Important Steps for Successful Judgment Enforcement

Judgment enforcement is the most essential step in division's work which requires perseverance, imagination and skills in using post judgment discovery, judicial sale procedures, the Federal Debt Collection Procedures Act (FDCPA), and state judgment enforcement laws. The Tax Division Judgment Collection Manual sets Tax Division's collection policies which explain the laws authorizing judgment enforcement & furnishes advice for collecting tax judgments. The legal discussions and suggestions are merely to serve as judgment enforcement guide. This manual and forms included with it are not for creating or recognizing any legal enforceable right in any person.

Some of the important steps for successful Judgment Enforcement are timeliness, referral or retention, using paralegals and reporting activities. Judgment enforcement needs to be pursued promptly, uniformly and fairly. If there is any delay then it will greatly reduces the likelihood of judgment enforcement. After entry of judgment, the trial attorney should complete judgment enforcement efforts within nine months. Judgment enforcement of amounts should be monitored closely but if default occurs then the judgment enforcement action should be taken promptly.

Once the initial judgment enforcement efforts have been completed then the trial attorney and section chief should decide whether to retain the case or refer it to the United States Attorney. While making the decision an attorney should consider whether the United States Attorney or IRS has already attempted to effect judgment enforcement. If the IRS has referred a suit to reduce assessments to judgment & to foreclose the tax liens on identified property of the taxpayer, it is likely that the United States Attorney has already exhausted its judgment enforcement efforts. The determination of uncollectibility need to be made as of the time the judgment enforcement is obtained. In some cases, judgment enforcement was not available to the IRS or was not exhausted by the United States Attorney. In trust fund recovery penalty refund suits and other partial-payment refund cases involving divisible assessments in which we file counterclaims, the IRS is generally required to defer collection during the pendency of the litigation. The United States Attorney may not have worked these cases thoroughly from a judgment enforcement standpoint, and many of the cases may have substantial judgment enforcement potential. And, if initial investigation reveals judgment enforcement potential, a case should be retained by the Tax Division. Successful judgment enforcement need substantial amounts of the trial attorney's time, but they should seek the assistance of a paralegal for some of the more routine judgment enforcement tasks, such as initial demand letters and initial judgment enforcement interrogatories.

It is essential that attorneys and paralegals accurately and promptly report their judgment enforcement & activities on the Division's automated case management system. Additionally, paralegal and attorney time spent on judgment enforcement matters should be reported on TaxDoc time reports as “judgment enforcement Activities" for the designated case which will be helpful for division management to track both the status of outstanding judgments and the amount of attorney & time devoted to judgment enforcement by paralegal.