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Part 5. Collecting Process

Chapter 1. General Collecting Procedures

Section 7. Government Agencies, Federal Employees/Retirees, Military Personnel and Department of Defense Employees

5.1.7  Government Agencies, Federal Employees/Retirees, Military Personnel and Department of Defense Employees

5.1.7.1  (01-24-2001)
Small Business Administration (SBA)

  1. When a taxpayer with an SBA loan becomes tax delinquent, both the Service and the SBA have a need to protect the government's interest. The SBA and the Service entered into an agreement to assure that Service enforcement action will not unnecessarily reduce SBA's potential recovery. The agreement is limited to FICA and withholding tax liabilities and covers all types of SBA loans:

    • Direct

    • Participation

    • Guaranteed

5.1.7.1.1  (01-24-2001)
Communication With SBA

  1. At the national level, a liaison will be established between the Director, Collection Policy and the Office of the Associate Administrator for Finance and Investment.

    1. These officials, or their designees, will meet at least twice a year to discuss areas of mutual concern.

  2. At the area level, establish a liaison between the Area Director and the Office of the SBA District Director. These officials, or their designees will:

    1. meet on an "as needed" basis at mutually agreed upon times, and

    2. exchange training material and personnel to address training sessions on an "as agreed" basis.

  3. At the territory level, establish a liaison between designated territory coordinators for each agency. Communication at this level is most critical to resolve specific case problems expeditiously.

    1. The Service coordinator will contact SBA when enforcement action is contemplated and the taxpayer has an outstanding SBA loan.

    2. The SBA coordinator will contact the Service if it becomes known that the borrower is delinquent in filing or paying federal taxes.

5.1.7.1.2  (01-24-2001)
Disclosure to SBA

  1. The Service can disclose only names, addresses and amounts of taxpayer's liabilities. These can be disclosed only to secure additional financial information from the SBA in accordance with IRC 6103 (k) (6). You should consult with the Area's Disclosure Officer or SBA Coordinator prior to contacting SBA regarding taxpayers.

    Caution:

    Provide no copies of tax returns to the SBA.

5.1.7.1.3  (01-24-2001)
Collection Procedures

  1. When it is determined that a business taxpayer has an outstanding SBA loan and enforcement action is planned, contact the Area's SBA coordinator who will then inform SBA of the pending enforcement.

    Note:

    This also includes planned filing of a Federal Tax Lien

  2. Upon receiving notice of pending enforcement action SBA will, within a mutually agreed time frame, evaluate the taxpayer's potential to fully pay the tax deficiency. If SBA believes the business is financially viable, it will consider all methods to make cash flow available to satisfy the delinquent taxes. This includes: deferment or reduction of loan payments, payments by participating banks, subordination, release of assignment or collateral, supplemental loans, etc.

  3. Normally, after notifying the SBA, the Service will suspend enforcement, including the filing of a Federal Tax Lien, during the agreed upon evaluation period. If, at any time during the evaluation period, SBA determines that the taxpayer is not financially viable, SBA should inform the Service immediately.

  4. In instances where, in the Service's judgement, the government's interest would be jeopardized by delay, the area coordinator will notify the SBA of the imminent enforcement action planned.

  5. Document all actions and decisions pertaining to our coordination with the SBA and make them part of the case file.

5.1.7.1.3.1  (01-24-2001)
Procedures When Agency Coordinators Disagree

  1. If agreement cannot be reached between the two agency coordinators, refer the matter through Collection management channels to the Area Director for decision.

  2. The SBA may appeal matters that cannot be resolved at the area level to their national office. SBA national office officials will explore ways to provide additional cash flow to the taxpayer and will advise their area office accordingly.

5.1.7.2  (01-24-2001)
Small Business Investment Companies (SBICs)

  1. SBICs are privately owned and managed investment companies that are licensed, regulated and funded through the Small Business Administration (SBA) under the Small Business Investment Act of 1958.

