When a tax debtor fails to meet his or her federal tax obligations, the Internal Revenue Service will typically institute collection proceedings intended to satisfy the tax debtor’s obligations by way of a levy, lien, seizure and/or garnishment. In doing so, the IRS’ first step is to actually locate the taxpayer in question as well as his or her assets. Only after those assets are located can the enforcement process continue, and as a result the IRS has developed procedures intended to locate those assets.
The Locator Services Program assists IRS employees in locating both taxpayers and their assets. Internal Revenue Service, Internal Revenue Manual 184.108.40.206 (03-27-2012), Locator Services Program, available at https://www.irs.gov/irm/part5/irm_05-001-018r.html. The tools used to locate those assets include the national asset locator tool, the credit bureau web browser, the tax research portal (typically LexisNexis), the Department of Motor Vehicles (DMV) data bases, real property title reports, Uniform Commercial Code (UCC) filings, and corporate information obtained from any Secretary of State. IRS employees often decide to use the Internet in the performance of their duties when it comes to locating taxpayers and assets, but the decision to do so must be based on the particular facts of the case in question. The IRS can also use the internet to understand various types of businesses, various types of property ownership, and confirm or validate the information provided to the IRS by taxpayers. Finally, in using the internet the IRS must consider a number of factors including the level of cooperation of the taxpayer, the type of liability and entity in question, the size of the liability, and the complexity of the case.
While the IRS certainly has a number of powerful tools at its disposal in order to locate taxpayers and their assets, there are as a result a number of attendant security considerations and privacy concerns implicated by these tools. The IRS maintains security guidelines that provide for the maintenance, protection and confidentiality of information identifiable using these tools. Among these security guidelines is the requirement that IRS personnel not use these tools for anything other than official IRS business. With respect to privacy, the Privacy and Information Protection (PIP) Office ensures that taxpayer and employee information remains confidential via its three offices: the Office of Privacy, Identity Protection, and Incident Management. These offices deal with issues and respond to incidents relating to the loss of personally identifiable information as well as identity theft.
For more information regarding the mechanisms by which the IRS locates taxpayers and their assets, consult an experienced tax professional.
Please keep in mind the information and advice presented in this blog is not intended to be used as formal legal advice. Contact a tax professional for personalized tax advice pertaining to your specific situation. While we try and answer all parts of the question when we write our blogs, sometimes there may be some left unanswered. If you have any questions about your problems with the IRS, SBOE, FTB, or BOE, or tax law in general, call RJS Law at (619) 595-1655.