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Collection Appeal Rights
You can appeal IRS enforced collection action to the IRS Office of Appeals. The Office of Appeals is separate from and independent of the IRS Collection offices that initiate collection actions. The Internal Revenue Service ensures the independence of the Office of Appeals through a strict policy prohibiting ex parte communication – meaning communication between Appeals and Collections – about the accuracy of the facts or merits of each case. One of the most effective ways you can appeal an IRS collection action is via a Collection Due Process (CDP) hearing.
Collection Due Process Hearings (CDP)
If you want to protest an IRS collection notice, you can complete Form 12153, Request for a Collection Due Process or Equivalent Hearing, and submit it to the address listed on the IRS notice. A CDP hearing is a viable option if you’ve received one of the following notices:
- Notice of Federal Tax Lien Filing (Notice 3172)
- Final Notice: Notice of Intent to Levy (Notice 1058)
- Notice of Jeopardy Levy and Right of Appeal
- Notice of Levy on a State Tax Refund
- Post Levy Collection Due Process (CDP) Notice
If you receive one of the above notices, the most important thing for you to know is that you’re on the clock. You have thirty days from the date of a notice to request a Collection Due Process (CDP) hearing. Ignoring these notices is the worst thing a taxpayer can do. Once that thirty-day deadline passes, the IRS will begin the collection process, and it will be too late for you to request a timely appeal.
Replying in a timely manner still provides the option of resolving the issue directly with the Collections office that sent you the notice, but gives you a valuable second avenue should these negotiations break down. If the issue cannot be resolved, the case is then forwarded to Appeals for you to schedule a conference with an appeals officer. The conference may be by telephone, correspondence, or face-to-face for taxpayers who qualify. Most importantly, filing a timely Collection Due Process (CDP) hearing will formally stop all collection activity for those periods in appeals on your account until a final determination is made. Topics that may be discussed during a Collection Due Process hearing include:
- Whether or not the taxpayer paid all the tax owed;
- Whether the IRS assessed tax and sent the levy notice when the taxpayer was in bankruptcy;
- Whether or not the IRS made a procedural error in the assessment;
- Whether the time to collect the tax (Statute of Limitations) has expired;
- Whether the taxpayer wishes to discuss collection options;
- Whether the taxpayer wishes to make a spousal defense (Innocent Spouse Relief).
During a CDP hearing, you can request specific action regarding a lien against your property. For example, requesting a lien withdrawal on the premise that the Internal Revenue Service filed the Notice of Federal Tax Lien (Notice 3172) prematurely or did not follow established procedures is appropriate during the hearing.
After the CDP hearing, the appeals officer will issue a written determination letter. If the outcome is disagreeable, you can request judicial review by petitioning the U.S. Tax Court. However, your petition must be made within the time period specified in the Notice of Determination.