CTRS IRS Collections and Enforcement Flashcards

What is the difference between a tax lien and a tax levy?

Answer: A lien is a legal claim against property; a levy is the actual seizure of property to satisfy the debt

A federal tax lien is a legal claim that secures the government's interest in a taxpayer's property, while a levy is the actual taking of property to satisfy the tax debt.

What is the IRS's 'Compliance Roadmap' in the context of collection enforcement?

Answer: A visual guide showing the sequence of IRS notices and collection actions from assessment to levy

The IRS Compliance Roadmap is a publicly available visual guide that shows taxpayers the sequence of notices and actions the IRS takes from assessment through levy and beyond.

Under what circumstances may the IRS disclose tax information to state agencies?

Answer: Under IRC §6103 exceptions that permit disclosure to state tax agencies for tax administration purposes

IRC §6103 generally protects the confidentiality of tax returns but contains specific exceptions allowing disclosure to state tax agencies for tax administration purposes.

What happens to a federal tax lien when the CSED expires?

Answer: The lien becomes legally unenforceable and the IRS must release it upon request

When the 10-year CSED expires, the federal tax lien is extinguished because the underlying liability can no longer be legally collected.

Which IRS publication provides the most comprehensive overview of the IRS collection process for practitioners?

Answer: IRS Publication 594 (The IRS Collection Process)

IRS Publication 594 is the primary publication explaining the IRS collection process, including notices, liens, levies, and payment options.

A taxpayer's bank account is levied. How many days does the bank hold the funds before remitting them to the IRS?

Answer: 21 days

When the IRS levies a bank account, the bank must hold the funds for 21 days before remitting them to the IRS, giving the taxpayer time to resolve the issue.