he two main avenues of collection activities by the IRS is through 1) the NTFL (Notice of Federal Tax Lien), and 2) levies including bank levies and wage garnishments. Whenever the government files a Notice of Federal Tax Lien (NFTL) or issues a final notice of threat to levy, the taxpayer has 30 days to request a Collection Due Process (CDP) hearing with an appeals officer.
In order to do so, the Taxpayer will file IRS Form 12153, Request For a Collection Due Process or Equivalent Hearing. It is important to file Form 12153 properly or it will be rejected.
There are several benefits to invoking your CDP rights timely –
- Collection Activity ceases for the years in question pending the CDP hearing,
- The case is forwarded to an appeals officer for a hearing where you will have the opportunity to have your case heard, and
- The taxpayer has protected their right to take their case to the United States Tax Court.
If you miss the deadline for your CDP hearing, you still have up to one year to request an Equivalent hearing. An Equivalent hearing allows you to take your case to appeals, but does t require the IRS to cease collection activities and does not protect your right to take the case to US Tax Court.
What to Expect
Once the Form 12153 is received and processed by the IRS Appeals Division, an Appeals officer will send a letter to the taxpayer, notifying the taxpayer of when the hearing will occur, by what method (usually by phone), what the taxpayer should expect in the process, and what appeals is requesting from the taxpayer.
The request typically will include –
- Notification that all unfiled tax returns must be filed.
- Proof of proper tax payments or withholdings for the current year.
- Filing of Form 433 with the government (Collection Information Statement), and
- A proposal from the taxpayer stating what they want from the appeal process.
Filing the appeal also gives the taxpayer time to work with the Appeals Officer to set up an Installment Payment Plan or an Offer In Compromise without the threat of levy. The hearing itself is usually informal, most often by phone, (you can request a face to face hearing thought it’s not guaranteed) The taxpayer and appeals officer will discuss the situation and the proposal. Afterwards, the Appeals Officer will issue a Notice of Determination. The Taxpayer will either agree or has the right to request their case be heard by the US Tax Court if they don’t agree.
If you need help with an IRS Collection issue, we’d be happy to meet with you. Please give me a call at (972) 821-1991 or email me at bob@jablonskyandassociates.
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