  2. The purpose of SBICs is to provide equity and long-term funds to independently owned and operated small businesses. The SBA provides some funding to SBICs, regulates them on a continuous basis and is required by statute to examine each SBIC once a year.

5.1.7.2.1  (01-24-2001)
Procedures to be Used When an SBIC Funded Business Is Tax Delinquent

  1. When the Collection function becomes aware that a delinquent taxpayer is funded by a SBIC, before taking any enforcement action, the revenue officer will meet with the taxpayer and a SBIC representative to determine what mutual actions can be taken to bring the taxpayer current in his/her tax obligations.

  2. All other procedures in IRM 5.1.7.1 and in this chapter apply.

5.1.7.3  (07-01-2005)
U.S. Secret Service Guidelines

  1. During the course of an investigation, Collection may learn of situations which should be reported to the U.S. Secret Service. These situations would involve the Secret Service's duties regarding protective services, forgery or counterfeiting.

  2. Report emergency information, especially regarding threats against the President, Vice President, etc., immediately by telephone to the nearest U.S. Secret Service office or the U.S. Secret Service Intelligence Division, Washington, DC 202-406–8000.

  3. In any case where an employee is concerned that the disclosure may involve a return, return information or taxpayer return information as defined in IRC 6103 (b), contact the Disclosure Officer for guidance as to the proposed disclosure.

  4. Send routine reports to the office of the Director, Collection Policy (SE:S:C:CP), who will forward them through liaison channels to the U.S. Secret Service Headquarters.

5.1.7.3.1  (07-01-2005)
Protective Responsibilities

  1. Under Title 18, U.S. Code, Section 3056, the U.S. Secret Service is charged with protecting:

    • the President, the Vice President, (or other individuals next in order of succession to the Office of the President), the President-elect and Vice President -elect.

    • the immediate families of the above individuals.

    • former Presidents, and their spouses for their lifetimes, except when the spouse remarries. In 1997, Congressional legislation became effective limiting Secret Service protection to former Presidents for a period of not more than 10 years from the date the former President leaves office.

    • children of a former President until age 16.

    • visiting heads of foreign states or governments and their spouses traveling with them, other distinguished foreign visitors to the United States, and official representatives of the United States performing special missions abroad.

    • major Presidential and Vice Presidential candidates and their spouses within 120 days of a general Presidential election.

5.1.7.3.2  (01-24-2001)
Protective Information

  1. To carry out its protective duties the U.S. Secret Service has requested that the Service provide information (follow IRM 5.1.7.3 (4) above to transmit the information):

    1. pertaining to a threat, plan or attempt by an individual, a group, or an organization to physically harm or embarrass the persons protected by the U.S. Secret Service, or any other high U.S. Government official at home or abroad.

    2. pertaining to individuals, groups or organizations who have plotted, attempted or carried out assassinations of senior officials of domestic or foreign Governments.

    3. concerning the use of bodily harm or assassination as a political weapon. This should include training and techniques used to carry out the act.

    4. on persons who insist upon personally contacting high Government officials for the purpose of redress of imaginary grievances, etc.

    5. on any person who makes oral or written statements about high Government officials in the following categories: (1) Threatening statements, (2) Irrational statements and (3) Abusive statements

    6. on professional gate crashers.

    7. pertaining to "Terrorist" bombings.

    8. pertaining to the ownership or concealment by individuals or groups of caches of firearms, explosives, or other implements of war, regarding anti-American or anti U.S. Government demonstrations in the United States or overseas.

    9. regarding anti-American or anti U.S. Government demonstrations in the United States or overseas.

    10. regarding civil disturbances.

5.1.7.3.3  (07-01-2005)
Counterfeiting and Forgery Information

  1. To carry out its duties regarding investigations of counterfeiting and forgery, the U.S. Secret Service has requested that the Service supply information (follow IRM 5.1.7.3 (4) above to transmit the information):

    1. regarding counterfeiting of U.S. or foreign obligations, i.e., currency, coins, stamps, bonds, U.S. Treasury checks, Treasury securities, Department of Agriculture food coupons, debit cards and postage stamps.

    2. relating to the forgery, alteration and fraudulent negotiation of U.S. Treasury checks and U.S. Government bonds.

5.1.7.4  (01-24-2001)
U.S. Citizenship and Immigration Services (USCIS)

  1. There is ongoing contact between USCIS and the Service. Programs cover two areas:

    1. Aliens legally admitted to the U.S.

    2. Aliens who entered the U.S. illegally

  2. Returns and return information are confidential pursuant to Code section 6103. To the extent the disclosure of the returns or return information to USCIS is considered, there must be a statutory exception to this confidentiality rule before any disclosures occur. See IRM 11.3, Disclosure of Official Information, for information on the disclosure of returns and return information.

  3. Certain programs ensure that nonresident aliens, who are authorized by USCIS to enter the U.S., are aware of Federal tax requirements, and are meeting their obligations.

  4. Other efforts are geared to aliens who have entered the country illegally and are apprehended by USCIS. Many of the illegal aliens are paid low wages and have limited tax potential. However, those illegal aliens apprehended with the potential for significant tax liabilities are referred to IRS.

5.1.7.5  (01-24-2001)
Information Compelled From A Witness Under Grant of Immunity

  1. Occasionally, revenue officers may need information that a witness was compelled to supply under a grant of immunity from prosecution. This immunity can be granted by:

    • Congressional Committees

    • certain Federal and State agencies

    • courts

    • grand juries

  2. Information that is directly or indirectly derived from evidence or testimony which an immunized witness was compelled to supply cannot be used against that witness in a criminal tax case now or in the future.

    Caution:

    To ensure that any criminal tax case against an immunized witness is not inadvertently jeopardized, revenue officers must exercise caution when they:

    1. Obtain compelled information

    2. Maintain compelled information in Collection case files

5.1.7.5.1  (07-01-2005)
Revenue Officer Procedures for Obtaining Compelled Information

  1. Prepare a memorandum to the Criminal Investigation (CI), Director, Field Operations and forward it through the Field Territory Manager. The memorandum will state:

    1. What information is needed

    2. Who has the information, and

    3. Why it is needed for a case

  2. With the advice of Criminal Tax Counsel, the CI Director, Field Operations will respond to the request by:

    1. Approving

    2. Disapproving, or

    3. Placing limitations on the request

  3. Compelled testimony and other information may not be used in any other civil action during the pendency of the criminal aspects of the investigation without express written consent of the Director, Field Operations.

  4. If a prosecution referral to the Department of Justice is in effect, the concurrence of the Tax Division must be obtained prior to the non-injunctive civil use of the testimony or information.

5.1.7.5.2  (01-24-2001)
Revenue Officer Procedures for Maintaining Compelled Information

  1. Maintain any Collection case file containing compelled information so that:

    1. The compelled information and any additional information derived from it is identifiable as such.

    2. All information developed through unrelated, independent investigation is also identifiable and segregated from the compelled information.

    3. This compelled information should not be entered into an ICS case history but retain in paper form.

  2. Do not give Criminal Investigation personnel access to compelled information without a request in writing from the CI Director Field Operations to the Territory Manager.

  3. Maintain a chronological record of all Service personnel who had access to compelled information in any open case file.

  4. Revenue officers who have access to compelled information should not be subsequently assigned to any joint Criminal Investigation on the witness who furnished it.

5.1.7.6  (07-01-2005)
Federal, State and Local Government Agencies

  1. Federal, state and local governments are required to comply with all of the tax laws. Your objective is to bring delinquent government taxpayers into full compliance.

  2. Prior to contacting the government entity the revenue officer and/or their manager should contact the Federal State and Local Government (FSLG) Tax Specialist Coordinator for their Area.

  3. Government entities are identified on IDRS by Business Operating Division (BOD) Code TE and the following Employment Codes:

    1. Code F: Federal employer

    2. Code G: state or local government subject to withholding only (Form 941E filing requirements)

    3. Code T: state or local government entered into a Section 218 Agreement in accordance with the Social Security Act (Form 941 filing requirements)

      Note:

      Effective July 1, 1991, Social Security coverage was extended to state and local governmental employers who were formerly exempt. The "G" code is no longer applicable for many state and local governments.

