Opinion ID: 3062052
Heading Depth: 2
Heading Rank: 1

Heading: irs collection procedures

Text: If a taxpayer neglects or refuses to pay his taxes after assessment, notice, and demand, a lien arises in favor of the United States “upon all the property and rights to property” belonging to the taxpayer. 26 U.S.C. § 6321; see Drye v. United States, 528 U.S. 49, 55 (1999) (“[T]o satisfy a tax deficiency, the Government may impose a lien on any ‘property’ or ‘rights to property’ belonging to the taxpayer.”). Before the Commissioner may levy on the taxpayer’s property, however, he must notify the taxpayer of the right to request a CDP hearing before the Office of Appeals. See 26 U.S.C. § 6320(a), (b); id. § 6330(a), (b); T.D.O. No. 150-10 (Apr. 22, 1982) (delegating to Commissioner the enforcement authority of the Secretary of the Treasury under Internal Revenue Code). The settlement officer (also known as the appeals officer) must determine whether the “proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the [taxpayer] that any collection action be no more -2- intrusive than necessary.” 26 U.S.C. § 6330(c)(3)(C); see Living Care Alternatives of Utica, Inc. v. United States, 411 F.3d 621, 624–25 (6th Cir. 2005). At the CDP hearing a delinquent taxpayer can submit, among other collection alternatives, a proposed installment-payment plan to satisfy the tax liability. See 26 U.S.C. § 6330(c)(2)(A)(iii). Ordinarily, as here, the Commissioner “has the discretion to accept or reject any proposed installment agreement.” 26 C.F.R. § 301.6159-1(c)(i). Acceptance or rejection of a proposed installment plan is to be “based on the taxpayer’s current financial condition.” Taylor v. Comm’r, T.C. Memo 2010-213, 2010 WL 3835744, at  (Sept. 30, 2010). The IRS computes the taxpayer’s ability to make monthly payments by subtracting his monthly expenses from his monthly income. To ensure consistency in the computation of expenses, the Internal Revenue Manual provides national and local standards for basic needs, such as groceries and household expenses, medical expenses, housing, and transportation. See Financial Analysis Handbook, Internal Revenue Manual (IRM) ¶ 5.15.1.1(5). A deviation from the expense standards may be allowed if the taxpayer can demonstrate that the standard amount is inadequate to provide for his basic living expenses. See IRM ¶ 5.15.1.7(5). After an adverse decision at a CDP hearing, the taxpayer has 30 days to appeal to the Tax Court. See 26 U.S.C. § 6330(d)(1). -3-