Answer:
Answer by Ken Golliher: As for SSCRA, virtually anyone else on the planet might be better informed than I am. However, see the IRS Administrative Manual at 5.1.7.7. The IRS generally suspends collection activity for taxpayers in a combat zone and military personnel in a "qualified hazardous duty area." (If you're just stationed in the Aleutians, they will feast on your butt just like any other taxpayer.) The manual provides a lot more detail, but my suggestion is that you not become an expert in this area. The IRS already has a Taxpayer Advocate service and they do not need you to take over the role.
Unless someone follows me explaining how SSCRA trumps even the IRS, at most you might consider contacting a joint account holder and telling him or her to consider advising the IRS that the customer is in the military. If there is no joint account holder, you might consider making the call to the IRS, but limiting your conversation to the single fact you want to convey. In either case, if the IRS does not withdraw the levy you should comply with it. You are not the defense team, nor are you responsible for the actions of the IRS. Again, I am not answering the SSCRA question.
Answer:
Answer by Mary Beth Guard: The new Servicemembers Civil Relief Act devotes one entire Title (Title V) to Taxes and Public Lands. Section 510 is applicable to income taxes. It establishes a procedure under which upon notice to the IRS or a state tax authority, the collection of income tax on the income of a servicemember is deferred for a period of not more than 180 days after termination of, or release from, military service. Two things to note: this is applicable whether the tax falls due before or during military service, and there is a "needs" test -- the servicemember's ability to pay the income tax must be materially affected by military service.
Looks to me like whether a levy can be issued would depend upon whether the IRS has received notice and whether the needs test has been met. The IRS is restrained from trying to collect if that is the case. There is nothing in the statute, however, that indicates that a financial institution must inquire into whether the levy was issued contrary to Section 510 and the course of action Ken sketches out above would appear to be prudent.
First published on BankersOnline.com 05/3/04
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