  4. The MF Employment Codes appear in the:

    1. Master File History Section of a Bal. Due

    2. Del. Ret Information section of a Del. Ret

    3. IDRS command codes ENMOD, TDINQ, TXMOD and ACTRA.

  5. Group managers and revenue officers will identify government accounts under their control and manage them to ensure prompt resolution.

    1. Remove inappropriately coded accounts.

    2. Add the correct code to those cases which are not coded.

    3. Prepare Form 4844, Request for Terminal Action, and obtain managerial approval to correct the Employment Code.

  6. The Final Notice has been suppressed on accounts of all government taxpayers coded with Employment codes F, G, and T.

5.1.7.6.1  (01-24-2001)
State and Local Government Agencies

  1. Since July 1,1975, penalties and interest have been assessed and collected from state and local governments.

  2. Work with the state or local government agency to obtain voluntary compliance.

  3. Consider reasonable cause for penalties if the agency has taken action that will assure compliance in the near future, generally within the next six months.

  4. Notify an official in the state or local government, who has the authority to resolve the problem, about the tax delinquencies.

  5. Prior to taking enforcement action, provide the responsible official with a Final Notice. Also, notify the Territory Manager that the state or local government agency will receive a Final Notice.

  6. Do not make referrals to Headquarters regarding the assertion or collection of penalties and interest against state and local government agencies.

    Exception:

    If the issue involved is significant to tax administration a referral can be made.

5.1.7.6.2  (01-24-2001)
Federal Government Agencies

  1. Federal agencies are not exempt from the employment tax filing, paying and reporting requirements. Congress did not provide any exceptions for Federal agencies.

  2. Federal agencies follow the same employment tax filing and reporting requirements that are required by private industry. However, Federal agencies are required to make:

    1. Federal tax deposits only at a Federal Reserve Bank.

    2. Federal tax deposits on the same day payroll is paid.

  3. Federal agencies pay their financial obligations with appropriated funds: this includes employment taxes. The Comptroller General ruled (opinion B-161457) that penalties and interest cannot be paid from appropriated funds. Policy Statement P-2-4 (IRM 1.2.1.3.2) provides for non-assertion of penalties and interest against agencies or instrumentalities of the United States.

  4. Federal agencies should not receive a Final Notice. Do not serve a levy, file a lien, assess the trust fund recovery penalty, or take enforcement action. Although none of these actions are prohibited by law, it is not appropriate to use them in the case of Federal agencies.

  5. Educational efforts may be necessary to assist the Federal agencies to prevent delinquencies. Many of the delinquencies are due to lack of understanding of requirements. Refer Federal agencies to the Treasury Financial Manual (TFM 3-400) for guidance.

  6. It is important to the image of the U.S. for Federal agencies to set a good example because private employers are expected to meet all requirements of filing and paying their employment taxes timely.

5.1.7.6.2.1  (08-21-2006)
Federal Agency Cases in the Collection Field function

  1. Federal agency delinquency cases should not be worked in the Collection Field function, except in special circumstances as explained below.

  2. Federal agency delinquency cases (Balances Due and/or Delinquent Returns) can be identified by reviewing either IDRS or ICS. Federal agencies will have an "Employment Code - F." To confirm the entity is a Federal agency, check the following:

    • On ICS review the "Other entity information" screen for BMF Taxpayers

    • On IDRS review the "ENMOD" screen.

  3. If you receive a Federal agency delinquency case in your inventory, inform your group manager as soon as possible. Do not contact the Federal agency unless instructed to do so.

  4. If the Federal agency is not to be contacted, your group manager will inform you of the actions to be taken.

5.1.7.6.2.2  (08-21-2006)
Federal Agency Cases and Special Circumstances

  1. National Headquarters may require the assistance of field revenue officers (RO) to contact Federal agencies in special circumstances.

