IRS Institutes Review in Cases of Property Seizure

After criticism of its collection practices, the IRS announced Tuesday new interim rules requiring senior-level review before agents seize taxpayers’ cars, homes or other property for nonpayment of taxes.

“This higher level of approval is a prudent step to ensure that collection enforcement tools such as seizures are only used in appropriate cases,” said IRS Commissioner Charles O. Rossotti. The move was Rossotti’s first public initiative since he took over the agency Nov. 13.

In 1996, the IRS made about 10,000 property seizures. Aspects of the agency’s collection practices were strongly challenged during a series of Senate Finance Committee hearings in September.

Witnesses accused the agency of pursuing illegal tax collection quotas, allegations that led the IRS to suspend a system in which collections by its 33 district offices were ranked on a numerical scale.

In the past, an IRS group manager could approve most property seizures, with an IRS district director approving seizure of a taxpayer’s home.

But since Nov. 24, the collection division chief in an IRS district must approve all proposed seizures. The district director must approve seizure of a home, its contents or “perishable goods,” the agency said in a statement.