CTRS CTRS IRS Collections and Enforcement 1 — Questions and Answers
Question 1: What is the primary IRS unit responsible for collecting delinquent tax debts from individuals and businesses?
- Automated Collection System (ACS) (Correct answer)
- Office of Appeals
- Criminal Investigation Division
- Taxpayer Advocate Service
Correct answer: Automated Collection System (ACS)
The Automated Collection System (ACS) is the IRS's centralized phone-based unit that handles delinquent accounts before they are assigned to a Revenue Officer.
Question 2: A Revenue Officer is assigned to a delinquent taxpayer's case. What does this generally indicate?
- The case has escalated beyond ACS and requires in-person field collection (Correct answer)
- The taxpayer has filed for bankruptcy
- The IRS is waiving the debt
- The taxpayer qualifies for Currently Not Collectible status
Correct answer: The case has escalated beyond ACS and requires in-person field collection
Assignment to a Revenue Officer typically means the case has escalated to field collection because ACS was unable to resolve it remotely.
Question 3: What is the standard federal tax lien priority rule under IRC Section 6323?
- A federal tax lien is valid against third parties only after a Notice of Federal Tax Lien is filed (Correct answer)
- A federal tax lien automatically takes priority over all other creditors upon assessment
- A federal tax lien is junior to all state tax liens
- A federal tax lien requires court approval before it becomes effective
Correct answer: A federal tax lien is valid against third parties only after a Notice of Federal Tax Lien is filed
Under IRC §6323, a federal tax lien is not valid against purchasers, holders of security interests, mechanic's lienors, or judgment lien creditors until a Notice of Federal Tax Lien (NFTL) has been properly filed.
Question 4: How long does the IRS generally have to collect assessed taxes under the Collection Statute Expiration Date (CSED)?
- 10 years from the date of assessment (Correct answer)
- 3 years from the date of filing
- 7 years from the date of assessment
- Indefinitely until collected
Correct answer: 10 years from the date of assessment
Under IRC §6502, the IRS has 10 years from the date of assessment to collect a tax liability, after which the debt is legally uncollectible.
Question 5: Which IRS action requires the taxpayer to be notified at least 30 days before the IRS can seize property?
- Final Notice of Intent to Levy (Correct answer)
- Notice of Federal Tax Lien filing
- Substitute for Return preparation
- Trust Fund Recovery Penalty assessment
Correct answer: Final Notice of Intent to Levy
The IRS must issue a Final Notice of Intent to Levy (Letter 1058 or LT11) and allow at least 30 days before seizing a taxpayer's property.
Question 6: What type of IRS levy directly intercepts a taxpayer's wages before they are paid?
- Continuous wage levy (Correct answer)
- Bank levy
- Seizure levy
- State refund levy
Correct answer: Continuous wage levy
A continuous wage levy attaches to future wages and remains in effect until released, unlike a bank levy which is a one-time seizure of funds on deposit.
CTRS CTRS IRS Collections and Enforcement 1
What is the primary IRS unit responsible for collecting delinquent tax debts from individuals and businesses?