  2. National Headquarters may request, through the Area Director's office that an Other Investigation (OI) be issued for a revenue officer to take specific actions regarding a Federal agency's delinquency.

  3. Perform the requested actions within the specified time frame indicated on the OI. If the actions cannot be completed within the time frame, inform your group manager as soon as possible.

  4. When all specified actions have been completed, document a brief closing summary in the case history. The summary should include:

    • All contact information i.e., person contacted, their telephone number, position or rank within the agency, where the contact occurred (if different from the OI address)

    • The specific documents received or actions taken

  5. After completing the summary statement, submit the closed OI for approval by the group manager.

  6. Once approved, print a copy of the summary statement and the OI. Attach the statement to the OI and return it to the Headquarters analyst who issued the original request.

    Note:

    You may contact the Headquarters analyst directly if you have questions regarding the requested actions or any difficulties involving the OI.

5.1.7.7  (07-01-2005)
Federal Employee/Retiree Initiative (FERDI)

  1. The FERDI program was developed in 1993 to promote federal tax compliance among current and retired federal employees. The program incorporates the purpose and intent of Office of Government Ethics regulation 5 C.F.R. § 2635.809 which addresses the responsibility of federal employees to "satisfy in good faith their obligations as citizens, including all just financial obligations, especially those such as Federal, State or local taxes that are imposed by law." The following section contains instructions for handling federal employee and retiree delinquencies

  2. The procedures in this section apply to all taxpayers currently receiving a salary or pension from the federal government. This includes the following:

    • Civilian employees, including U.S. Postal Service

    • Civil Service or Federal Employee Retirement System retirees

    • Active duty military

    • Military retirees

    • National Guard/Reservists

    Note:

    These procedures do not apply to survivors of Federal retirees.

  3. Interview procedures for these taxpayers are the same as for any other taxpayer: use the tiered interview to obtain full payment and filing of delinquent returns today, or the best arrangement you can get.

  4. However, other procedures are different for Federal employees and retirees, and are outlined in this section.

5.1.7.7.1  (07-01-2005)
Identification of FERDI Cases

  1. All FERDI cases are identified by an entity indicator on the Individual Master File (IMF). The indicator also appears on those accounts where the secondary TIN is the federal employee or retiree. Our computer systems display the indicator by the following literals:

    • IDRS IMF ENMOD screen: FED-EMP>F

    • ICS entity screen: FED

    • IDRS TDINQ: SELECTION CODE 93

    • IDRS LEVYS: FR (Federal retiree); FE (Federal employee); DM (current military/reserve/national guard), PS (USPS)

    • ACS entity screen: F

    • ACS levy screens: FR (Federal retiree), FE (Federal employee), USPS (USPS), DMDC (Department of Defense civilian and military)

    • ACS Del. Ret screens: SELECTION CODE 93

    • CFOL cc IRPOL and SUPOL: Federal agency name (payor); SUPOL also indicates SELECTION CODE 93

    • Del. Ret SELECTION CODE 93

    • CP 515 through 518, after the notice number: F

    • W-2, W-2P, 1099R: Federal agency payor

  2. FERDI Del. Ret cases are further identified by SELECTION CODES 12 or 93. Cases for Tax Years 2000 and prior are identified by SELECTION CODE 93. Tax Years 2001, 2002 and 2003 cases are identified by SELECTION CODE 12 where the BOD is WI and SELECTION CODE 93 where the BOD is SB/SE. Starting with Tax Year 2004, SELECTION CODE 12 will be used to identify all FERDI Del. Ret cases.

    Note:

    In some instances, a FERDI case may be assigned a different selection code during IMF Return Delinquency case creation. Look for the Federal indicator code to confirm that it is a FERDI case.

  3. If a code is not present and contact with the taxpayer reveals that he/she is a Federal employee or retiree, input the Federal indicator code to IDRS with TC 971, Action Code 51.

  4. If taxpayer contact on a case with a Federal indicator reveals the taxpayer receives no Federal salary or retirement benefit, confirm this by checking IDRS cc IRPOL, IRPTRA, and/or SUPOL. If this research is inconclusive, contact as needed:

    1. Defense Finance and Accounting Service, Cleveland, OH

    2. Office of Personnel Management, Washington, D. C., for retiree cases, or

    3. Former federal employer.

    If confirmed, reverse the Federal Indicator Code with TC 972, Action Code 51.

  5. If you are sure the taxpayer isn't receiving a federal salary or pension, reverse the Federal Indicator Code with TC 972, Action Code 51. After three cycles, the system will no longer block case closures listed below in IRM 5.1.7.7.2(2).

5.1.7.7.2  (07-01-2005)
Case Processing Criteria

  1. In most instances, FERDI cases, with the exception of IRS employee cases, will be worked in ACS. Assignment to the field will be based on the current inventory prioritization guidelines applied to all cases.

  2. Programming changes were made to remove all restrictions or command code blocks for FERDI case processing except TC 530-39 and TC 530-12.

  3. Attempts to close cases in these ways will cause an unpostable condition and result in an error message or re-issuance of the case.

  4. Closures as unable to locate aren't blocked, but should be rare because levy can be made on federal salary or pension.

5.1.7.7.3  (07-01-2005)
Procedures on FERDI Cases

  1. Follow normal collection and taxpayer interview procedures with the exceptions listed below. The objective is full payment and filing of returns immediately; grant any extension of time to pay only when absolutely necessary.

  2. When entering into installment agreements with Federal employees, the use of payroll deduction agreements is encouraged, but not required.

  3. Do not close cases as CNC (hardship), unless it is evident that hardship would result from collection of even a nominal amount. Conduct a full financial analysis in order to determine that a hardship would result.

  4. Specify a mandatory follow-up each 12 months to determine whether hardship still exists.

  5. If during a taxpayer contact it appears there may be a hardship situation, refer the taxpayer to the Taxpayer Advocate Service (TAS). See IRM 13.1.7.2, Taxpayer Advocate Service Case Criteria, for referral criteria. When appropriate, prepare Form 911 and forward to the local TAS office.

5.1.7.7.3.1  (07-01-2005)
Unable to Locate

  1. In addition to required locator research, online sources such as ChoicePoint or credit report to locate the taxpayer and/or his assets is required on all FERDI cases before a Unable to Locate (UTL) determination can be made.

  2. Exhaust all levy sources before closing a case as unable to locate.

  3. If the federal salary levy is unproductive, contact the employer to determine if the taxpayer is still employed. If the taxpayer is no longer a federal employee remove the federal employee indicator with TC 972 AC 51 and process per IRM 5.16.1.2.1.

    Caution:

    Do not remove the employee indicator on taxpayers who are retired and receiving federal pensions.

  4. Upon closing the case, reverse any manually input Federal Payment Levy Program (FPLP) blocks (TC 971 AC 61) with a TC 972 AC 61 in order to allow the modules into the FPLP in the future. Manually input blocks can be recognized when the DLN does NOT display a series of 999s in the 6th through 13th position.

  5. Do not report any case as CNC (hardship) until all delinquent returns are filed and the cause of delinquency corrected, including voluntary withholding on pension income. If the taxpayer refuses to correct the cause of delinquency, consider enforced collection, unless there would be no balance due on delinquent or future tax periods. Collection on the balance due accounts will not be enforced if doing so would create a significant hardship.

  6. Managerial approval is required on ALL FERDI unable to locate dispositions.

5.1.7.7.3.2  (07-01-2005)
Offers In Compromise

  1. Offers in Compromise from federal employees will be considered. However, due to the sensitivity of issues related to federal employee tax delinquency, public policy implications must be considered in all cases. The authority to reject offers in compromise for public policy reasons is delegated to SB/SE Compliance Area Directors and Director, SB/SE Specialty Taxes and Technical Support; SB/SE Compliance Services Field Directors; Area Directors and Deputy Area Directors in Appeals. See Delegation Order No. 11 (Rev. 29) in IRM 1.2.44.4 for delegated acceptance and rejection authority for all offers in compromise.

5.1.7.7.3.3  (07-01-2005)
Federal Employee Levy Procedures

  1. Form 668-W, Notice of Levy on Wages, Salary, and Other Income may be issued or taxpayers may be subject to the Federal Payment Levy Program:

    1. Use Form 668-W, Notice of Levy on Wages, Salary, and Other Income, to attach pension income and the Retirement and Disability Survivors insurance portion of Social Security benefits. Delegation of approval authority for these levies to call site unit managers and GS-9 revenue officers is suggested. See IRM 5.11, Notice of Levy for levy procedures for federal employees.

    2. Notice of Levy, Form 668-W, has a continuing effect on the salary of National Guard/Reservists. Defense Finance and Accounting Service offices should not return these levies without remittance when the taxpayer is an active member of the National Guard/Reserves, unless the taxpayer's allowance exemptions from levy equal or exceed his or her pay.

      Note:

      Take no enforcement action if the case shows that the taxpayer is serving in a qualified combat zone. See IRM 5.1.7.9 for more information on accounts of taxpayers who serve in a qualified combat zone.

    3. The Federal Payment Levy Program (FPLP) systematically matches and levies up to 15% ( 100% with respect to payments due a vendor for goods or services sold or leased to the Federal Government) of certain federal payments disbursed by the Department of Treasury, Financial Management Service (FMS). In most instances FERDI taxpayers may already be subject to the FPLP levy. Revenue officers must decide whether to utilize the FPLP levy in their case resolution strategy. See IRM 5.11.7.2 for guidance in recognizing and handling FPLP cases.

    4. DO NOT serve a Notice of Levy, Form 668-A or Form 688-W, to the federal agency source, when the FPLP is simultaneously levying the same payment from FMS. In such instances the federal agency will return the Notice of Levy to the originator.

    5. If a Notice of Levy is the preferred method of collection, the FPLP levy must be blocked or electronically released before service. See IRM 5.11.7.2.6 for instructions on blocking or releasing the FPLP levy.

5.1.7.8  (07-01-2005)
IRS Employee Cases

  1. In addition to the Federal indicator, IRS employee cases are identified by the following codes:

    • Bal. Due — IRS EMPLOYEE

    • ENMOD — IRS- EMP

    • TXMOD — IRS- EMP

    • IMFOL — IRS EMPL

    • Del. Ret — SELECTION CODE 92 OR 02

    • ICP — ALERT INDICATOR on primary screen

      Note:

      .Del. Ret cases for Tax Years 2000 and prior are identified by SELECTION CODE 92. Tax Years 2001, 2002 and 2003 cases are identified by SELECTION CODE 02 where the BOD is WI and SELECTION CODE 92 where the BOD is SB/SE. Starting with Tax Year 2004, SELECTION CODE 02 will be used to identify all IRS employee Del. Ret cases.

  2. Also, IRS may be shown as an employer on IDRS cc LEVYS and IRPOLE.

  3. Area offices will designate an experienced revenue officer and back-up to work IRS employee cases.

    1. Bal. Due and Del. Ret cases with IRS employee indicators are systemically assigned to the Area ICS/Entity Quality Analyst (IQA) via the Integrated Collection System (ICS).

    2. The IQA is responsible for receipt, control and assignment of these cases. The IQA will notify the Area Director (AD), or a designated member of the AD's staff, by secure E-mail of all IRS employee cases within their area. These cases will be identified by Taxpayer Identification Number, name, and address as shown on the tax return.

    3. The AD is ultimately responsible for identifying any conflict of interest in assignment of IRS employee cases.

  4. Due to the sensitive nature of IRS employee cases, revenue officers designated to work them are advised to protect them against inappropriate disclosures.

  5. See IRM 5.1.11.4.7 for additional guidance in working return delinquency cases on IRS employees.

  6. Revenue officers making installment agreements with IRS employees should do so by Payroll Deduction Agreement on Form 2159. Forward the agreement to the National Finance Center for payment.

5.1.7.9  (08-21-2006)
Accounts of Taxpayers Who Serve in a Combat Zone

  1. Individual taxpayers who have been identified as Combat Zone personnel receive certain allowances under IRC section 7508. Section 7508 postpones the time for taxpayers to perform certain time sensitive acts. These time sensitive acts include:

    • Filing tax returns.

    • Paying taxes.

    • Filing claims for refunds.

    • Taking other actions with the Internal Revenue Service (IRS)

    The postponement period is for the period of service in the combat zone and any period of continuous hospitalization (if any) outside of the United States as a result of injury received while serving in the combat zone plus 180 days following such service. The IRS will also cease all enforcement actions during the postponement period.
    The postponement under section 7508 is in effect while the individual is serving the United States in the following circumstances:

    1. Serving in the United States Armed Forces (Armed Forces) or in support of the Armed Forces in an area designated as a "combat zone " by the President of the United States (President) in an Executive Order.

    2. Serving in the Armed Forces or in support of the Armed Forces when deployed outside the United States away from the individual's permanent duty station while participating in an operation designated as a "contingency operation" by the Secretary of Defense.

    3. Serving in the Armed Forces in an area designated by Congress as a "qualified hazardous duty area."

    4. The spouses of combat zone personnel listed under (a) (b), and (c) above. This does not apply if the individual considered as combat zone personnel is hospitalized.

  2. Individuals who serve in support of the Armed Forces in a combat zone also receive the postponement period under section 7508. These individuals include the following:

    • Merchant Marines serving aboard vessels under the operation and control of the Department of Defense.

    • Red Cross personnel.

    • Accredited Correspondents -

    • Civilian personnel acting under the direction of the Armed Forces in support of those Forces.

  3. Military Service performed outside a combat zone but within a "qualified hazardous duty area" is treated in the same manner as if the area was a combat zone if:

    1. The service is in direct of the military operations in a combat zone, and

    2. The service qualifies the individual for special military pay for duty subject to hostile fire or imminent danger

  4. Current combat zones and qualified hazardous duty areas include the following:

    Combat zones and Direct Support Areas

    • Afghanistan (Operation Enduring Freedom). Executive Order number (13239) designated Afghanistan and the airspace above as a combat zone. September 19, 2001, is the date of commencement of the combatant activities.
      Members of the Armed Forces located in the following locations were or are in direct support of this combat zone:
      Pakistan, Tajikistan, and Jordan from September 21, 2001 - December 31, 2005.
      Kyrgystan and Uzbekistan as of October 1, 2001.
      The Republic of the Philippines as of January 9, 2002.
      Yemen as of April 10, 2002

    • Operation Allied Force / Kosovo Area. Executive Order number (13119) designated the Federal Republic of Yugoslavia (Serbia/Montenegro), Albania, the Adriatic Sea, and the Ionian Sea north of the 39th parallel including the airspace above these areas, beginning March 24, 1999.

    • Arabian Peninsula / Operation Desert Storm and Iraqi Freedom. Executive Order number (12744) designated the Arabian Peninsula areas effective January 17,1991. The specific areas included in this Executive Order are:
      The Persian Gulf, the Red Sea, the Gulf of Oman, the part of the Arabian Sea that is north of 10 degrees north latitude and west of 68 degrees east longitude, the Gulf of Aden and the total land areas of Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab Emirates and the airspace above all such locations.
      Members of the Armed Forces located in the following locations were or are in direct support of this combat zone:
      Turkey from January 1, 2003 - December 31, 2005.
      Israel from January 1, 2003 - July 31, 2003.
      The Mediterranean Sea east of 30 degree East longitude from April 11, 2003 - July 31, 2003.
      Syria, Jordan, and Egypt as of January 1, 2004

    Qualified Hazard Duty Areas Public Law 104 - 117 - Established Bosnia, Herzegovina, Croatia and Macedonia as qualified hazardous duty areas as of November 21, 1995.

    Note: