5.11.7. Automated Levy Programs

(1) The interagency agreement between the IRS and BFS provides for certain federal payments disbursed or administered by BFS to be systemically and continuously levied. BFS is the levy source for all levies issued through the FPLP — not the federal payment agencies.

(2) The following federal payments are subject to the FPLP:

1. Civil Service or Federal employee retirement pension annuities administered through the Office of Personnel Management (OPM) Civil Service Retirement System (CSRS) and Federal Employee Retirement System (FERS). The FPLP will levy 15% of the payment.

   Note: The FPLP does not levy the annuity payments in the Federal retirement Thrift Savings Plan (TSP).

2. Treasury disbursed Federal civilian agency (non-Defense) contractor/vendor payments. The FPLP will levy 100% of the payment. Prior to April 8, 2012, these payments were levied for 15% of the payment.

3. Federal employee travel payments - advances and reimbursements. The FPLP will levy 15% of the payment.

4. Federal (civilian) employee salaries administered by the salary paying agencies (SPA): United States Department of Agriculture (USDA) National Finance Center (NFC), Department of the Interior (DoI) National Business Center (NBC), USPS, General Services Administration (GSA), and Defense Finance and Accounting Service (DFAS).

   Note: DFAS, as a SPA, pays out some federal civilian employee salaries, as well as the Defense civilian employee and the military uniformed active/reserve member salaries and military retiree payments. The FPLP does not include the military uniformed services members' salaries.

   Note: Exhibit 5.11.7-1., FPLP - Federal Employee Salary Paying Agencies - NFC, NBC, GSA, DFAS, for the listing of the federal agencies whose payrolls are administered by these salary paying agencies. Federal employee salaries will be levied for 15% of the gross wages or salary remaining after current taxes, health insurance premiums, retirement contributions, and, if applicable, court ordered child support payments are deducted. There should be no other deductions taken into consideration for the 15% calculation.

5. Social Security Administration (SSA) benefit payments under Title II of the Social Security Act, aka Federal Old Age, Survivors and Disability Insurance (OASDI) benefits. (The exceptions are disability insurance payments, dependent child benefits, claims for lump sum payments, and payments that have partial withholding to repay an SSA benefit overpayment.) The FPLP will levy 15% of the payment.

   Note: Supplemental Security Income (SSI) payments are not subject to the FPLP.

6. Department of Defense (DoD) contractor/vendor payments paid through the Defense Finance and Accounting Service's (DFAS) payment systems. The FPLP will levy 100% of the payment. Prior to April 8, 2012, some of the payments may have been levied for 15% of the payment.

7. Army Corp of Engineers (ACOE) and the United States Postal Service (USPS) contractor/vendor/supplier payments. The ACOE payments are levied at 100% of the payment. Prior to May 9, 2012, the ACOE payments were levied for 15% of the payment. The USPS vendor/supplier payments are continuously levied at 100%.

8. Centers for Medicare and Medicaid Services (CMS) - Medicare Parts A (hospital), B (doctor), C (managed care) and D (prescription) provider and supplier payments. Medicare Parts A and B payments disbursed through the CMS Healthcare Integrated Government Ledger Accounting System (HIGLAS) are in the FPLP. Medicare Parts C and D payments are disbursed by the Treasury Department and are in the FPLP. On June 19, 2015, the FPLP levy authority on Medicare provider/supplier payments increased to 30% of the payment, prior to that date the payments were levied at 15%. This increase was due to the Achieving A Better Life Experience (ABLE) Act of 2014, Provision 209. The Medicare Access and CHIP Reauthorization Act of 2015 increased the amount of the federal payment levy for Medicare Providers from 30% to 100%, this was implemented on October 23, 2015.

   Note: Medicaid provider/supplier payments are not subject to levy under IRC 6331(h) or FPLP. These payments are administered and paid out by state government agencies for CMS. The payments may still be subject to levy under IRC 6331(a).

9. Miscellaneous Payments - non-means tested, such as discretionary one-time payments and expenditures paid out by different Federal agencies' specialty programs. These are payments made for various federal program-related expenditures, including interagency transfers, non-means tested loans, grants, medical, emergency and other administrative obligations. Also, included are payments from the Commodity Credit Corporation, also known as farm subsidy payments. The FPLP will levy 15% of the payment.

10. Railroad Retirement Board (RRB) Benefit Payments - monthly annuity or pension payment under the Railroad Retirement Act (RRA), except the RRA Tier 2 benefit portion. The FPLP will levy 15% of payment.

11. Military Retirement Payments administered by the Defense Finance and Accounting Service (DFAS). FPLP will levy 15% of the payment. Taxpayers receiving disability payments and Medal of Honor recipients will not be subjected to the FPLP.

    Note: DFAS does not process the levy on those taxpayers, even though a TC971 AC062 may be present on the module.

(3) 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 also began matching and levying federal payments identified for valid secondary or cross-reference (XREF) SSNs on those IMF and BMF accounts.

(4) Exhibit 5.11.7-2, Table of Federal Payments Subject to the FPLP, that displays the payment types that are levied through the FPLP; the type of Master File accounts that match with a certain federal payment type; and the levy percentage, i.e. 15% or 100%.

(5) If a taxpayer is receiving two or more types of federal payments that are available for levy through the FPLP, then each of those payments will be levied. The FPLP cannot selectively levy a certain payment separately for a particular taxpayer. Likewise, if both spouses on joint income tax liabilities are receiving federal payments subject to the FPLP, then both will be levied. The FPLP cannot levy only a certain spouse separately for their joint delinquent tax module.

(1) The delegation authority to issue an IRC 6331(h) levy, levy release, and return of levied property remains the same as outlined in Delegation Order 5-3. See IRM 1.2.44.4, Levy on Property in the Hands of a Third Party.

(2) Certain Taxpayer Advocate Service (TAS) employees are delegated to release systemically generated levies such as the FPLP, but only under the procedures contained in IRM 5.11.7.2.6 (or successor provisions). See Delegation Order No. 13-2 (Rev 1.), IRM 1.2.50.3. TAS employees cannot, however, take action on a case that is open in another function. TAS employees may only generate levy releases on collection modules not assigned to Automated Collection System (ACS) Status 22 with an open control base only or collection field Status 26. See IRM 13.1.4.2.3.15, Levy Release Authority and Return of Levy Proceeds, or refer to TAS Delegation Order authorities and successor revisions.

(1) The FPLP systemic process is not subject to third party notification provisions under IRC 7602(c), Examination of books and records, Notice of contact of third parties, because contact is made between electronic database(s).

(2) Third-party contact provisions must be satisfied prior to any personal contact with BFS (or other federal agencies and third parties) about taxpayers subject to FPLP.

(1) For a BMF employment tax module (MFT 01, 10, 11, 14 and 16) to qualify for a DETL, there must have been a CDP hearing previously requested on another BMF employment tax module no more than two years prior to that DETL-qualified module's period end date.

(2) BMF employment tax modules that are selected into the FPLP, may also be subject to the DETL process. In order to select FPLP DETL periods, a new FPLP BMF entity indicator "AC 630 (YYYYMMDD) DATE" has been created. This new indicator is displayed in the BMF entity CC BMFOLE. A taxpayer's employment tax module may be selected for a FPLP DETL, if the entity indicator's action code (AC) 630 date is within the "two-year look back" period of that DETL-qualifying module's period end date.

(3) The FPLP BMF entity indicator "AC 630 (YYYYMMDD) DATE" is defined as the following:

1. The FPLP BMF entity indicator "AC 630 YYYYMMDD" will display a date which is the tax period end date of the latest BMF employment tax module containing a posted TC 971 AC 630 (levy or levy/lien combo for CDP appeal hearing request.)

2. "AC 630 YYYYMMDD"can only post one employment tax module's period end date at a time. For entities that have multiple employment tax modules with a TC 971 AC 630, the FPLP and BMF will post the period end date of the latest module with a TC 971 AC 630. The DETL would be issued on balance due modules where the indicator date is within two years of the modules' period end date - which will likely be later periods. The rationale is to issue the DETL on later pyramiding tax periods/quarters.

3. Even if the latest employment tax period with a TC 971 AC 630 is reversed by a Withdrawal - that period's end date will still be displayed.

4. "AC 630 YYYYMMDD" period end date can be overlaid when a later period employment tax module posts a TC 971 AC 630. This is regardless of the TC 971 AC 630 posting date. Again, as stated, the indicator will always post from the latest period employment tax module with a TC 971 AC 630. Therefore, be aware that a DETL-qualified module may have been selected based on an earlier posted "AC 630" period end date.

(4) All federal payments available in the FPLP, except SSA and RRB payments, may be subject to a FPLP DETL. (The CDP notice will be issued prior to issuing the FPLP levy on SSA payments.)

(5) IRM 5.11.7.3.3, FPLP Systemic Processes and Indicators and IRM 5.11.7.3.3.4, Levy Service Process, for the specific transaction codes on how to recognize when an employment tax module is selected into the FPLP DETL process.

(1) Tax modules or the taxpayer entities that qualify for the FPLP but have certain condition and freeze codes under the primary Taxpayer Identification Number (TIN) will be excluded from FPLP selection.

(2) Accounts that are generally excluded from the FPLP are those that, statutorily or operationally, should not be in levy status and are coded that way in the Master File or Taxpayer Information File. Those accounts include unable-to-pay; pending installment agreements (IA) posted prior to a FPLP levy; approved installment agreements; pending or approved Offers-in-Compromise (OIC); open Disaster Zone indicators; Combat Zone; open bankruptcies or litigation; certain pending claims and adjustments; innocent spouse modules; and certain imminent Collection Statute Expiration Date (CSED) modules. Exhibit 5.11.7-3 FPLP Exclusion Criteria, which displays the list and description of entity and module transaction and freeze codes that are excluded from FPLP.

(3) Social Security benefit payments will not be subject to the FPLP levy if either of the following exists:

• the taxpayer enters into a repayment agreement with the Social Security Administration (SSA) because of overpaid benefits.

• if SSA has an active IRS paper levy (Form 668-W) it is honoring. By interagency agreement, SSA may honor the paper levy instead of the FPLP levy if a taxpayer is erroneously levied with both the paper and FPLP attaching their benefits, known as a "double levy" situation. Instead of returning the paper levy, SSA will honor it in lieu of the FPLP. The FPLP will need to be removed from the account. IRM 5.11.7.3.5.1, FPLP or Paper Levy.

(1) Delinquent Individual Master File (IMF) taxpayers who qualify for the FPLP and are reported to receive SSA benefit, military retirement payments or Railroad Retirement Board (RRB) benefit payments, will be excluded from the program if their estimated total income falls below 250% of the Department of Health and Human Services (HHS) Poverty Level Guidelines (PLG). These taxpayers are processed through the FPLP Low Income Filter (LIF).

(2) Taxpayers who have any of the following conditions are not processed through the FPLP LIF analysis and are selected into the FPLP:

• there is a delinquent unfiled return coded as a Tax Delinquency Investigation (TDI) status 03 under the entity’s primary SSN;

  Note: If the taxpayer has filed an income tax return for one of the last three years and has no outstanding return delinquencies following the last return filed they will be processed through the LIF.

• the current entity name line does not match with the balance due module name line;

• the entity spouse SSN is invalid;

• certain asset documents under the entity's SSN(s) are reported in IRP:
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• the SSA or RRB income under the entity SSN(s) is not reported to the Information Returns Processing (IRP) Master File.

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(4) Taxpayer accounts that are processed through the FPLP LIF are identified with TC 971 AC 543 posted in their entity. The TC 971 AC 543 indicates that the FPLP LIF analysis processing has taken place to determine if the balance due modules should be selected or excluded from the FPLP.

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(6) If the TC 971 AC 543 total income amount is below 250% of the HHS PLG amount, then the taxpayer’s balance due modules will be excluded or removed from the FPLP. If the income amount is at or above 250% of the PLG amount, then the taxpayer’s balance due modules will be selected into the FPLP.

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(1) Certain modules that may be selected into the FPLP, as discussed above, are systemically blocked from the program with TC 971 AC 061 (with the Document Locator Number (DLN) displaying a series of 8s or 9s). Under certain conditions, these accounts may be manually or systemically unblocked. IRM 5.11.7.3.6.4 Removal (Reversal) of the FPLP Block with TC 972 AC 061.

1. All modules moving into Status 22 (ACS) are systemically blocked.

   Note: Modules that are placed in certain ACS inventories will be systemically unblocked. See IRM 5.19.9.4.2.4, Liability Collection Automated Levy Programs, FPLP, Modules Systemically Blocked From FPLP.

2. State and local government entities with employment code "G" and/or "T", and Indian Tribal Governments (ITG) and Alaska Native Villages with Master File indicator "I" are systemically blocked from the FPLP with TC 971 AC 061. If it is necessary to collect the accounts through the FPLP, then collection employees may manually unblock (TC 972 AC 061) these entities' balance due modules.

   Caution: Collection employees must contact the ITG specialist assigned to the Tribe prior to reversing the FPLP block on an ITG case. Refer to IRM 5.1.12.24, Indian Tribal Governments.

(1) All delinquent modules that meet the selection criteria will be transmitted to BFS to be matched with federal payments. IRM 5.11.7.3.2

(2) When the module is selected, a TC 971 AC 060 will post. An unreversed TC 971 AC 060 generates the following account indicators:

1. MF entity screens (IDRS cc IMFOL/BMFOL) will display the indicator FMS CD:1, and IDRS entity screens (cc ENMOD) will display FMS-CD>1, if at least one module is selected with an unreversed TC 971 AC 060. If there are no modules selected, then the indicator will display 0 or no digit.

2. Integrated Collection System (ICS) will display a red literal" FPLP"indicator on the case summary screens. The red "FPLP" is generated from the IDRS entity screen indicator FMS CD>1.

3. Each MF and IDRS tax module (cc IMFOLT/BMFOLT, TXMOD) and ICS module summary screen will display the following indicators:

FMS CD (VALUE) ON MODULE	DEFINITION
1	Not selected into the FPLP, but at one time was included. (Do not confuse this module value with the entity value of FMS CD:1 described in the previous paragraph.)
3	Currently selected into the FPLP and unreversed TC 971 AC 060 present on module.

4. Other values indicate the module is blocked from FPLP:

FMS CD (VALUE) ON MODULE	DEFINITION
4, 5, 7	MANUAL FPLP block (TC 971 AC 061) present on module
8, 9, B	SYSTEMIC FPLP block (TC 971 AC 061) (DLN has a series of 8s or 9s) present on module
C, D, F	Both MANUAL and SYSTEMIC FPLP block (2 or more unreversed TC 971 AC 061) present on module

(3) The FPLP cases that are sent to BFS become part of the BFS National Interactive Delinquent Debtor Database (NIDDD) of U.S. Federal debtors, which includes non-tax debtors. This BFS federal debtor database is shared with the GSA System for Award Management (SAM) database. SAM (https://www.sam.gov) is the Federal government's centralized registrar database of taxpayer entities who register to bid for a federal contract or grant. The SAM flags federal registrants who have federal debt in the BFS NIDDD, including FPLP tax debt. The SAM record will indicate 'yes' or 'no' for a federal debt. No other debt information is provided. If a registrant inquires about their debt flag, then BFS or GSA will refer them to the IRS to resolve their accounts. For IRS tax debts, a taxpayer's debt flag will be removed when they are removed from the FPLP.

(1) Once a tax module is selected for the FPLP, it is transmitted to BFS. If BFS identifies a Federal payment or source match, then a TC 971 AC 062 will post on the module.

(2) The matched TIN will be displayed under the TC 971 AC 062 XREF field for IMF accounts and BMF accounts.

(3) The DLN associated with TC 971 AC 062 will include information about:

• Federal payment agency source codes

• Type of federal payment matched

• If the module identified a match and/or an impending levy payment.
  Exhibit 5.11.7-5 TC 971 AC 062 Document Locator Number (DLN) Format of Federal Payment Type for the descriptive format of the TC 971 AC 062 DLN.
  Exhibit 5.11.7-6 Federal Payment Agency Identifier Code List, for the type of federal payment and federal payment agency source.

  Note: The federal payment agency source for federal salaries paid by NFC and NBC will only display the codes of NFC and NBC, rather than the actual federal employer (or "suboffice" code) of the federal employee taxpayer. Exhibit 5.11.7-1., FPLP - Federal Employee Salary Paying Agencies - NFC, NBC, GSA, DFAS, for the list of the federal agencies whose payroll is serviced by these salary paying agencies.

(4) If the TC 971 AC 062 DLN indicates match - the TC will post on all FPLP modules. The "match" TC 971 AC 062 will generate the FPLP notice process discussed below.

(5) If the TC 971 AC 062 DLN indicates levy - then the TC will only post on the module intended for the levy payment. IRM 5.11.7.3.3.5 Levy Payment Process.

(1) The FPLP notice process generates four notices by the IRS - a pre-levy Collection Due Process (CDP) notice, a FPLP final notice for Social Security beneficiaries, a FPLP (DETL) post-levy CDP notice, and a FPLP (FEDCON Levy) post-levy CDP notice. This subsection describes their systemic processes and IRM 5.11.7.2.4, FPLP Generated Notices and Appeal Rights, describes the notices in detail.

(2) If a TC 971 AC 062 DLN match is posted, then Master File will systemically verify if a Intent to seize your assets and notice of your right to a hearing (CDP notice) had been issued by identifying an unreversed TC 971 AC 069 on the module. If a CDP notice was not issued, then Master File will systemically generate a FPLP CDP final notice, either the Computer Paragraph notice (CP) 90 (IMF) or 297 (BMF), prior to the levy and post a TC 971 AC 069 on the module. On the IMF, the appropriate SSN(s) will be displayed on the TC 971 AC 069 XREF field.

(3) If the match identifies a Social Security benefit payment, and an unreversed TC 971 AC 069 had been posted for at least ten cycles (weeks), then prior to the levy, Master File will systemically generate an additional final notice to the Social Security beneficiaries, either CP 91 (IMF) or 298 (BMF), Intent to seize up to 15% of your Social Security benefits and post a TC 971 AC 169 on the module. The TC 971 AC 169 will display the TIN of the individual that matched with the Social Security payment.

(4) The FPLP may issue systemic CDP notices after a DETL or FEDCON levy - known as post-levy CDP notices:

• CP 297A, Notice of seizure and notice of your right to a hearing, is issued after a FPLP DETL.

• CP 90C (or 297C), Notice of seizure and notice of your right to a hearing, is issued after a FPLP FEDCON levy.

(5) Another taxpayer notice is issued by BFS when a Federal payment is levied. See IRM 5.11.7.2.3.5, Levy Payment Process, below.

(1) The FPLP will transmit (or "serve") a levy to BFS in the following situations.

(2) FPLP Levy (Pre-levy CDP notice issued) - TC 971 AC 662

For federal payments other than Social Security, a levy will be transmitted to BFS at least ten (10) weeks from when Collection Due Process (CDP) CP 90 or 297, Intent to seize your assets and notice of your right to a hearing, or after any other CDP notice, such as the ACS LT 11 or field collection L1058 was issued (indicated by the unreversed TC 971 AC 069 posting cycle) and a CDP hearing was not requested. A FPLP levy TC 971 AC 662 will post on the module with either of the literals "SAL, OTH, RRB" displayed in the Miscellaneous Field and TIN in the XREF TIN field. (See Exhibit 5.11.7-2 for the levy code literal meanings.)

For Social Security payments matched, a FPLP levy will be transmitted to BFS at least eight (8) weeks but no more than twenty-six (26) weeks from when the CP 91 or 298, Intent to seize up to 15% of your Social Security benefits, was issued (indicated by the unreversed TC 971 AC 169 posting cycle). A FPLP levy TC 971 AC 662 will post on the module with the literal "SSA" displayed in the Miscellaneous Field and TIN in the XREF TIN field.

(3) FPLP Disqualified Employment Tax Levy (DETL) (Post-levy CDP issued) - TC 971 AC 762

For federal payments other than Social Security or RRB benefit payments, a FPLP DETL levy may also be transmitted to BFS on qualified BMF employment tax modules with MFT 01, 10, 11, 14 and 16. A TC 971 AC 762 will post on the module, which will generate a post-levy CDP notice CP 297A and post a TC 971 AC 069. The taxpayer is provided their CDP appeal rights after the levy. IRM 5.11.7.3.3.3, FPLP Notice Process (TC 971 AC 069 or AC 169).

(4) FPLP Federal Contractor Levy (FEDCON) (Post-levy CDP issued) - TC 971 AC 677

For federal payments other than Social Security or RRB benefit payments, a FPLP FEDCON levy may be issued to BFS on all BMF tax modules and IMF tax modules (excluding filing status 2, married filing joint modules) if the entity is identified as a Federal contractor with an unreversed TC 971 AC 647 posted on the entity. A TC 971 AC 677 will post on the module with the literals "SAL, OTH" displayed in the Miscellaneous Field. This will generate a post-levy CDP notice CP 90C (or 297C) and post a TC 971 AC 069. The taxpayer is provided their CDP appeal rights after the levy. IRM 5.11.7.3.3.3, FPLP Notice Process (TC 971 AC 069 or AC 169).

(5) Depending on a tax module’s levy qualifications, a single tax module could have any of the levy action codes at various times, particularly if the module goes in and out of the FPLP; or a taxpayer’s multiple modules may each have different levy codes occurring at the same time.

(6) The FPLP DETL (TC 971 AC 762) and FEDCON (TC 971 AC 677) levy processes occur after the issuance of a CP 504 on DETL modules. The issuance of the CP 504 meets the 30-day pre-levy requirement of IRC 6331(d). Also, if a tax module qualifies for both a DETL and FEDCON levy during the same cycle, then the DETL (TC 971 AC 762) will be selected first.

(7) For joint income tax and sole proprietor tax liabilities, the FPLP levy cannot be issued only on one TIN of these modules. All TINs in the tax modules or entity will be levied for their appropriate matched payments. The same process will occur when releasing a FPLP levy on these particular modules. IRM 5.11.7.3.6

(8) For taxpayers who have multiple tax periods in either the IMF and/or BMF, the levy should only subject their federal payment against one tax module at a time. That taxpayer's payment will not be levied more than the appropriate FPLP levy percentage to pay more than one tax module at a time, regardless if the taxpayer's TIN is the primary, secondary and/or XREF TIN on any tax module.

(9) If the FPLP levy is released, a TC 972 AC 060 will display to indicate the account is removed from the FPLP. A TC 972 AC 662/762/677 will not display.

(1) BFS has to process the various types of federal payment files within its processing cycles in order to meet the various payment or disbursement dates. The levy must be processed by the cutoff date for it to attach the payment by the payment date. The levy payment is then transmitted to the IRS and posted on the account on the taxpayer's payment date.

(2) BFS lets IRS know that the levy is being processed against a federal payment by a TC 971 AC 062, with its DLN indicating a levy payment processed (or "1" in the 13th DLN position) for that module. Exhibit 5.11.7-5. TC 971 AC 062 (DLN) and Miscellaneous Field Format, for additional specific payment agency information .

(3) The payment will post on the payment date with a TC 670 DPC 18 (payment from the primary TIN) and/or DPC 19 (payment from the secondary or XREF TIN) when BFS transmits the payment to the IRS through the Electronic Federal Tax Payment System (EFTPS).

(4) Most of the FPLP levy payments will be 15% of the federal payment (or balance due, whichever is less). The exception will be on federal contractor or vendor payments, i.e. account receivables, invoice payments, from taxpayers doing business with the government, which will be 100% of the payment. IRM 5.11.7.3.1.1 IRS/BFS Interagency Agreement - Federal Payments Subject to the FPLP.

(5) BFS will then send a notice to the taxpayer indicating the federal payment has been reduced because of the IRS FPLP levy. IRM 5.11.7.3.4.1 BFS Notice to Taxpayers. Exhibit 5.11.7-7 Department of the Treasury, Bureau of the Fiscal Service Notice.

(6) Inter-agency processing and timing constraints may delay some actions in this levy payment process:

1. The TC 971 AC 062 may post before or after the TC 670. This is due to timing issues, because the TC 971 AC 062 is posted on a weekly basis and the TC 670s are posted on a daily basis.

2. Although the TC 971 AC 062 DLN indicated that a levy payment was processed for the module, the federal payment may still not be received from BFS due to programming interface constraints between the time the levy was transmitted by the BFS to the payment agency to hold the payment and when the payment had been processed for disbursement. This may be the case on Defense contractor/vendor payments.

(7) BFS may systemically reverse a TC 670 DPC 18 or DPC 19 payment with TC 672 DPC 18 or DPC 19 when the federal payment agency determines the taxpayer was not entitled to the payment. IRM 5.11.7.3.7 Returning FPLP Levy Proceeds.

(1) Once BFS processes the IRS database against its payment disbursement files, then BFS will transmit the proceeds to IRS and send the remaining disbursement to the taxpayer along with a notice indicating the federal payment has been levied. Exhibit 5.11.7-7, Department of the Treasury, Bureau of the Fiscal Service Notice, displays the following information on the notice:

1. At the bottom of the notice: the type of Federal debt and the agency due the Federal debt; the type, date and amount of the Federal payment disbursement and the paying Federal agency; and then the amount levied.

2. In the middle of the notice: an 18 digit Account Number , which consists of the TIN type (0 for SSN; 2 for EIN), TIN (the primary TIN of the tax period), MFT, and the tax period where the levied payment posted. The BFS notice also displays a TIN Number. Due to BFS programming, the TIN Number is displayed only in SSN format (NNN-NN-NNNN), but the TIN Number can either be an SSN or EIN. (Verify the TIN by researching the TIN found under Account Number.)

   Note: The TIN Number is the matched TIN that is being levied for the payment. On joint income tax or sole proprietor liabilities, this may be either the primary or secondary (XREF) SSN.

3. The BFS notice informs taxpayers to contact the following ACS addresses and phone numbers to resolve their account. If a taxpayer calls the ACS phone number and the taxpayer case is assigned to a local field collection office, then ACS should refer the taxpayer to the appropriate office. Taxpayer correspondence received at these addresses should be handled according to IRM 5.19.9.4, Liability Collection, Automated Levy programs, FPLP or forwarded to the appropriate office for resolution.
   (SBSE, Tax Exempt and Government Entities (TEGE), Large Business and International (LB&I) taxpayers)
   Post Office Box 8208
   Bensalem PA 19020–8208
   800-829-3903 or 267–941–1004 (International)
   
   (W&I taxpayers)
   Post Office Box 219236 Stop 5050 P-4
   Kansas City MO 64121–9236
   800-829-7650

4. BFS mails the notice to the taxpayer either to the address provided by the IRS (if the Federal payment disbursed electronically) or to the address provided by the Federal payment agency source (if the Federal payment is disbursed through a paper check).

(1) Whenever the FPLP indicator is present on a module, revenue officers may decide to levy the federal payment source through the FPLP under IRC 6331(h) or through the traditional paper levy method using Form 668A or Form 668W under IRC 6331(a) or 6331(e). The FPLP will attach the applicable 15% or 100% of the payment continuously through BFS as the central or disbursing agent for the federal payment source. The paper levy method under IRC 6331(a), Levy and distraint, or IRC 6331(e) Continuing levy on salary and wages, using the Notice of Levy, Form 668-A or Form 668-W, respectively, will levy the federal payment source directly and attach the maximum amount allowed under those statutes. The maximum amount of levy proceeds received from either levy method will depend on the type of federal payment expected. Form 668-A or Form 668-W may not be used as a means to levy under the FPLP statute, IRC 6331(h).

(2) Form 668-A or Form 668-W will have to be served or issued on the federal agency directly, not BFS. Prior to levying the federal agency with Form 668-A or Form 668-W on either the primary or secondary taxpayer, the revenue officer must release or block the module from FPLP . IRM 5.11.7.3.6, Blocking or Releasing FPLP Levy.

(3) Form 668-A or Form 668-W may be used as a levy tool on a case, in addition to the FPLP, as long as the Form 668A/W is not served on a federal payment source. For example, a Form 668-A may be sent to a bank account, even if the taxpayer's federal payment is subject to the FPLP. If the Form 668-A or Form 668-W is served on a federal payment source, and the taxpayer is also in the FPLP, then there is a chance the FPLP may also levy the same federal payment source - which is prohibited based on the previous paragraph.

(4) Revenue officers cannot close a case module as a continuous FPLP levy using a Status 60 input. Status 60 is normally used for continuous levies or installment agreements. The FPLP excludes Status 60 modules. In order to close a case that has an active FPLP levy module, then consider the following:

1. If a case has an active FPLP levy, and there is no cooperation or contact from the taxpayer, then determine if a paper levy under IRC 6331(a) or (e) is necessary and convert the FPLP levy to the paper levy, as discussed above, in order to close out the case through the continuous paper levy process.

2. If a case has an active FPLP levy, with no further case action to be taken, and, if the taxpayer has agreed to the amount of the FPLP continuous levy, then determine if an approved installment agreement can be established on the case.

(5) Continuous levies under IRC 6331(e) on the federal payment agency may still be issued using Form 668-W, and placed in Status 60. See IRM 5.11.5, Notice of Levy, Levy on Wages, Salary and Other Income.

(1) For cases in Status 26, selected Collection Advisory office will have a designated FPLP coordinator who will have real-time secured web access to the BFS database system in order to temporarily release or "rescind" a levy during certain situations discussed below. On the IRS intranet Servicewide Electronic Research Program (SERP) page, under "Who/Where", the FPLP coordinators can be identified based on taxpayer’s geographical location.

(2) As discussed in the previous subsection, a FPLP levy is released by posting a FPLP exclusion TC (i.e. Status 60) or FPLP block (TC 971 AC 061) on the account. Those TCs will generate the TC 972 AC 060 indicating the FPLP levy is released. If the TC 972 AC 060 has not yet posted to release the levy and the taxpayer's next payment is imminent, then to avoid that payment from being levied, a levy release request to the FPLP coordinator may be necessary. (See IRM 5.11.7.2.6.2, FPLP Coordinator Duties.) The FPLP coordinator may be able to 'rescind' the levy through the BFS database system in time to save the next payment from being levied but only if there is still time to input the 'rescind' action prior to the payment processing cutoff chart discussed above. The "rescind" input must be completed before the payment cutoff date as discussed above in IRM 5.11.7.2.6 (7). Most of the time, the FPLP coordinator 'rescind' action can be done only on payments paid 'monthly', such as the OPM retirement payments or SSA benefit payments. Since federal salaries and contractor/vendor payments are paid more often and their processing cutoff dates shortened or unknown, then the systemic levy release will usually not be effective until after 2 cycled pay dates.

(3) The levy "rescind" on the BFS database is temporary only, and effective at the time of the input until the next time the BFS database is updated with taxpayer information from the Master File, which is usually every week. The FPLP coordinator's "rescind" input in the BFS database will not upload to IDRS or MF.

(4) To release a FPLP levy through the FPLP coordinator's rescind input in the above situations, prepare Form 4844 and send it to the FPLP coordinator. Call the FPLP coordinator to ensure receipt of Form 4844, and keep a copy of the form. Indicate on Form 4844:

1. Under "Remarks" — FPLP Levy Release

2. Taxpayer's TIN, name and address

3. Signature of delegated official authorized to release levies

(5) Certain case situations that may warrant a FPLP coordinator release are, but not limited to:

• open bankruptcy situations: Insolvency personnel should refer to IRM 5.9.4.5.4, Common Bankruptcy Issues, Federal Payment Levy Program. Under certain conditions, the FPLP coordinator may facilitate the release from the BFS database system. Insolvency units will also input the TC 520, which will systemically generate a TC 972 AC 060 and reverse the module out of the FPLP,

• wrongful or erroneous levies,

• economic hardship determinations as defined underTreas. Reg. 301.6343–1(b)(4),

• Another situation is based on a Treasury and Defense Department (DoD) agencies' interagency agreement regarding the 100% FPLP levy on Defense contractor payments. Those levies will be considered for emergency release based on national security concerns due to the contractor’s inability to perform their contract, OR that the levy will jeopardize contract performance and impose significant additional costs to the Federal government. If a taxpayer claims either of these situations, inform the taxpayer to contact their DoD contracting officer (CO).The DoD CO should have pre-established communication channels within the DoD and DFAS about these issues. If necessary, DoD may inform the IRS/FPLP headquarters, in writing, of the necessity of a particular contract to be performed and not levied due to national security interest or the significant additional financial cost to the Federal government, and formally request the levy release and/or return of levy proceeds of that particular contractor/taxpayer. When DoD informs FPLP headquarters, FPLP headquarters will then contact the FPLP coordinator, based on the taxpayer location. The coordinator will initiate expedited handling of the case and direct contact from IRS to that particular contractor/taxpayer. IRM 5.11.7.3.6.3 Disagreements over these decisions or the need for additional financial information from the taxpayer as part of negotiating for these decisions will be handled on a case by case situation. While the taxpayer pursues this action to get the levy released, Collection should continue with standard operating procedures for collection, which may include allowing the levy to continue.

(1) As indicated above, selected Collection Advisory offices have a designated FPLP coordinator who will have on-line and real-time access to the BFS database system in order to temporarily release or "rescind" a levy during certain situations.

(2) FPLP coordinators will have and should maintain their computer web access to the BFS website, known as the Treasury Offset Program (TOP) taxpayer database, in order to input (aka "rescind") emergency or stop-gap FPLP levy release requests. On the IRS intranet Servicewide Electronic Research Program (SERP) page, under "Who/Where", the appropriate FPLP coordinator can be identified for each case.

(3) The FPLP coordinators are not required to input the TC 971 AC 061 block/release or any other TC excluding the account from the FPLP. It is the responsibility of the operational/functional (i.e. Collection Field, TAS, TAC) employee resolving the case to input or forward it to the appropriate unit, i.e. Case Processing.

(4) Form 4844 will serve as the input document for the FPLP coordinator. The coordinator will sign onto the BFS system and rescind all the modules from the levy.

(5) Requests for FPLP levy rescinds must be input within one (1) workday from receipt.

(6) The original Form 4844 will be annotated with the date and time that the release was input into the BFS database and maintained in a file for 30 days.

(7) The FPLP coordinator is not responsible for authorizing the levy release.

(8) Coordinators should also provide subject matter support for the operating and functional divisions, and should also contact the FPLP headquarters staff for clarity and guidance.

(9) In rare instances and under the guidance of FPLP headquarters staff, the coordinators may be delegated to coordinate FPLP case-related recovery efforts of systemic erroneous levy situations or expedited case handling. IRM 5.11.7.3.6.3, Additional FPLP Coordinator Duties for Certain Expedited Case Handling.

(1) FPLP headquarters will initiate these necessary steps with the local FPLP coordinator, in order to facilitate expedited case handling of certain FPLP cases.

(2) The local FPLP coordinator will open a NFOI 148, Lien Priority Other, note the case history and initiate a mandatory outgoing Advisory Courtesy Investigation to the collection field function (or to the assigned revenue officer of the case), in order to make contact with the taxpayer. The group manager assigning the investigation should advise the revenue officer that because of the sensitive nature of the investigation, contact with the taxpayer will generally be made within three (3) work days from receipt.

(3) The following subsections outline the rare situations and procedures that require expedited case handling through the FPLP coordinator.

(1) Revenue officers may manually reverse any TC 971 AC 061 with a TC 972 AC 061, at anytime during their collection case strategy in order to place the module into the FPLP. (The DLN in the TC 972 AC 061 will display a random series of numbers.) The module should then be systemically selected into the FPLP, as along as the FPLP selection criteria is met. IRM 5.11.7.3.2 FPLP Selection Criteria. See IRM 5.11.1.3.1, Pre-Levy Considerations, if appropriate.

(2) There are also systemic criteria that determine when the FPLP TC 971 AC 061 block is reversed with TC 972 AC 061:

1. Expiration of manually input TC 971 AC 061 block: Any manual input of TC 971 AC 061 will systemically expire 52 cycles later. The DLN in TC 972 AC 061 will display a series of "8"s.

   Note: If the FPLP block is still needed, the collection employee will need to manually input the TC 971 AC 061 again before the TC 972 AC 061 posts.

2. Status update change: When a FPLP module that has either a systemic or manual TC 971 AC 061, moves into a non-FPLP status, i.e. Status 58 or Status 72, it is systemically reversed with TC 972 AC 061. The DLN in the TC 972 AC 061 will display a series of 9s.

   Note: If a FPLP module has a manual TC 971 AC 061 block and then updates to a non-FPLP status, then the expiration rule to systemically unblock will take precedence.
   

3. Certain Status 22 (ACS) inventories, including most FERDI cases. See IRM 5.19.9.4.2.4. The DLN in the TC 972 AC 061 will display a random series of numbers.