Automated Levy Programs are divided into three categories:

Each levy program selects modules using slightly different criteria. Bankruptcy, Installment Agreement and Offer in Compromise accounts are excluded from the ALPs.

Agreements or a memorandum of understanding have been established with Financial Management Service (FMS) for FPLP or each state for SITLP and the Alaska Permanent Fund Dividend Levy Program (AKPFD).

The procedures in this section are specific to ALPs such as:

Other issues such as can't pay and don't owe are covered throughout IRM 5.19, Liability Collection.

Correspondence and notices for these programs will contain one of the following Automated Collection System (ACS) telephone numbers:

ALP notices only reflect the balance due as of the date of the corresponding TC 971 that indicates an ALP notice was issued. These notices, however, advise the taxpayer to pay the balance within 30 days. Since the notices cannot/do not reflect a future balance, a systemic grace period is provided for calculation of interest and failure to pay. Any payments received within the grace period are systemically tabled to the date of the TC 971. See LEM 5.19.9.1.1.

Taxpayers may contact Compliance Services Collection Operations (CSCO), Accounts Management (AM), a Taxpayer Assistance Center (TAC), or the Taxpayer Advocate Service (TAS) to resolve ALP issues. These contacts do not have to be referred to ACS unless:

Before disclosing any tax information, you must be sure you are speaking with the taxpayer or authorized representative. See the Taxpayer Authentication guidelines in IRM 21.1.3, Operational Guidelines Overview. Also, before leaving any messages on a taxpayer's answering machine, review IRM 11.3.2.6.1 , Leaving Information on Answering Machines/Voice Mail. Fax procedures contained in IRM 11.3.1.10 , Facsimile Transmission of Tax Information, must be reviewed prior to faxing confidential information to the taxpayer. For ACS representatives, see Electronic Automated Collection Service Guide (e-ACSg) for a guide to utilize in addressing all compliance issues and controlling the incoming call conversation.

The following types of tax and collection status can be selected for levy through SITLP:

Only valid social security numbers (SSNs) are included in the SITLP.

Each module whose current status is one of the above, must have a previous Status 58 to be included in SITLP. If there is not a previous Status 58, then there must be a TC 971 AC 035 or AC 069.

Each module included in the SITLP will have a TC 971 AC 600 posted.

Modules meeting the criteria below are not subject to SITLP.

All entities that include one or more of the following UNREVERSED TRANSACTION CODES in any balance due module

Any module that has one of the following UNREVERSED TRANSACTION CODES

Each Campus has a designated SITLP Coordinator. A current listing of the SITLP Coordinators can be found on the Servicewide Electronic Research Program (SERP) web site under the Who/Where tab. The names and phone numbers are for internal use only. Taxpayers should NOT be referred to the SITLP Coordinators.

The SITLP Coordinator is a contact point between the states and the IRS Governmental Liaison (GL) for each state. Some campuses have a coordinator in Submission Processing and Compliance Services. Only W&I campuses receive SITLP levy files and checks.

SITLP Coordinator duties and responsibilities include, but are not limited to:

Pursuant to IRC 6330, SITLP will systemically issue a notice to the taxpayer, but unlike other notice requirements under IRC 6330, SITLP notices are "post-levy" notices. IRC 6330(f) requires that any taxpayer levied under SITLP shall be given an opportunity for a Collection Due Process (CDP) hearing within a reasonable amount of time after the levy if that levy is the first levy made with respect to a particular tax and tax period.

As a result of the Restructuring and Reform Act of 1998 (RRA 98) and IRC 6330, a post-levy notice, CP 92, Notice of Levy on Your State Tax Refund Notice of Your Right to a Hearing, was developed. See Exhibit 5.19.9-1. for a copy of the CP 92.

The following TC combinations will generate the CP 92:

These notices are mailed by certified mail and contain the following inserts:

The CP 92 also provides an ACS telephone number for assistance. See IRM 5.19.9.1.1. These telephone numbers are available for taxpayers to resolve their tax accounts or exercise their appeal rights.

A TC 971 AC 069 will systemically post on each module when a CP 92 is generated.

If a taxpayer previously received a CDP notice for any tax period(s) included on the SITLP levy, then a CDP notice will not be issued for those tax periods, unless there was an additional assessment after issuance of the CDP notice, and the original assessment had been satisfied.

On joint liabilities, both taxpayers will receive a CP 92. A separate notice is issued to each taxpayer in accordance with RRA 98 Section 3201(d). Two TC 971 AC 069s will post to the primary SSN; however, the second TC 971 AC 069 will include the secondary SSN in the cross-reference (XREF) field.

A separate notice will not be issued if there are problems with the name line or SSN as it relates to the secondary taxpayer. This includes:

When a SITLP match occurs and levy proceeds are received from the state, a TC 670 DPC 20 will post to the earliest tax period identified in the SITLP cartridge sent to the state. If the amount overpays the earliest tax period, it will systemically offset (TC 826/706) to the next SITLP module(s) whose balance was included in the levy or to other balance due tax periods as appropriate.

In some situations, SITLP payments are manually applied or transferred. These manual SITLP payments are posted with a TC 670 DPC 21.

SITLP levy proceeds are applied to the taxpayer account prior to issuance of the CP 92.

Generally, it takes 4 to 6 weeks or sometimes longer from the time the state receives a SITLP levy file until the time the SITLP levy proceeds are applied to the taxpayer's account. Since this is an automated levy process, timing issues may delay the process even longer.

Taxpayers may contact CSCO, AM, or TAC to resolve SITLP issues. These contacts do not always have to be referred to ACS. See IRM 5.19.9.1.1.

