CCA 1313021: IRS discusses factors in seeking injunctions for unpaid employment taxes

Plain-English summary

An IRS attorney answered questions about when the IRS may seek injunctive relief under IRC § 7402(a) for unpaid employment taxes. The response says there is no fixed dollar threshold, no requirement that a taxpayer operate more than one entity, and no requirement that the taxpayer have opened and closed businesses. The decision is made case by case, although the amounts involved in referral letters to the Department of Justice have generally been substantial. The response also notes that the cited version of an IRS manual provision was outdated and that monthly filing and special deposit procedures had become obsolete.

Ruling snapshot

• Question: Are there fixed dollar, entity-count, or business-history requirements for seeking an employment-tax injunction?
• Outcome: Advice given on the general factors and current IRS procedures, without deciding a specific case.
• Key authorities: IRC § 7402(a); IRM 5.17.4.17.1

Full text (IRS public release)

ID: CCA-115635-12 Number: 201313021
Release Date: 3/29/2013
Office: ----------
UILC: 7402.00-00

From: -------------------
Sent: Thursday, August 30, 2012 10:44 AM
To: -----------------
Cc:
Subject: FW: Injunctive Relief Question -----------

Hi -------

Your email has been forwarded to me to answer--------- handles these issues (injunctions under 7402(a)
for unpaid employment taxes). There is certainly no dollar theshold that chief counsel applies in
reviewing these employment tax cases, and it is not necessary for the taxpayer to have operated more
than one entity. I am aware of no dollar theshold that RO's apply, or any requirement that the taxpayer
have opened and closed businesses, and if there were such requirements I believe I would have heard
about them. It's a case-by-case determination. The dollar amounts we've seen (in reviewing the referral
letters to DOJ) are always quite substantial, but there is no focus on the amount per quarter--it's the total
amount that everyone focuses on.

For the record, though, the version of IRM 5.17.4.17.1 that ---------- quotes is no longer current. As of
1/18/2012 it says

            5.17.4.17.1 Standards for Injunctive Relief under IRC §
            (08/01/2010) 7402(a)
            (01/18/2012)

               1. An interim guidance memo was issued December 9, 2011 stating that
                  effective January 1, 2012 monthly filing and special deposit
                  procedures will become obsolete. SeeSBSE-05–1211–090 .

I attach a copy of that memo.

--------------------------------------------------------------------------------------------------------------------------------------------

Let me know if this doesn't answer your question or you have more.

ATTACHMENT 1 [REDACTED]