IRS has wrongfully levied my Social Security Disability benefits!


K

Kelly

Hi, the IRS has wrongfully and illegally levied my Social
Security disability benefits for back taxes from 1992!!! No
notice, no explanation, nothing. They did not even follow
their own procedures. I need to sue them in Federal Court to
get my money back. They owe me $200. Can anyone please tell
me where I can find sample forms to fill out? The money they
owe me is irrelevant--it is the principle that matters to
me.

Also, I know the minimum claim in Federal District Court is
$50,000, but the amount I am claiming is only $200; but I
might also might try to sue for speicific performance to get
around this, or file for emotional damage to make the total
$50,000. If I can just tie up one of their lawyers for just
a few hours, they might be willing to negotiate since the
amount is so small, and not worth the lawyer's fees. Thanks!
 
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V

Vic Dura

Also, I know the minimum claim in Federal District Court is
$50,000, but the amount I am claiming is only $200;
I believe there is, or used to be a "small claims" tax
court. I wonder if that would be an option?
 
T

TaxSrv

Kelly said:
Also, I know the minimum claim in Federal District Court is
$50,000, but the amount I am claiming is only $200; but I
might also might try to sue for speicific performance to get
around this, or file for emotional damage to make the total
$50,000. If I can just tie up one of their lawyers for just
a few hours, they might be willing to negotiate since the
amount is so small, and not worth the lawyer's fees. Thanks!
Gov't doesn't have to pay outside lawyers; and they will not
"settle" small claims which set an erroneous precedent, so
what you propose to do won't do what you think it will. The
people you deal with at IRS on your delinquent account need
not even be informed internally you filed such a suit. And
the gov't attorneys working your suit need not even talk to
you much, if in such a "pro se" case they found little
merit. Just be on time for court in the first dismissal
motion.

Fred F.
 
M

MTW

Kelly said:
Hi, the IRS has wrongfully and illegally levied my Social
Security disability benefits for back taxes from 1992!!! No
notice, no explanation, nothing. They did not even follow
their own procedures. I need to sue them in Federal Court to
get my money back. They owe me $200. Can anyone please tell
me where I can find sample forms to fill out? The money they
owe me is irrelevant--it is the principle that matters to
me.
Have you referred this matter to your Congressperson?

MTW
 
H

Harlan Lunsford

Kelly said:
Hi, the IRS has wrongfully and illegally levied my Social
Security disability benefits for back taxes from 1992!!! No
notice, no explanation, nothing. They did not even follow
their own procedures. I need to sue them in Federal Court to
get my money back. They owe me $200. Can anyone please tell
me where I can find sample forms to fill out? The money they
owe me is irrelevant--it is the principle that matters to
me.

Also, I know the minimum claim in Federal District Court is
$50,000, but the amount I am claiming is only $200; but I
might also might try to sue for speicific performance to get
around this, or file for emotional damage to make the total
$50,000. If I can just tie up one of their lawyers for just
a few hours, they might be willing to negotiate since the
amount is so small, and not worth the lawyer's fees. Thanks!
From reading what you wrote,I get impression you admitted to
owing the taxes, in which case they may levy on any federal
payments. If 200$ closes that year, accept it and get over
it.

Cheer$$$$$,
Harlan Lunsford, EA n LA
 
E

Ed Zollars, CPA

Kelly said:
If I can just tie up one of their lawyers for just
a few hours, they might be willing to negotiate since the
amount is so small, and not worth the lawyer's fees. Thanks!
As Fred notes, since the Justice Department attorney in
question will get his same paycheck whether he's dealing
with you or the next case on the docket, what is going to
happen is that *your* time and money are going to be the
ones being wasted.

As well you will need to have all of your i's dotted and t's
crossed on the legal theory of your claim--you say the IRS
didn't follow their own procedures. Well, what will matter
is whether they failed to follow any procedure the agency is
legally required to follow, not whether they handled your
case outside of some guidelines they have established
internally. If you don't understand the distinction in terms
of legal standing and nature of being "binding" on the IRS
between the Internal Revenue Code, the Internal Revenue
Manual and IRS Publications, you are going to get this one
wrong.

As well, the actual merits of the issue will be a factor in
front of a judge--if you truly owe the $200, the judge is
far less likely to grant you any relief for an IRS "foot
fault" on some technicality. Judges generally do not like
granting victories on technicalities when they can see that
such a result is unjust. They do it from time to time, but
generally only if they find no to rationalize a different
result.

Like Fred, I see it as very possible that the Justice
Department attorney will only be interested in telling you
that your only option is to drop the case. If the attorney
believes your case is truly meritless, you may find your
claim for emotional damages will be met with a counter-claim
for the government's costs in defending a frivilous suit.

Now, that said, it's possible you do have a valid issue and
claim--from your post this certainly can't be determined.
But even if that is the case, reality is that if this is
over $200 the most cost-effective option to forget about it
and move forward. That's true many times over if, in fact,
you owe the $200--the judge very nicely could order the
government to return your $200 as soon as you pay $200 (in
essence, you are back "on the carpet" for the original tax).

Finally, I suspect that even if you have a case, you'd have
to first exhaust your administrative remedies--and that
would mean filing a formal claim for the $200 that the IRS
could act on. If you haven't exhausted your administrative
remedies, that will be issue one in the motion to dismiss
your case.
 
P

Phil Marti

I suspect that even if you have a case, you'd have
to first exhaust your administrative remedies--and that
would mean filing a formal claim for the $200 that the IRS
could act on. If you haven't exhausted your administrative
remedies, that will be issue one in the motion to dismiss
your case.
Unlike refund claims, there's no requirement to use the
administrative procedure before bringing suit for wrongful
levy. The bigger problem for the taxpayer may be finding a
consent statute.

Before TBOR2 IRS had no authority to return levied property
if the taxpayer owed the tax. No wiggle room at all. IRS
asked for refund authority when it determined after the
turnover of property that the levy, while legal, was
improper.

Instead of giving refund authority, Congress added IRC
6343(d), which says that this type of situation will be
treated the same as a wrongful levy claim under IRC 6343(b).

The consent statute for wrongful levy is IRC 7426(a)(1).
Unfortunately this section is "civil actions by other than
taxpayers." It's anyone's guess as to whether Congress
wanted the 3643(d) claim to qualify for this kind of suit or
whether Congress once again conferred a right without a
remedy, save the administrative procedure.

AFAIK, there's been no litigation.

Phil Marti
Topeka, KS
 
E

Ed Zollars, CPA

Phil said:
AFAIK, there's been no litigation.
And, unfortunately, when you have that situation the "smell" of the
first case that does come up will tend to create the answer--since
there would be no precedent and the law could be read either way, if
the first case has a "bad smell" on the part of the taxpayer, which
way do you think the first decision will go <grin>? From that point
forward it then becomes a problem even if the next case doesn't
"smell" because they have to work to distinguish it.
 
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D

D. Stussy

... Judges generally do not like granting victories on
technicalities when they can see that such a result is
unjust. They do it from time to time, but generally only
if they find no to rationalize a different result.
Then you need to come to Los Angeles and see how much the
Central District Judges DO kill cases on technicalities.
Anything to dismiss a case (in favor or either party) to
reduce their workload seems to be the rule around here. :-(

Fortunately, that's not true for the Tax Court. They just
make bad rulings.

Our Appelate court, being the 9th Circuit, which covers you,
is just the same. I caught a U.S. Senate hearing about
splitting the circuit about 2 weeks ago, and that showed how
overloaded our circuit is, and even a three-way split was
suggested.
Like Fred, I see it as very possible that the Justice
Department attorney will only be interested in telling you
that your only option is to drop the case. If the attorney
believes your case is truly meritless, you may find your
claim for emotional damages will be met with a counter-claim
for the government's costs in defending a frivilous suit.

Now, that said, it's possible you do have a valid issue and
claim--from your post this certainly can't be determined.
But even if that is the case, reality is that if this is
over $200 the most cost-effective option to forget about it
and move forward. That's true many times over if, in fact,
you owe the $200--the judge very nicely could order the
government to return your $200 as soon as you pay $200 (in
essence, you are back "on the carpet" for the original tax).
I agree that such a small amount doesn't merit a court
claim. However, try the Taxpayer Advocate's office.
 

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