If contacted by a taxpayer, explain that the state tax refund was levied to satisfy a federal tax debt. The call should be considered a regular account call which will require explaining the assessment, discussing payment of any remaining balance, granting an installment agreement, or securing financial information to determine ability to pay. All of these procedures are covered in IRM 5.19.1, Balance Due .

SITLP contacts are often the result of the taxpayer receiving a notice from the state that their state tax refund was levied. Payments from states that do not use EFTPS may take up to four to six weeks to post after they have mailed the SITLP file and check to the IRS and they have notified the taxpayer; therefore, you may not see the TC 670 DPC 20 posted to the taxpayer's account. Be sure to check for a current year TC 971 AC 600 to identify active SITLP accounts. In some cases, you may have to ask the taxpayer for a copy of the letter issued by the state. If a copy of the letter has to be secured, contact should be made with the appropriate SITLP Coordinator based on the state that the taxpayer resides in. DO NOT contact state taxing agencies.

During filing season, several calls are received from taxpayers asking why IRS levied their current year state refund when their federal refund was offset to satisfy the same liability. This is primarily due to the 4 to 6 weeks it takes for a non-EFTPS SITLP payment to post to a taxpayer's account. Advise the taxpayer that there was a balance due when the SITLP levy was issued, but that payment has not yet posted to their account. Since the federal refund has been offset from their current year account and full paid the balance, when the SITLP levy payment is received, it will be refunded to the taxpayer as long as there are no other outstanding balances.

Refer taxpayer to the Taxpayer Advocate Service if appropriate per IRM 5.19.1.2.1, For All Employees, and IRM 5.19.5.5.2, Taxpayer Advocate Service/Congressionals.

If the taxpayer wants to appeal the levy action with the Office of Appeals, see IRM 5.19.8, Collection Appeal Rights.

Erroneous levies are handled by the SITLP Coordinator. See IRM 5.19.9.2.7.

In rare instances, a non-liable spouse may file a "wrongful levy" claim on a SITLP levy. A wrongful levy for SITLP would be when a portion of the state refund is attributable to the non-liable spouse's income only and the non-liable spouse may be entitled to have a portion of the money refunded. See IRM 5.19.9.2.7.

In rare instances, the state may send a state refund to IRS erroneously. When this occurs, the state will request a refund through the SITLP Coordinator. See IRM 3.17.79.3.11, Erroneous Receipt of Funds From State Income Tax Levy Program (SITLP). The SITLP Coordinator will have the appropriate research performed by CSCO, or in ACS Support if located in their campus.

The state representative will contact the appropriate SITLP Coordinator when a refund situation is identified and will prepare a memorandum requesting the required adjustment. This memorandum will be mailed or faxed to the campus SITLP Coordinator. The request will contain all entity information, as well as, the specific amount of the refund.

Wrongful levy claims are handled administratively, but non-liable spouses have the option to file a civil wrongful levy suit if the account cannot be resolved administratively. See IRM 5.19.9.2.7.1.

SITLP payments cannot be refunded if the payment created an overpayment and was subsequently refunded to the taxpayer. Research must be performed to ensure that the money remains available for refund. This research may involve tracking the levy proceeds from module to module.

There may be other instances where the return of SITLP levy proceeds is warranted. The return (refund) of levy proceeds requires special handling. See IRM 5.19.4.4.11, Levy Release: Returning Levied Property.

IRC 6331(h), as prescribed by the Taxpayer Relief Act of 1997 (Public Law 105-34) Section 1024, authorizes the Internal Revenue Service to issue continuous levies on certain federal payments.

The law allows up to fifteen percent (15%) of specified payments to be levied. Specified payments include any federal payment other than a payment for which eligibility is based on the income and/or assets of a payee.

The American Jobs Creation Act of 2004, Section 887, Modification of Continuing Levy on Payments to Federal Vendors, amended the FPLP statute ( IRC 6331(h)) to allow one hundred percent (100%) levy on certain federal contractor/vendor payments.

FMS is the disbursing agent for many of the federal payments that can be levied. The Defense Finance and Accounting Service (DFAS) and the United States Postal Service (USPS) are two other disbursement offices that also administer certain payments through FMS TOP.

FPLP is a paperless ALP the IRS has implemented with FMS that will systemically attach certain federal payments made or administered by FMS.

The first phase of the FPLP was implemented in July 2000. FPLP is being phased in over several years as different federal payments become eligible for levy through the program. See Exhibit 5.19.9-2. , Table of Federal Payments Subject to FPLP.

An interagency agreement between the IRS and FMS provides for the following Federal payments to be levied at 15% of the amount through FPLP:

The interagency agreement between the IRS and FMS allows for the following payments to be levied at 100% of the Federal payment:

Third party notification provisions under Section 3417 of the Restructuring and Reform Act of 1998 (RRA '98) do not apply to this type of levy process as contact is made between electronic databases.

If a taxpayer is receiving two or more types of federal payments that are available for levy through the FPLP, then each payment may be levied for the same percentage allowed by the code.

The FPLP levy will not attach if a federal payment is less than the amount in LEM 5.19.9.3.1 (11).

Prior to 2006, on delinquent IMF joint income tax and BMF sole proprietor tax liabilities, the FPLP only levied Federal payments that matched to the primary TIN. Starting January 2006, FPLP began matching and levying Federal payments identified for the secondary or cross-reference (X-REF) SSNs on those IMF and BMF accounts.

FPLP computer requirements are based on an algorithmic process where all modules are first selected under certain collection statuses, then if appropriate, may be excluded by certain freeze codes based on a module exclusion criterion, or possibly an entity exclusion criterion. This subsection and its Exhibits describe the process.

Modules must have a balance as stated in LEM 5.19.9.3.2 .

The following types of tax accounts and collection status can be systemically selected into the FPLP: