interagency Agreement - Federal Payments Subject to the FPLP.
IRC § 6331(h)(3) allows an increase of this continuous levy for up to one hundred percent (100%) of 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. IRM 5.11.7.2.1.1. IRS/BFS Interagency Agreement - Federal Payments Subject to the FPLP.
Although Specified payments may include unemployment benefits, workmen's compensation, certain public assistance payments, and the minimum exemption (from the levy of) wages, salary and other income, the IRS will not pursue these payments at this time.
The FPLP administers a levy. It is not a statutory or administrative offset. There are legal distinctions between the two civil collection actions. One distinction is that a levy is often subject to IRC § 6330, Notice and opportunity for hearing before levy (Collection Due Process). Contact your local Area Counsel for more information.
Under IRC § 6330(f), the IRS can serve a levy to collect employment taxes prior to notifying the taxpayer of their right to a Collection Due Process (CDP) hearing if the levy qualifies as a "disqualified employment tax levy" (DETL), and it can serve a levy on a "federal contractor (FEDCON)" prior to notifying the taxpayer of its right to a CDP hearing. If these levies are served under IRC § 6331(h) as FPLP levies, the post-levy CDP rights are granted under IRC § 6330(f). Additional information on DETL levies can be found in IRM 5.1.9.3.15, Disqualified Employment Tax Levy. Further information on the FPLP DETL and FEDCON levies is in the subsections below.
In serving a notice of levy, or release of such levy, with respect to any applicable government payment, IRC § 6103(k)(8), Confidentiality and Disclosure of certain returns and return information for tax administration purposes, authorizes the IRS to disclose return information, including taxpayer identity information, the amount of any unpaid tax liability (including penalties and interest), and the type of tax and tax period to which the unpaid liability relates, to officers and employees of the Bureau of the Fiscal Service. IRC § 6103(k)(6) authorizes BFS to send levy information to non-Treasury disbursed offices such as the Defense Finance and Accounting Service (DFAS), the US Postal Service (USPS), and Centers for Medicare and Medicaid Services (CMS), to the extent that such disclosures are necessary to obtain information, which is not otherwise reasonably available, for investigatory and tax administration purposes. Furthermore, IRC § 6103(n) permits the disclosure of returns and return information to any person to the extent necessary in connection with the processing, storage, transmission and reproduction of such returns and return information, the programming, maintenance, repair, testing, and procurement of equipment, and the provisions of other services, for tax administration purposes.
The interagency agreement between the IRS and BFS provides for certain federal payments disbursed or administered by BFS to be systemically and continuously levied. BFS is the levy source for all levies issued through the FPLP — not the federal payment agencies.
Civil Service or Federal employee retirement pension 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.
The FPLP does not levy the annuity payments in the Federal retirement Thrift Savings Plan (TSP).
Treasury disbursed Federal civilian agency (non-Defense) contractor/vendor payments. The FPLP will levy 100% of the payment. Prior to April 8, 2012, these payments were levied for 15% of the payment.
Federal employee travel payments - advances and reimbursements. The FPLP will levy 15% of the payment.
Federal (civilian) employee salaries administered by the salary paying agencies (SPA): United States Department of Agriculture (USDA) National Finance Center (NFC), Department of the Interior (DoI) National Business Center (NBC), USPS, General Services Administration (GSA), and Defense Finance and Accounting Service (DFAS).
DFAS, as a SPA, pays out some federal civilian employee salaries, as well as the Defense civilian employee and the military uniformed active/reserve member salaries and military retiree payments. The FPLP does not include the military uniformed services members' salaries nor the military retiree payments.
Exhibit 5.11.7-1., 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.
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.
Supplemental Security Income (SSI) payments are not subject to the FPLP.
Department of Defense (DoD) contractor/vendor payments paid through the Defense Finance and Accounting Service's (DFAS) payment systems. The FPLP will levy 100% of the payment. Prior to April 8, 2012, some of the payments may have been levied for 15% of the payment.
Army Corp of Engineers (ACOE) and the United States Postal Service (USPS) contractor/vendor/supplier payments. The ACOE payments are levied at 100% of the payment. Prior to May 9, 2012, the ACOE payments were levied for 15% of the payment. The USPS vendor/supplier payments are continuously levied at 100%.
Centers for Medicare and Medicaid Services (CMS) - Medicare Parts A (hospital), B (doctor), C (managed care) and D (prescription) 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. 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.
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).
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, also known as farm subsidy payments. The FPLP will levy 15% of the payment.
Railroad Retirement Board (RRB) Benefit Payments - monthly annuity or pension payment under the Railroad Retirement Act (RRA), except the RRA Tier 2 benefit portion. The FPLP will levy 15% of payment.
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 also began matching and levying federal payments identified for valid secondary or cross-reference (XREF) SSNs on those IMF and BMF accounts.
Exhibit 5.11.7-2, Table of Federal Payments Subject to the FPLP, that displays the payment types that are levied through the FPLP; the type of Master File accounts that match with a certain federal payment type; and the levy percentage, i.e. 15% or 100%.
If a taxpayer is receiving two or more types of federal payments that are available for levy through the FPLP, then each of those payments will be levied. The FPLP cannot selectively levy a certain payment separately for a particular taxpayer. Likewise, if both spouses on joint income tax liabilities are receiving federal payments subject to the FPLP, then both will be levied. The FPLP cannot levy only a certain spouse separately for their joint delinquent tax module.
The delegation authority to issue an IRC § 6331(h) levy, levy release, and return of levied property remains the same as outlined in Delegation Order 5-3. See IRM 1.2.44.4, Levy on Property in the Hands of a Third Party.
Certain Taxpayer Advocate Service (TAS) employees are delegated to release systemically generated levies such as the FPLP, but only under the procedures contained in IRM 5.11.7.2.6 (or successor provisions). See Delegation Order No. 13-2 (Rev 1.), IRM 1.2.50.3. TAS employees cannot, however, take action on a case that is open in another function. TAS employees may only generate levy releases on collection modules not assigned to Automated Collection System (ACS) Status 22 with an open control base only or collection field Status 26. See IRM 13.1.10.12.1.5, Releasing Federal Payment Levies, and IRM 13.1.4.2.3.19, Levy Release Authority, or refer to TAS Delegation Order authorities and successor revisions.
The FPLP systemic process is not subject to third party notification provisions under IRC § 7602(c), Examination of books and records, Notice of contact of third parties, because contact is made between electronic database(s).
Third-party contact provisions must be satisfied prior to any personal contact with BFS (or other federal agencies and third parties) about taxpayers subject to FPLP.
The FPLP is a systemic process where all modules are first selected under certain collection statuses, but then may be excluded if certain freeze codes exist while in the status. This subsection and its exhibits describe the selection and exclusion process.
Collection Module Status is Master File Status 22, 23, 24, 26 or Integrated Data Retrieval System (IDRS) Transaction Code (TC) 530, with Closing Code (CC) 03, 06, 09, 10, 12, or 39.
For a BMF employment tax module (MFT 01, 10, 11, 14 and 16) to qualify for a DETL, there must have been a CDP hearing previously requested on another BMF employment tax module no more than two years prior to that DETL-qualified module's period end date.
BMF employment tax modules that are selected into the FPLP, may also be subject to the DETL process. In order to select FPLP DETL periods, a new FPLP BMF entity indicator "AC 630 (YYYYMMDD) DATE" has been created. This new indicator is displayed in the BMF entity CC BMFOLE. A taxpayer's employment tax module may be selected for a FPLP DETL, if the entity indicator's action code (AC) 630 date is within the "two-year look back" period of that DETL-qualifying module's period end date.
"AC 630 YYYYMMDD" can only post one employment tax module's period end date at a time. For entities that have multiple employment tax modules with a TC 971 AC 630, the FPLP and BMF will post the period end date of the latest module with a TC 971 AC 630. The DETL would be issued on balance due modules where the indicator date is within two years of the modules' period end date - which will likely be later periods. The rationale is to issue the DETL on later pyramiding tax periods/quarters.
Even if the latest employment tax period with a TC 971 AC 630 is reversed by a Withdrawal - that period's end date will still be displayed.
"AC 630 YYYYMMDD" period end date can be overlaid when a later period employment tax module posts a TC 971 AC 630. This is regardless of the TC 971 AC 630 posting date. Again, as stated, the indicator will always post from the latest period employment tax module with a TC 971 AC 630. Therefore, be aware that a DETL-qualified module may have been selected based on an earlier posted "AC 630" period end date.
IRM 5.11.7.2.3, FPLP Systemic Processes and Indicators and IRM 5.11.7.2.3.4, , Levy Service Process, for the specific transaction codes on how to recognize when an employment tax module is selected into the FPLP DETL process.
Tax modules or the taxpayer entities that qualify for the FPLP but have certain condition and freeze codes under the primary Taxpayer Identification Number (TIN) will be excluded from FPLP selection.
Accounts that are generally excluded from the FPLP are those that, statutorily or operationally, should not be in levy status and are coded that way in the Master File or Taxpayer Information File. Those accounts include unable-to-pay; pending installment agreements (IA) posted prior to a FPLP levy; approved installment agreements; pending or approved Offers-in-Compromise (OIC); open Disaster Zone indicators; Combat Zone; open bankruptcies or litigation; certain pending claims and adjustments; innocent spouse modules; and certain imminent Collection Statute Expiration Date (CSED) modules. Exhibit 5.11.7-3, FPLP Exclusion Criteria, which displays the list and description of entity and module transaction and freeze codes that are excluded from FPLP.
If a module is in the FPLP, and subsequently moves into one of these exclusions, then the module will systemically reverse out of the FPLP.
If a Status 26 module, which is in the FPLP, changes to status 72 with TC 520, the module will systemically reverse out of the FPLP.
If a Status 26 module, which is in the FPLP, is closed as an unable to pay with a TC 530 CC 32, the module will systemically reverse out of the FPLP.
the taxpayer enters into a repayment agreement with the Social Security Administration (SSA) because of overpaid benefits.
if SSA has an active IRS paper levy (Form 668-W) it is honoring. By interagency agreement, SSA may honor the paper levy instead of the FPLP levy if a taxpayer is erroneously levied with both the paper and FPLP attaching their benefits, known as a "double levy" situation. Instead of returning the paper levy, SSA will honor it in lieu of the FPLP. The FPLP will need to be removed from the account. IRM 5.11.7.2.5.1, FPLP or Paper Levy.
Delinquent Individual Master File (IMF) taxpayers who qualify for the FPLP and are reported to receive SSA benefit or Railroad Retirement Board (RRB) benefit payments, will be excluded from the program if their estimated total income falls below 250% of the Department of Health and Human Services (HHS) Poverty Level Guidelines (PLG). These taxpayers are processed through the FPLP Low Income Filter (LIF).
If the taxpayer has filed an income tax return for one of the last three years and has no outstanding return delinquencies following the last return filed they will be processed through the LIF.
the SSA or RRB income under the entity SSN(s) is not reported to the Information Returns Processing (IRP) Master File.
Taxpayer accounts that are processed through the FPLP LIF are identified with TC 971 AC 543 posted in their entity. The TC 971 AC 543 indicates that the FPLP LIF analysis processing has taken place to determine if the balance due modules should be selected or excluded from the FPLP.
If the TC 971 AC 543 total income amount is below 250% of the HHS PLG amount, then the taxpayer’s balance due modules will be excluded or removed from the FPLP. If the income amount is at or above 250% of the PLG amount, then the taxpayer’s balance due modules will be selected into the FPLP.
Certain modules that may be selected into the FPLP, as discussed above, are systemically blocked from the program with TC 971 AC 061 (with the Document Locator Number (DLN) displaying a series of 8s or 9s). Under certain conditions, these accounts may be manually or systemically unblocked. IRM 5.11.7.2.6.4, Removal (Reversal) of the FPLP Block with TC 972 AC 061.
All modules moving into Status 22 (ACS) are systemically blocked.
Modules that are placed in certain ACS inventories will be systemically unblocked. See IRM 5.19.9.3.2.4, Liability Collection Automated Levy Programs, FPLP, Modules Systemically Blocked From FPLP.
State and local government entities with employment code "G" and/or "T" , and Indian Tribal Governments (ITG) and Alaska Native Villages with Master File indicator "I" are systemically blocked from the FPLP with TC 971 AC 061. If it is necessary to collect the accounts through the FPLP, then collection employees may manually unblock (TC 972 AC 061) these entities' balance due modules.
Collection employees must contact the ITG specialist assigned to the Tribe prior to reversing the FPLP block on an ITG case. Refer to IRM 5.1.12.24, Indian Tribal Governments.
The FPLP has five (5) systemic processes. Each process has its own specific transaction code (TC) and/or indicators and are outlined in the following subsections.
The table below describes, in general, the FPLP transaction codes on a module. The subsections provide more detail. These TCs are systemically generatedonly (unless otherwise noted as being able to manually input).
AC 062 LEVY HIT FPLP account will be posting a levied federal payment. (Subsequent TC 670 to follow.) The DLN displays the federal agency source; the type of federal payment and that a levy hit was found. The "XREF TIN" field may display the primary or secondary/XREF TIN that receives the federal payment. The "Miscellaneous" field may display more federal agency source codes. Federal payment levy hit posted in error. Reverses TC 971 AC 062.
All delinquent modules that meet the selection criteria will be transmitted to BFS to be matched with federal payments. IRM 5.11.7.2.2.
Although a taxpayer may never receive a federal payment, their tax module may still meet the selection criteria and will be transmitted to BFS to search for a possible future match.
If a module is selected, it remains in its original MF collection status. The module's collection status progression may continue, i.e. account going from Status 22 to Status 26.
MF entity screens (IDRS cc IMFOL/BMFOL) will display the indicator FMS CD:1, and IDRS entity screens (cc ENMOD) will display FMS-CD<1, if at least one module is selected with an unreversed TC 971 AC 060. If there are no modules selected, then the indicator will display 0 or no digit.
Integrated Collection System (ICS) will display a red literal" FPLP" indicator on the case summary screens. The red "FPLP" is generated from the IDRS entity screen indicator FMS CD<1.
3 Currently selected into the FPLP and unreversed TC 971 AC 060 present on module.
The FPLP cases that are sent to BFS become part of the BFS National Interactive Delinquent Debtor Database (NIDDD) of U.S. Federal debtors, which includes non-tax debtors. This BFS federal debtor database is shared with the GSA System for Award Management (SAM) database. SAM (https://www.sam.gov) is the Federal government's centralized registrar database of taxpayer entities who register to bid for a federal contract or grant. The SAM flags federal registrants who have federal debt in the BFS NIDDD, including FPLP tax debt. The SAM record will indicate 'yes' or 'no' for a federal debt. No other debt information is provided. If a registrant inquires about their debt flag, then BFS or GSA will refer them to the IRS to resolve their accounts. For IRS tax debts, a taxpayer's debt flag will be removed when they are removed from the FPLP.
Once a tax module is selected for the FPLP, it is transmitted to BFS. If BFS identifies a Federal payment or source match, then a TC 971 AC 062 will post on the module.
The matched TIN will be displayed under the TC 971 AC 062 XREF field for IMF accounts and BMF accounts.
If the module identified a match and/or an impending levy payment.
Exhibit 5.11.7-5, TC 971 AC 062 Document Locator Number (DLN) Format of Federal Payment Type, for the descriptive format of the TC 971 AC 062 DLN.
Exhibit 5.11.7-6, Federal Payment Agency Identifier Code List, for the type of federal payment and federal payment agency source.
The federal payment agency source for federal salaries paid by NFC and NBC will only display the codes of NFC and NBC, rather than the actual federal employer (or "suboffice" code) of the federal employee taxpayer. Exhibit 5.11.7-1., FPLP - Federal Employee Salary Paying Agencies - NFC, NBC, GSA, DFAS, for the list of the federal agencies whose payroll is serviced by these salary paying agencies.
If the TC 971 AC 062 DLN indicates match - the TC will post on all FPLP modules. The "match" TC 971 AC 062 will generate the FPLP notice process discussed below.
If the TC 971 AC 062 DLN indicates levy - then the TC will only post on the module intended for the levy payment. IRM 5.11.7.2.3.5. Levy Payment Process.
The FPLP notice process generates four notices by the IRS - a pre-levy Collection Due Process (CDP) notice, a FPLP final notice for Social Security beneficiaries, a FPLP (DETL) post-levy CDP notice, and a FPLP (FEDCON Levy) post-levy CDP notice. This subsection describes their systemic processes and IRM 5.11.7.2.4, FPLP Generated Notices and Appeal Rights, describes the notices in detail.
If a TC 971 AC 062 DLN match is posted, then 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 a CDP notice was not issued, then Master File will systemically generate a FPLP CDP final notice, either the Computer Paragraph notice (CP) 90 (IMF) or 297 (BMF), prior to the levy and post a TC 971 AC 069 on the module. On the IMF, the appropriate SSN(s) will be displayed on the TC 971 AC 069 XREF field.
For joint income tax liabilities on the IMF, even if the match is only on one of the spouses, both spouses will be issued the CP 90 notice. The TC 971 AC 069 will post for each spouse.
If the match identifies a Social Security benefit payment, and an unreversed TC 971 AC 069 had been posted for at least ten cycles (weeks), then prior to the levy, Master File will systemically generate an additional final notice to the Social Security beneficiaries, either CP 91 (IMF) or 298 (BMF), Intent to seize up to 15% of your Social Security benefits and post a TC 971 AC 169 on the module. The TC 971 AC 169 will display the TIN of the individual that matched with the Social Security payment.
On joint income tax liability accounts, the matched spouse's SSN will receive their own CP 91 with a copy going to the joint spouse. This is because of the specific information listed on the notice. The 971 AC 169 XREF SSN will display the matched spouse.
IMF will systemically generate another TC 971 AC 169 and reissue a CP 91 if 26 cycles or more have passed since a prior TC 971 AC 169.
CP 297A, Notice of seizure and notice of your right to a hearing, is issued after a FPLP DETL.
CP 90C (or 297C), Notice of seizure and notice of your right to a hearing, is issued after a FPLP FEDCON levy.
Another taxpayer notice is issued by BFS when a Federal payment is levied. See IRM 5.11.7.2.3.5, Levy Payment Process, below.
The FPLP will transmit (or "serve" ) a levy to BFS in the following situations.
For Social Security payments matched, a FPLP levy will be transmitted to BFS at least eight (8) weeks but no more than twenty-six (26) weeks from when the CP 91 or 298, Intent to seize up to 15% of your Social Security benefits, was issued (indicated by the unreversed TC 971 AC 169 posting cycle). A FPLP levy TC 971 AC 662 will post on the module with the literal "SSA" displayed in the Miscellaneous Field and TIN in the XREF TIN field.
For federal payments other than Social Security or RRB benefit payments, a FPLP DETL levy may also be transmitted to BFS on qualified BMF employment tax modules with MFT 01, 10, 11, 14 and 16. A TC 971 AC 762 will post on the module, which will generate a post-levy CDP notice CP 297A and post a TC 971 AC 069. The taxpayer is provided their CDP appeal rights after the levy. IRM 5.11.7.2.3.3, FPLP Notice Process (TC 971 AC 069 or AC 169).
For federal payments other than Social Security or RRB benefit payments, a FPLP FEDCON levy may be issued to BFS on all BMF tax modules and IMF tax modules (excluding filing status 2, married filing joint modules) if the entity is identified as a Federal contractor with an unreversed TC 971 AC 647 posted on the entity. A TC 971 AC 677 will post on the module with the literals "SAL, OTH" displayed in the Miscellaneous Field. This will generate a post-levy CDP notice CP 90C (or 297C) and post a TC 971 AC 069. The taxpayer is provided their CDP appeal rights after the levy. IRM 5.11.7.2.3.3, FPLP Notice Process (TC 971 AC 069 or AC 169).
Depending on a tax module’s levy qualifications, a single tax module could have any of the levy action codes at various times, particularly if the module goes in and out of the FPLP; or a taxpayer’s multiple modules may each have different levy codes occurring at the same time.
The FPLP DETL (TC 971 AC 762) and FEDCON (TC 971 AC 677) levy processes occur after the issuance of a CP 504 on DETL modules. The issuance of the CP 504 meets the 30-day pre-levy requirement of IRC 6331(d). Also, if a tax module qualifies for both a DETL and FEDCON levy during the same cycle, then the DETL (TC 971 AC 762) will be selected first.
For joint income tax and sole proprietor tax liabilities, the FPLP levy cannot be issued only on one TIN of these modules. All TINs in the tax modules or entity will be levied for their appropriate matched payments. The same process will occur when releasing a FPLP levy on these particular modules. IRM 5.11.7.2.6.
For taxpayers who have multiple tax periods in either the IMF and/or BMF, the levy should only subject their federal payment against one tax module at a time. That taxpayer's payment will not be levied more than the appropriate FPLP levy percentage to pay more than one tax module at a time, regardless if the taxpayer's TIN is the primary, secondary and/or XREF TIN on any tax module.
Taxpayer Thomas Trout has delinquent IMF income tax liabilities under his SSN. He also owes delinquent BMF employment tax liabilities as a sole proprietor, under his EIN and XREF SSN. Both his IMF and BMF tax modules are in the FPLP, with the BMF modules in the FPLP first. Both IMF and BMF modules match with a OPM retirement payment under his SSN. After the appropriate notices, the FPLP transmits levies on the IMF and BMF tax modules. The levies will attach 15% of the retirement payment. Since the BMF module was in the FPLP first, the levy payment will apply first to the BMF module and the 15% levy payment will post on that account. The IMF module will still have the open FPLP levy, but will not be double-paid or credited from that levy payment. Levy payments will begin to post on the IMF modules after the BMF modules are fully paid.
If the FPLP levy is released, a TC 972 AC 060 will display to indicate the account is removed from the FPLP. A TC 972 AC 662/762/677 will not display.
BFS has to process the various types of federal payment files within its processing cycles in order to meet the various payment or disbursement dates. The levy must be processed by the cutoff date for it to attach the payment by the payment date. The levy payment is then transmitted to the IRS and posted on the account on the taxpayer's payment date.
BFS lets IRS know that the levy is being processed against a federal payment by a TC 971 AC 062, with its DLN indicating a levy payment processed (or "1" in the 13th DLN position) for that module. Exhibit 5.11.7-5, TC 971 AC 062 (DLN) and Miscellaneous Field Format, for additional specific payment agency information .
The payment will post on the payment date with a TC 670 DPC 18 (payment from the primary TIN) and/or DPC 19 (payment from the secondary or XREF TIN) when BFS transmits the payment to the IRS through the Electronic Federal Tax Payment System (EFTPS).
The TC 670 DPC 18 and DPC 19 are systemic transaction codes and cannot be manually input.
Most of the FPLP levy payments will be 15% of the federal payment (or balance due, whichever is less). The exception will be on federal contractor or vendor payments, i.e. account receivables, invoice payments, from taxpayers doing business with the government, which will be 100% of the payment. IRM 5.11.7.2.1.1, IRS/BFS Interagency Agreement - Federal Payments Subject to the FPLP.
BFS will then send a notice to the taxpayer indicating the federal payment has been reduced because of the IRS FPLP levy. IRM 5.11.7.2.4.1, BFS Notice to Taxpayers. Exhibit 5.11.7-7, Department of the Treasury, Bureau of the Fiscal Service Notice.
The TC 971 AC 062 may post before or after the TC 670. This is due to timing issues, because the TC 971 AC 062 is posted on a weekly basis and the TC 670s are posted on a daily basis.
Although the TC 971 AC 062 DLN that indicates a levy payment was processed for the module, the federal payment may still not be received from BFS due to programming interface constraints between the time the levy was transmitted by the BFS to the payment agency to hold the payment and when the payment had been processed for disbursement. This may be the case on Defense contractor/vendor payments.
BFS may systemically reverse a TC 670 DPC 18 or DPC 19 payment with TC 672 DPC 18 or DPC 19 when the federal payment agency determines the taxpayer was not entitled to the payment. IRM 5.11.7.2.7, Returning FPLP Levy Proceeds.
As discussed in the FPLP Notice Process section, there are four types of FPLP notices. Each notice is described in this subsection.
The CP 90/297 will be generated by the MF (displayed with TC 971 AC 069) and mailed certified with a return receipt (Postal Service (PS) Form 3811) through the IRS National Print Sites.
The USPS return receipt will be systemically processed and the appropriate notice response TC 971 AC 066, 067, or 068 will be posted on the account.
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.
If a CDP notice (CP 90/297, Letter 1058, ACS LT 11) was issued prior to the last 180 days, a new warning of enforcement action does not have to be issued because this process is a computer matching levy program. See IRM 5.11.1.3.3.8, Timeliness of Notice.
CP 91/298 is generated by the MF (displayed with TC 971 AC 169) and mailed regular mail. 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. These notices will also have the appropriate 1-800 ACS contact phone number listed.
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.
The IMF CP 91 will be considered aged and a new one will be reissued again prior to the levy if the previous one is more than 26 cycles old. There is no CP 298 aging criterion for the BMF modules.
Equivalent Hearing Request — if no prior CDP or Equivalent hearing on the FPLP periods.
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) on Social Security benefit payments.
The FPLP DETL process sends the CDP notice after the levy.
These notices inform 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).
These notices are mailed certified, and display the ACS contact information.
The FPLP FEDCON levy process sends the CDP notice after the levy.
IRS employees are to process any appeals requests according to procedures in IRM 5.1.9, Field Collecting Procedures, Collection Appeal Rights or IRM 5.19.8, Liability Collection, Collection Appeal Rights.
Any time during the FPLP notice and levy process, taxpayers should be referred to the Taxpayer Advocate Service (TAS) for assistance if the taxpayer's issue cannot be resolved the same day and it meets TAS case criteria (See IRM 13.1.7 , Taxpayer Advocate Case Processing, TAS Case Criteria). The definition of ‘same day’ is within 24 hours. "Same day" cases include cases that can be completely resolved in 24 hours, as well as cases in which steps have been taken 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 13.1.7.4, Taxpayer Advocate Case Processing, TAS Case Criteria, Same Day Resolution by Operations. Use Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), and forward to TAS.
If TAS has an open case and requests a collection hold on the account, it may be necessary to block or release the FPLP until a resolution is reached. IRM 5.11.7.2.6, Blocking or Releasing FPLP Levy. While the IRS is not prohibited from taking levy enforcement actions, generally levies will not be issued on the modules listed on Form 911 that meet TAS criteria. TAS will notify the revenue officer when a Form 911 has been received and when it has been resolved. If the revenue officer believes levy action is necessary, TAS should be contacted and advised of Collection's planned action.
At the bottom of the notice: the type of Federal debt and the agency due the Federal debt; the type, date and amount of the Federal payment disbursement and the paying Federal agency; and then the amount levied.
The TIN Number is the matched TIN that is being levied for the payment. On joint income tax or sole proprietor liabilities, this may be either the primary or secondary (XREF) SSN.
The BFS notice informs taxpayers to contact the following ACS addresses and phone numbers to resolve their account. If a taxpayer calls the ACS phone number and the taxpayer case is assigned to a local field collection office, then ACS should refer the taxpayer to the appropriate office. Taxpayer correspondence received at these addresses should be handled according to IRM 5.19.9.3, Liability Collection, Automated Levy programs, FPLP, or forwarded to the appropriate office for resolution.
BFS mails the notice to the taxpayer either to the address provided by the IRS (if the Federal payment disbursed electronically) or to the address provided by the Federal payment agency source (if the Federal payment is disbursed through a paper check).
Revenue officers must recognize modules that have been placed in the FPLP and determine if this process will be part of their strategy to resolve the case.
If revenue officers decide that modules should not be part of FPLP, then they will need to block or release the modules from the FPLP. Revenue officers must seek managerial approval to block modules from being included in the FPLP. The approval request will be forwarded for managerial approval through ICS. In the event the approval request is made on a paper document, the paper document should reflect the manager's approval. IRM 5.11.7.2.6.
Whenever the FPLP indicator is present on a module, revenue officers may decide to levy the federal payment source through the FPLP under IRC §6331(h) or through the traditional paper levy method using Form 668A or Form 668W under IRC 6331(a) or 6331(e). The FPLP will attach the applicable 15% or 100% of the payment continuously through BFS as the central or disbursing agent for the federal payment source. The paper levy method under IRC§ 6331(a), Levy and Distraint, or IRC§ 6331(e), Continuing Levy on Salary and Wages, using the Notice of Levy, Form 668-A or Form 668-W, respectively, will levy the federal payment source directly and attach the maximum amount allowed under those statutes. The maximum amount of levy proceeds received from either levy method will depend on the type of federal payment expected. Form 668-A or Form 668-W may not be used as a means to levy under the FPLP statute, IRC 6331(h).
Form 668-A or Form 668-W will have to be served or issued on the federal agency directly, not BFS. Prior to levying the federal agency with Form 668-A or Form 668-W on either the primary or secondary taxpayer, the revenue officer must release or block the module from FPLP . IRM 5.11.7.2.6, Blocking or Releasing FPLP Levy .
Form 668-A or Form 668-W may be used as a levy tool on a case, in addition to the FPLP, as long as the Form 668A/W is not served on a federal payment source. For example, a Form 668-A may be sent to a bank account, even if the taxpayer's federal payment is subject to the FPLP. If the Form 668-A or Form 668-W is served on a federal payment source, and the taxpayer is also in the FPLP, then there is a chance the FPLP may also levy the same federal payment source - which is prohibited based on the previous paragraph.
If a case has an active FPLP levy, and there is no cooperation or contact from the taxpayer, then determine if a paper levy under IRC 6331(a) or (e) is necessary and convert the FPLP levy to the paper levy, as discussed above, in order to close out the case through the continuous paper levy process.
If a case has an active FPLP levy, with no further case action to be taken, and, if the taxpayer has agreed to the amount of the FPLP continuous levy, then determine if an approved installment agreement can be established on the case.
Continuous levies under IRC§ 6331(e) on the federal payment agency may still be issued using Form 668-W, and placed in Status 60. See IRM 5.11.5, Notice of Levy, Levy on Wages, Salary and Other Income.
The criteria and delegation authority for release of levy will not change for the FPLP. See IRM 5.11.2, Serving Levies, Releasing Levies and Returning Property.
There will be instances where the FPLP may be released on certain cases based on reasons not defined in IRM 5.11.2. IRM 5.11.7.2.6.1, Requesting Assistance from the FPLP Coordinator on Certain Emergency Levy Release Situations. For cases involving Identity Theft refer to IRM 5.1.28.4, Collection Activity in Identity Theft Cases, and IRM 5.11.2.3.6, Levy Releases in Cases of Identity Theft.
The FPLP levy can only be released electronically. Do not use the Form 668–D, Release of Levy/Release of Property from Levy, as the means to release the levy from BFS or the federal payment agency source.
BFS and other federal agencies will not process the Form 668–D on a FPLP levy and will return it to its originator.
As discussed in IRM 5.11.7.2.3.4 , both spouses' SSNs on joint income tax liabilities will be part of the FPLP, and both may be receiving federal payments that are being levied simultaneously. If a levy release is warranted on either of the spouses, then the FPLP will be released on both. The FPLP cannot levy only one or the other spouse's federal payment. Another levy tool, i.e. Form 668-W or Form 668-A, may need to be issued to attach the leviable spouse's federal payment. IRM 5.11.7.2.5.1.
FPLP Exclusion Transaction Code: FPLP levies can only be released by posting a transaction code (TC) that would exclude the taxpayer from the FPLP as discussed in IRM 5.11.7.2.2.1. Exhibit 5.11.7-3.FPLP Exclusion Criteria. Posting a FPLP exclusion TC will generate a TC 972 AC 060, which reverses the existing TC 971 AC 060, and releases the levy.
Taxpayer E. Rockfish is being levied through the FPLP. Revenue Officer I. Salmon determined that Taxpayer Rockfish's case will be resolved as Currently Not Collectible (CNC) unable to pay and inputs a CNC TC 530 CC 24. Once the TC 530 cc 24 is posted, it will generate a TC 972 AC 060 indicating the module is released from the FPLP.
FPLP Block Transaction Code TC 971 AC 061: 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 not allow a TC 971 AC 060 to post. There is no need to input both a FPLP exclusion TC and TC 971 AC 061. TC 971 AC 061 can be input via ICS or Form 4844. IRM 5.11.7.2.3.1, Case and Module Selection Process (TC 971 AC 060), for block indicators that should display on the module.
Revenue Officer I. Wahoo has a Status 26 FPLP case module on Taxpayer E. Rockfish. Revenue Officer Wahoo is in contact with Taxpayer Rockfish, and is in the middle of making a collection determination based on the financial condition of Taxpayer Rockfish. He has asked for additional financial information and for Taxpayer Rockfish to file delinquent returns by a certain due date. Since RO Wahoo is waiting for the information and not taking any enforcement action, RO Wahoo inputs a TC 971 AC 061 on each affected module to remove (or release) the accounts from the FPLP. The TC 971 AC 061 generates a TC 972 AC 060 to indicate the module is removed/released from the FPLP.
Revenue Officer T. Snapper does not want his taxpayer's new Status 21 balance due module going into the FPLP when it changes to Status 26 because he is working with the taxpayer. After managerial approval, Revenue Officer Snapper will request or input TC 971 AC 061 on the Status 21.
Taxpayer K. Dory who has modules in the FPLP with TC 971 AC 060, requests an OIC. Revenue Officer C. Mackerel inputs a pending OIC (TC 480) on all the modules. Since TC 480 is a FPLP exclusion TC, it will generate a TC 972 AC 060; therefore TC 971 AC 061 is not necessary and must not be input.
Any manually input TC 971 AC 061 will expire after 52 cycles. To keep the module blocked, another TC 971 AC 061 will need to be re-input and posted prior to the expiration of the previous TC 971 AC 061.
In cycle 200815, Revenue Officer B. Eel receives a status 26 case from status 24 queue. The case was already in the FPLP while in status 24, although no federal payments were matched or levied yet. Revenue Officer Eel does not want to use the FPLP as a collection tool yet, and after managerial approval, manually inputs a TC 971 AC 061 to hold off any possible FPLP action. In cycle 200910, Revenue Officer Eel is continuing to investigate the case and still does not want the case to go through the FPLP. The revenue officer re-inputs the TC 971 AC 061 in cycle 200910, because the TC 971 AC 061 from cycle 200815 will expire in 200914 (52 cycles).
Revenue Office Pike has been waiting for financial documents from his taxpayer, along with other internal case investigation information. There is a TC 971 AC 061 posted on his taxpayer's status 26 modules in order to prevent the FPLP. He recognizes that the TC 971 AC 061 was posted 45 cycles ago, and also realizes he will not receive the case information for another several weeks. Since the original TC 971 AC 061 will expire in 7 cycles, RO Pike requests another TC 971 AC 061 on the modules.
The following eight (8) examples in the next few sections describe when the automated levy release will take effect based on the payment processing cutoff chart described above; when it may be necessary to request a FPLP coordinator to 'rescind' the levy (as discussed in the next subsection) so that the next scheduled payment for the taxpayer is not levied; and when it may be necessary to determine if the levy payment should be returned, based on timing.
Since these examples explain timing situations, note that the Master File posting cycle calendar date indicated is a Monday.
Taxpayer Sandra Salmon dba Salmon Fishing has a delinquent Form 941 (MFT 01) for 200812 in Status 26, and Form 1040 (MFT 30) for 200812 in Status 26. Taxpayer Salmon no longer owns the business, but she does receive an OPM retirement payment the 1st of each month. Her November 1 OPM payment is levied through FPLP for her MFT 01 for 200812. She calls the IRS on November 2 to request an installment agreement and gets approved for it. On November 2, the revenue officer inputs a Status 60 and/or TC 971 AC 063 on her delinquent modules, which will release the FPLP levy.
When will the automated levy release take effect?
The Status 60 (or TC 971 AC 063) posts on the Master File. Based on the Master File posting cycle calendar, this will generate and post a TC 972 AC 060 on November 12, indicating the FPLP is released. The TC 972 AC 060 will post prior to the payment processing cutoff date, which is 2 weeks prior to her next OPM payment on December 1. In this example, the cutoff off date is November 16. Taxpayer Salmon's December 1 OPM payment should not be levied since the FPLP exclusion TC (Status 60 or TC 971 AC 063) and FPLP reversal TC (TC 972 AC 060) are posted before the processing cutoff time frame stated above.
Taxpayer Harry Halibut has a delinquent Form 1040 (MFT 30) for 200812 in Status 26. Taxpayer Halibut receives a SSA benefit payment on the fourth Wednesday of each month. His March SSA payment is levied through FPLP. He calls the IRS on March 31 to request and is granted an unable to pay hardship determination. On March 31, the revenue officer inputs a TC 530 CC 25, which will release the FPLP levy.
The TC 530 CC 25 posts on the Master File. Based on the Master File posting cycle calendar, this will generate and post a TC 972 AC 060 on April 9. The TC 972 AC 060 posting date is prior to the cut off date, which is 6 business dates before his next scheduled SSA payment (fourth Wednesday) in April. In this example, the fourth Wednesday in April is April 25, and the cutoff date is April 18. Therefore, the April SSA payment will not be levied.
Taxpayer Catch-A-Cod LLC (which is an association corporation with shareholders) has multiple delinquent Form 941s (MFT 01) for all quarters in 2009 through 20011 - all in Status 26. Catch-A-Cod receives federal contractor payments from the Department of Agriculture on various payment dates (depending on when the taxpayer submits invoices to Agriculture) since September. The taxpayer's federal contractor payment disbursements due to be paid on October 5 and payment dates thereafter were levied through the FPLP. On October 15, the taxpayer's power of attorney requests a release of levy, and applies for and is able to acquire a processible offer-in-compromise from the revenue officer. On October 15, the revenue officer inputs a TC 480 on all the delinquent modules, which will release the FPLP levy.
The TC 480 posts on the Master File. Based on the Master File posting cycle calendar, this will generate and post a TC 972 AC 060 on October 25. Since the payment dates on federal contractor payments vary (depending on the payment terms in the contract), it will be difficult to determine which federal payment that is due to the taxpayer, will not be continuously levied. Though the TC 972 AC 060 officially posted on October 25, and is removed from the FPLP, there may be invoices and payments already in process with the levy still in effect prior to October 25. The taxpayer should contact their contracting officer to see when the FPLP levy has been released from their future payments processed after October 25.
Taxpayer Tracy Trout has delinquent Form 1040s (MFT 30) for 201012 through 201312 in Status 26. Taxpayer Trout works for the State Department as a federal employee, and receives her federal salary every two weeks on Tuesday. Her May 10 salary payment was levied through the FPLP, and her next pay date is May 24. On May 13 she calls the IRS to request and is granted an installment agreement. The revenue officer inputs TC 971 AC 063 and Status 60 on her accounts on May 13, which will release the FPLP levy.
The TC 971 AC 063 posts on the Master File. Based on the Master File posting cycle calendar, this will generate and post a TC 972 AC 060 on May 27. Taxpayer Trout's next pay date on May 24 will still be levied since the processing cutoff date chart above indicates the TC 972 060 should post at least 14 days before the next pay date to avoid the levy - in this case, it should have posted by May 10. The levy release will be in effect for her next pay date on June 7 in the process discussed in the next paragraph.
If the processing cutoff date is missed, then the automated levy release will be effective for the payments thereafter. IRM 5.11.7.2.7.Returning FPLP Levy Proceeds, to determine if the levied payment may be returned via the manual refund process due to these timing issues.
Taxpayer Albert Almond has a delinquent Form 1040 (MFT 30) for 201412 in Status 26. Taxpayer Almond receives an OPM benefit payment on the 1st of each month. His July 1 OPM payment is levied through FPLP. On July 15, Taxpayer Almond calls the IRS to request an installment agreement and gets approved for it. The IRS employee inputs a Status 60 on July 15, which generates and posts a TC 972 AC 060.
The TC 972 AC 060 will post on July 29 based on the Master File posting cycle chart. Based on the payment processing cutoff date table, the TC 972 AC 060 posted on July 29 will not post in time to prevent his August 1 OPM payment from being levied. In order for the FPLP levy to not take the taxpayer's August 1 OPM payment, the TC 972 AC 060 should have been posted at least 14 days before August 1, which is July 18. The TC 972 AC 060 will post on the module in time to prevent his September 1 OPM payment from being levied. If the taxpayer's financial situation warrants a return of levy proceeds from the August 1 OPM payment, then the criteria and procedures under IRM 5.11.7.2.7 must be followed.
Taxpayer Cathy Cashew has a delinquent Form 1040 (MFT 30) for 200812 in Status 24. Taxpayer Cashew receives a SSA benefit payment on the 3rd of each month. Her December 3rd SSA payment is levied through FPLP. She calls the IRS on January 1 to request and is approved for a hardship determination. The IRS employee inputs a TC 530 CC 32 on January 1, which will generate and post a TC 972 AC 060.
The TC 530 CC 32 and the TC 972 AC 060 will not be posted until the Master File 'dead cycle' period is completed (which is after cycle 04, and in this example is January 23.) The TC 972 AC 060 will not be posted in time to 'save' the January 3rd SSA payment from being levied. In order for the FPLP levy to not take the taxpayer's January 3 SSA payment, the TC 972 AC 060 should have been posted at least 6 business days before January 3, which is the processing cutoff time frame discussed in the table above. In this example, the cutoff date for the January 3 payment is December 24. The TC 972 AC 060 will post on the module on January 23 which is in time to prevent her February 3 SSA payment from being levied. The cutoff date for the February 3 payment is January 26. If the taxpayer's financial situation warrants a return of levy proceeds from the January 3rd SSA payment, then the criteria and procedures under IRM 5.11.7.2.7 must be followed.
If the TC is not posted by the processing cutoff date or cannot be posted because of the Master File 'dead cycles' during the first two or three cycles of each year, and to avoid the next scheduled federal payment from being levied, then the FPLP levy may need to be released by the FPLP coordinator as discussed in the next section.
For cases in Status 26, selected Collection Advisory office will have a designated FPLP coordinator who will have real-time secured web access to the BFS database system in order to temporarily release or "rescind" a levy during certain situations discussed below. On the IRS intranet Servicewide Electronic Research Program (SERP) page, under "Who/Where" , the FPLP coordinators can be identified based on taxpayer’s geographical location.
As discussed in the previous subsection, a FPLP levy is released by posting a FPLP exclusion TC (i.e. Status 60) or FPLP block (TC 971 AC 061) on the account. Those TCs will generate the TC 972 AC 060 indicating the FPLP levy is released. If the TC 972 AC 060 has not yet posted to release the levy and the taxpayer's next payment is imminent, then to avoid that payment from being levied, a levy release request to the FPLP coordinator may be necessary. (See IRM 5.11.7.2.6.2, FPLP Coordinator Duties.) The FPLP coordinator may be able to 'rescind' the levy through the BFS database system in time to save the next payment from being levied but only if there is still time to input the 'rescind' action prior to the payment processing cutoff chart discussed above. The "rescind" input must be completed before the payment cutoff date as discussed above in IRM 5.11.7.2.6 (7). Most of the time, the FPLP coordinator 'rescind' action can be done only on payments paid 'monthly', such as the OPM retirement payments or SSA benefit payments. Since federal salaries and contractor/vendor payments are paid more often and their processing cutoff dates shortened or unknown, then the systemic levy release will usually not be effective until after 2 cycled pay dates.
Taxpayer D. Oilfish has a delinquent Form 1040 (MFT 30) for 201312 in Status 26. Taxpayer Oilfish receives an OPM retirement payment the 1st of each month. Her November 1 OPM payment is levied through FPLP. She calls the IRS on November 10 to request an installment agreement and gets approved for it. On November 10, the revenue officer inputs a Status 60 and/or TC 971 AC 063, which will release the FPLP levy.
Will the 'rescind' release the next payment from the levy?
The Status 60 (or TC 971 AC 063) should post on the Master File, and will generate and post a TC 972 AC 060 to indicate the FPLP is released. Based on the Master File posting cycle chart, the TC 972 AC 060 will post on November 21. The TC 972 AC 060 will not post in time to release the levy on her December 1 OPM payment prior to the processing cutoff date of November 17. The TC 972 AC 060 should have posted at least 14 days prior to the December 1 payment date. If the taxpayer wants to 'save' her December 1 OPM payment from being levied, then the revenue officer should request the FPLP coordinator 'rescind' the levy on November 10. Since November 10 'rescind' input through the BFS system is before the November 17 processing cutoff date (or more than 14 days before the December 1 payment date), then the December 1 OPM payment will not be levied. The TC 972 AC 060 will have posted in time so that the January 1 OPM payment is not levied.
Taxpayer I. Skipjack has a delinquent Form 1040 (MFT 30) for 200812 in Status 26. Taxpayer Skipjack receives a SSA benefit payment on the 3rd of each month. His March 3 SSA payment is levied through FPLP. He calls the IRS on March 16 to request and is granted an unable to pay hardship determination. The revenue officer inputs a TC 530 CC 24 on March 16, which will generate the TC 972 AC 060 and release the FPLP levy.
The TC 530 CC 25 posts on the Master File, which will generate and post the TC 972 AC 060 on March 30 based on the Master File posting cycle chart. Based on the processing cutoff date chart, the TC 972 AC 060 will not post in time to release the levy prior to the taxpayer's next SSA payment on April 3. The TC 972 AC 060 should have posted at least 6 business days prior to the April 3 payment date or which is, in this example, March 26. If the taxpayer wants to 'save' his April 3 SSA payment from being levied, then the revenue officer should request the FPLP coordinator 'rescind' the levy on March 16. Since March 16 'rescind' input through the BFS system is before the March 26 processing cutoff date (or more than 6 business days before the April 3 SSA payment date), then the April 3 SSA payment will not be levied. The TC 972 AC 060 will be posted in time so that the May 3 SSA payment is not levied.
The levy "rescind" on the BFS database is temporary only, and effective at the time of the input until the next time the BFS database is updated with taxpayer information from the Master File, which is usually every week. The FPLP coordinator's "rescind" input in the BFS database will not upload to IDRS or MF.
Since the BFS database is updated weekly with the current taxpayer information from the Master File, the "rescind" action by the FPLP coordinator will only last until the database is updated again, which is usually the following week. It may take up to 3 cycles before the BFS database receives the FPLP reversal TC 972 AC 060, and it may be necessary to request the rescind as often as necessary until the TC 972 AC 060 posts. It will be the responsibility of the employee requesting the "rescind" to monitor the exclusion TC and FPLP reversal TC 972 AC 060.
If a TC 971 AC 061 FPLP block is required on the modules and cannot be input via ICS, then use a separate Form 4844 and forward it to the appropriate area, i.e. Case Processing. Do not send this FPLP block request to the FPLP coordinator. See the subsection for the FPLP coordinator duties.
Do not prepare a Form 668–D, Release of Levy/Release of Property from Levy, for BFS or any federal payment agency to release a FPLP levy.
Inform the taxpayer to contact their DoD contracting officer (CO).The DoD CO should have pre-established communication channels within the DoD and DFAS about these issues.
If necessary, DoD may inform the IRS/FPLP headquarters, in writing, of the necessity of a particular contract to be performed and not levied due to national security interest or the significant additional financial cost to the Federal government, and formally request the levy release and/or return of levy proceeds of that particular contractor/taxpayer.
When DoD informs FPLP headquarters, FPLP headquarters will then contact the FPLP coordinator, based on the taxpayer location. The coordinator will initiate expedited handling of the case and direct contact from IRS to that particular contractor/taxpayer. IRM 5.11.7.2.6.3.
Disagreements over these decisions or the need for additional financial information from the taxpayer as part of negotiating for these decisions will be handled on a case by case situation.
While the taxpayer pursues this action to get the levy released, Collection should continue with standard operating procedures for collection, which may include allowing the levy to continue.
Collection or the FPLP coordinator should not release or block the levy solely due to the taxpayer’s claim for these reasons. The levy release determination will be based on DoD communication through IRS/FPLP headquarters, and the case will be handled accordingly.
As indicated above, selected Collection Advisory offices have a designated FPLP coordinator who will have on-line and real-time access to the BFS database system in order to temporarily release or "rescind" a levy during certain situations.
FPLP coordinators will have and should maintain their computer web access to the BFS website, known as the Treasury Offset Program (TOP) taxpayer database, in order to input (aka "rescind" ) emergency or stop-gap FPLP levy release requests. On the IRS intranet Servicewide Electronic Research Program (SERP) page, under "Who/Where" , the appropriate FPLP coordinator can be identified for each case.
The FPLP coordinators are not required to input the TC 971 AC 061 block/release or any other TC excluding the account from the FPLP. It is the responsibility of the operational/functional (i.e. Collection Field, TAS, TAC) employee resolving the case to input or forward it to the appropriate unit, i.e. Case Processing.
Form 4844 will serve as the input document for the FPLP coordinator. The coordinator will sign onto the BFS system and rescind all the modules from the levy.
Requests for FPLP levy rescinds must be input within one (1) workday from receipt.
The original Form 4844 will be annotated with the date and time that the release was input into the BFS database and maintained in a file for 30 days.
The FPLP coordinator is not responsible for authorizing the levy release.
Coordinators should also provide subject matter support for the operating and functional divisions, and should also contact the FPLP headquarters staff for clarity and guidance.
In rare instances and under the guidance of FPLP headquarters staff, the coordinators may be delegated to coordinate FPLP case-related recovery efforts of systemic erroneous levy situations or expedited case handling. IRM 5.11.7.2.6.3., Additional FPLP Coordinator Duties for Certain Expedited Case Handling.
FPLP headquarters will initiate these necessary steps with the local FPLP coordinator, in order to facilitate expedited case handling of certain FPLP cases.
The local FPLP coordinator will open a NFOI 148, Lien Priority Other, note the case history and initiate a mandatory outgoing Advisory Courtesy Investigation to the collection field function (or to the assigned revenue officer of the case), in order to make contact with the taxpayer. The group manager assigning the investigation should advise the revenue officer that because of the sensitive nature of the investigation, contact with the taxpayer will generally be made within three (3) work days from receipt.
The following subsections outline the rare situations and procedures that require expedited case handling through the FPLP coordinator.
and resolving the collection case.
FPLP headquarters will contact the local FPLP coordinator to release the FPLP levy and/or block the FPLP with TC 971 AC 061 or the appropriate exclusion TC through the appropriate Case Processing campus site, or assigned revenue officer. There may be situations where the levy will not be fully released, but where it is agreed that only a partial amount (less than 100%) may still be levied. There will be no NFOI levy release determination necessary from the collection field function; the local FPLP coordinator will open a 193 Lien/Levy module and note the case history. The levy release, as determined by IRS FPLP headquarters, should be completed within 48 hours of DoD's request.
For the return of levied proceeds, if applicable, IRS FPLP headquarters will request BFS to electronically return the proceeds (full or partial) to the taxpayer directly. (Standard IRS manual refund procedures of these levied proceeds will not be initiated in these situations.) There will be no NFOI determination necessary from the collection field function; the local FPLP coordinator will open a 193 Lien/Levy module and note the case history. The return of levied proceeds will be indicated with a TC 672 DPC 18 and will be electronically refunded by BFS back to the taxpayer’s financial account to which it would have originally been deposited - usually within 48 hours from the time BFS receives the request from the IRS.
The case will still need to be resolved through the ICS mandatory NFOI by the collection field function or assigned revenue officer. This mandatory NFOI will require expedited handling to ensure resolution of the case in order to satisfy any outstanding national security and interagency concerns.
Besides national security, the IRS has also agreed to review case situations requested by the DoD where the FPLP levy would jeopardize the performance of a Defense contract and produce a significant additional cost to the Federal government.
The return of levy proceeds, if warranted, will also be considered on a case by case basis by the collection field function and if returning the (partial or full) proceeds is warranted, then process through the standard manual refund procedures within IRS. IRM 5.11.7.2.7, Returning FPLP Levy Proceeds.
The case will still need to be resolved through the mandatory OI by the collection field function. This mandatory OI will require expedited handling to ensure resolution of the case in order satisfy any outstanding interagency concerns.
In these situations, it is the IRS contacting the taxpayer regarding the levy relief, and not the taxpayer contacting the IRS. Therefore, during the course of resolving the case in either situation, if the taxpayer does not make the concerted effort to contact and/or resolve the case with the revenue officer, it may be necessary to contact FPLP headquarters through the FPLP coordinator to determine if the FPLP should continue and to consider its impact with the DoD. Contact may be made with DoD as long as third party contact provisions are satisfied.
Revenue officers may manually reverse any TC 971 AC 061 with a TC 972 AC 061, at anytime during their collection case strategy in order to place the module into the FPLP. (The DLN in the TC 972 AC 061 will display a random series of numbers.) The module should then be systemically selected into the FPLP, as along as the FPLP selection criteria is met. IRM 5.11.7.2.2, FPLP Selection Criteria. See IRM 5.11.1.3.1, Pre-Levy Considerations, if appropriate.
As discussed in IRM 5.11.7.2.2.4, Modules Systemically Blocked From FPLP, Indian Tribal Government's delinquent accounts are systemically blocked from the FPLP. Collection employees must contact the ITG specialist assigned to the Tribe prior to reversing the FPLP block on an ITG case. Refer to IRM 5.1.12.24, Indian Tribal Governments.
Expiration of manually input TC 971 AC 061 block: Any manual input of TC 971 AC 061 will systemically expire 52 cycles later. The DLN in TC 972 AC 061 will display a series of "8" s.
If the FPLP block is still needed, the collection employee will need to manually input the TC 971 AC 061 again before the TC 972 AC 061 posts.
Status update change: When a FPLP module that has either a systemic or manual TC 971 AC 061, moves into a non-FPLP status, i.e. Status 58 or Status 72, it is systemically reversed with TC 972 AC 061. The DLN in the TC 972 AC 061 will display a series of 9s.
If a FPLP module has a manual TC 971 AC 061 block and then updates to a non-FPLP status, then the expiration rule to systemically unblock will take precedence.
Certain Status 22 (ACS) inventories, including most FERDI cases. See IRM 5.19.9.3.2.4. The DLN in the TC 972 AC 061 will display a random series of numbers.
FPLP payments are systemically identified with a TC 670 DPC 18 or DPC 19.
There may be situations where a levied payment may be returned. Returning the levied proceeds must be approved by the delegating official authorized to return levy proceeds as directed under Delegation Order 5-3 and in accordance with IRM 5.11.2.4, Returning Levied Property to the Taxpayer. FPLP levy payments can only be refunded if the payment date is within 9 months preceding the request for return of funds. FPLP levy payment dates should be verified before refunding the payment. Process the return of FPLP levy proceeds using the manual refund procedures found in IRM 5.1.12.20, Cases Requiring Special Handling, Manual Refund. For cases involving Identity Theft, refer to IRM 5.1.28.4.1.1, Returning Levied Property in Cases of Identity Theft.
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, as discussed in IRM 5.11.2.4, 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.
In situations where the levy was released due to a finding of economic hardship or because the taxpayer entered into an installment agreement, the levied payment may be returned to the taxpayer subject to the nine month look-back period stated in (2); generally, it is in the Government's best interest to do so. See IRM 5.11.2.4.1(4). However, if the taxpayer requests that the IRS keep the funds, the IRS should follow the taxpayer's instructions.
The TC 670 DPC 18/19 payment will need to post on the account prior to taking these manual refund actions.
In situations where a paper levy and FPLP levy attached the same federal payment simultaneously (known as a 'double levy') and both levies' proceeds from the same pay date are posted on the account, then the paper levy proceeds will need to be returned in accordance with IRM 5.11.2.4. Both levies should not be in effect on the same payment, where 15% of the payment was attached by the FPLP and the paper levy attaches the remaining amount (or however the federal payment agency calculated the payment to satisfy both the levies). Since the paper levy should not have been issued because the FPLP is indicated on the account, then the paper levy proceeds need to be refunded, as the administrative procedures were not followed to prevent simultaneous or 'double' levies. In certain situations, the FPLP levy proceeds may be returned in lieu of the paper levy proceeds, particularly if the FPLP is removed (released or blocked) from the account, and the paper levy is attaching the federal payment.
Taxpayer J. Flounder's federal employee salary payment for March 2016 was levied for 15% through the FPLP, but a paper levy was also issued by Revenue Officer L. Lemonsole, which attached the remaining amount. Revenue Officer Lemonsole did not block (TC 971 AC 061) the FPLP prior to issuing the paper levy and did not put the paper levy in continuous levy (Status 60) status to prevent the FPLP. Taxpayer Flounder's employer did not stop the paper levy disbursement, and remitted Taxpayer Flounder's salary proceeds for the paper levy while the FPLP systemically levied also. The paper levy proceeds should be returned and refunded to Taxpayer Flounder, along with releasing the paper levy.
The Alaska Permanent Fund Dividend (AKPFD) Levy Program is an automated levy program, which operates in conjunction with the State of Alaska, Department of Revenue, Permanent Fund Dividend Division (PFDD).
Information pertaining to the AKPFD criteria, process and procedures can be found under IRM 5.19.9, Collection, Liability Collection, Automated Levy Programs.
The Municipal Tax Levy Program (MTLP) is the newest of the four automated levy programs. MTLP matches a Master File database of delinquent taxpayers eligible to be levied against a database of local income tax refunds for each municipality participating in MTLP.
Information pertaining to the MTLP criteria, process and procedures can be found under IRM 5.19.9, Liability Collection, Automated Levy Programs.
EB0 Import/Export Bank of the U.S.
This table is a matrix that displays what types of federal payments are levied in the FPLP; what levy type code is displayed under Miscellaneous Field (TC 971 AC 662, 677 or 762); what account TINs are matched against the payments; and the levy percentage of the payment. For example, the SSA payments are levied for 15% against the IMF primary or secondary SSN, BMF (sole prop) XREF SSN, and BMF primary SSN. IRM 5.11.7.2.1.1.
J Unreversed TC 971 AC 365, 366 posted on any tax module prior to January 2009 LLC Disregarded Entity- only employment tax periods prior to January 2009 will be excluded from the FPLP. Other tax periods or employment tax period after January 2009 may be selected.
The values for positions 7, 8, 9, & 10 identify the Federal Payment Agency.
Exhibit 5.11.7-6. for a complete list of the Federal Payment Agency Identifier Code List.
The DLN listed above would indicate that BFS matched (position 13 = 0) records with OPM (positions 7, 8, 9 & 10) on an OPM payment (positions 11, 12 & 13).
Match — OPM (Federal source) on federal retirement payment.
Levy — SSA (Federal source) on Social Security benefit payment.
Levy — National Finance Center (Federal source) on federal salary payment.
Match - RRB (Federal source) on railroad retirement benefit.
The "Miscellaneous Field" literal may or may not display a 3 character "suboffice code" to the salary paying agency (SPA). Exhibit 5.11.7-1.
Prior to July 2009, the "suboffice codes" under the SPA DFAS (Federal Paying Agency code 012), were erroneous. After July 2009, the suboffice codes display correctly for DFAS.
The "XREF Field" literal will display the TIN (SSN or EIN) of the matched individual or entity.
0000 Recent Federal contract awarded; Federal agency to be identified when levy payment identified under TC 971 AC 062 >Levy< .
0324 Bureau of the Fiscal Service - Admin.
0600 Pension Benefit Guaranty Corp.
This one-page BFS notice explains that the taxpayer's Federal payment was reduced by BFS because of the levy action by the IRS FPLP. It displays what type and how much Federal payment was expected and the IRS account information to where the portion of that Federal payment was applied. It also displays IRS office information for the taxpayer to contact the IRS.

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