first giving the taxpayer pre-levy CDP
notice. The purpose behind the
amendment was to prevent employers
from "pyramiding" which is when an
employer continues to incur new pay-
roll tax debts fraudulently while they
await their hearing with an appeals
officer. Taxpayers who fall within this
exception may have their assets lev-
ied without the general wait period and
warning afforded to others.
The federal government levies payroll
taxes on wages and self-employment
income. Payroll taxes are a significant
part of the federal budget, comprising
33.9 percent (approximately $1.07 tril-
lion) of all federal revenues in 2014.
The two main federal payroll taxes
levied on wages are known as Fed-
eral Insurance Contribution Act (FICA)
taxes: the Social Security tax and the
Medicare tax. A third prominent pay-
roll tax is the Federal Unemployment
Tax Act (FUTA) tax. Employers are re-
sponsible for withholding the appro-
priate amount of tax dollars from their
employees' paychecks, paying the
employer's share of payroll taxes, de-
positing the amounts with the federal
government on either a semi-weekly or
and filing payroll tax
The aforementioned collec-
tions process will apply to the taxpayer
who fails to comply with the various
requirements of the IRS's employment
tax regime for the first time, but a tax-
payer repeatedly facing employment
tax liabilities would be well advised to
become familiar with the statutory ex-
ceptions to CDP requirements.
For purposes of the DETL exception,
IRC § 6330(h) defines it as a levy to
collect the employment tax liability
of a taxpayer (or predecessor) who
requested a CDP hearing for unpaid
employment taxes in the two-year
period prior to the beginning of the
taxable period for which the levy
Accordingly, the three
components of a DETL are: (1) a levy
served to collect employment taxes;
(2) a taxpayer (or its predecessor) who
has previously requested a CDP levy
hearing relating to employment taxes;
and (3) the prior CDP hearing included
unpaid employment taxes that arose
within the two-year period prior to the
beginning of the period for which the
levy is served.
Tax Policy Center, What are the Sources of
Revenue for the Federal Government, www.
Treas. Reg. § 31.6302 (2011).
Notice 931, Deposit Requirements for
IRC § 6330(h)(1).
IRM Background, Pre-Levy Actions, Restrictions
on Levy & Post-Levy Actions, § 126.96.36.199.
Of particular concern to
accountants and attorneys,
particularly those representing
business owners, is the
exception to the pre-levy
notice requirement for
tax levies (DETL).