ok tax people, heres a question for ya

A friend of mine asked me to help her out with a tax matter (levy of wages) and I came across this:

She received a Form 688 (notice of levy on wages, salary, and other income ) detailing what they claim she owes. On the back of this form, it detailed which section of the IRC gave them the authority to levy.

It starts with Section 6331 of the IRC (levy and distraint), yet curiously enough it avoids the A) section of 6331 and begins with B). I found it odd they would leave out the first part of that section, so I looked it up and found this:

(a) Authority of Secretary

If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property (except such property as is exempt under section 6334)belonging to such person or on which there is a lien provided in this chapter for the payment of such tax. Levy may be made upon the accrued salary or wages of any officer, employee, or elected official, of the United States, the District of Columbia, or any agency or instrumentality of the United States or the District of Columbia, by serving a notice of levy on the employer (as defined in section3401(d)) of such officer, employee, or elected official. If the Secretary makes a finding that the collection of such tax is in jeopardy, notice and demand for immediate payment of such tax may be made by the Secretary and, upon failure or refusal to pay such tax,collection thereof by levy shall be lawful without regard to the 10-day period provided in this section.


ok, now 2 questions:

Where does the authorization to charge interest come from? They are charging her at a rate of 7%.

Secondly, could the bolded phrase be twisted in legalese to show that levies may only occur to those people mentioned?

[edit on 5-2-2008 by slackerwire]

[edit on 5-2-2008 by slackerwire]

Tell her to vote for Ron Paul (abolish IRS, yadda, yadda), not pay her taxes right now, and hire Snipe's Lawyer!

I think someone needs to pull a fire drill, so that everyone is safe outside of the IRS building, and blow it to smithereens.

Best idea here, talk to a tax attorney or someone who does taxes.

This is from the IRS website:


20.2.2.1 (07-31-2001)
Authorization
In accordance with Internal Revenue Code (IRC) sections 6601 (a) and (b) and 6611, the payment of interest is required unless specifically prohibited by law or mutual agreement.

IRC section 6601(a) states that if any amount of tax is not paid on or before the last date prescribed for payment, interest on such amount at the underpayment rate established under IRC section 6621 shall be paid for the period from such last date to the date paid.



In regards to your second question:

The section you referenced was specifically included to PREVENT government employees, high officials and politicians from using thier position to avoid the stated penalities.

The provisions would have to be negated or eliminated by a revision of the Internal Revenue Code.

I seriously doubt that any politician successfully sneaking such a revision through to enactment would long survive to finish his/her term once the change became public knowledge!


And before you ask, Yes, I am a (corporate) "tax person", for the state of California.

Bhadhidar-

I have found conflicting info on numerous websites, is a court order from a federal district judge required before a garnishment/levy may be put in place?

"Our system of taxation is based upon voluntary assessment and payment, not upon distraint." -The Supreme Court
Flora v. United States, 362 U.S. 145, pg. 176

Source

Enjoy

[edit on 5-2-2008 by WhiteWash]

Contact teamlaw.org

Social Security is a Trust. "Your" relationship is loaning physical and mental consciousness to that of Trustee.

Never trust a web site with matters of importance.

If you want to know, go to the (Internal Revenue) Code, the source.

Remember, if you base your actions on some else's mis-interpetation or mis-representation it is not Them who will be held responsible by the Powers That Be, it's You!

I am not in the collections division of my agency, and as I have stated previously, I generally do not handle Personal Income Tax cases, although I've "Been There, and Done That" in the past. To my knowledge, however, once an account has gone into collections as a result of an unpaid debt, a levy, lien, or wage garnishment may be emplaced without any involvement of the court system, federal or otherwise.


Now let's make sure we understand some terms here:

A Lien is a action emplaced against real property attached by legal ownership. As an example, real estate is the most common form of real prperty the IRS may impose a lien against. That does not mean the the IRS seizes the property; just that if/when you sell the property, the procedes of the sale will be paid to the IRS, up to the amount owed or the amount of the lien, whichever is less.

A Garnishment is an encumberence of wages or other compensation imposed against an employee, usually representing a percentage of the employees wages, for the payment of an established debt. Garnishments require the participation of the employer (who withholds the directed amount and remits it to the garnishing agency) and are subject to various restrictions and limitations.

A Levy is usually an order served upon a financial institution, instructing it to restrict access to a specified account for a specified amount. The account's owner may be denied access to the held account until/unless the amount specified by the levy instrament is either remitted to the issueing agency, or recinded by that agancy.


And finally, WhiteWash, the term Voluntary, when employed in reference to our system of taxation, and is most often mis-represented/mis-construed to somehow mean that we can choose whether or not to pay taxes, actually referes to How the tax is imposed, not whether it is imposed.

Voluntary, in this sense simply means that the tax is imposed (calculated) and paid at a specified time, removed from the actual moment of the taxable transaction: Your personal income tax is due on April 15th, not when you recieve each paycheck.

Do not confuse withholding for income taxes as payment of income taxes.


An Involuntary system of taxation would be analogous to a national Sales Tax system, wherein you would be paying the tax owed at the time of the taxable transaction, as an integral part of the transaction.

It's a bit more complicated than that , but I hope you get the idea.