Challenging the decisions of the IRS requires timely filing of appeals at each level. Failing to do so breaks the chain of appeals, forfeiting your right to challenge the IRS action through to Tax Court.
Filing appeals offers distinct advantages. Appeals officers have greater flexibility to settle cases compared to revenue officers. Additionally, enforced collection activities such as levies and wage garnishments are halted during the appeal process, providing an opportunity to resolve the case and address multiple issues simultaneously.
Before levies are imposed on a tax debt, you will receive two letters. The first is a demand for payment or a threat of asset seizure, known as CP504, which does not offer appeal rights. Within 30 days, you must contact the IRS to arrange full payment, an installment agreement, or explore other collection alternatives such as Offer in Compromise, Penalty Abatement, or Innocent Spouse relief.
The second letter, Letter 1058, Final Notice of Intent to Levy, informs you of the IRS’s intent to seize assets and outlines your appeal rights. It includes a Collection Due Process hearing request form (CDP) that must be completed and submitted to the IRS within 30 days.
By completing the CDP form, you notify the IRS of your appeal. Include your personal details, tax periods being appealed, and either handwritten or electronically typed information. Submit the form along with a copy of the final notice letter to ensure the appeals office receives the necessary documentation.
The information required to complete the CDP form is found in the letter you are appealing (Final Notice of Intent to Levy). Typically, the letter lists the tax periods subject to the final notice, levy, and subsequent appeal. Indicate whether the letter pertains to a levy or a lien, and ensure the listed periods match those in the final notice letter. Remember to sign the appeal and file it within the designated timeframe.
To prepare for the hearing, compile a list of the issues you wish to discuss with the appeals officer, including installment agreements, offers in compromise, penalty abatement, innocent spouse relief, and any other relevant matters. Gather all completed forms and supporting documents necessary for a thorough discussion of your case’s background facts. Begin assembling this information promptly to allow sufficient time before the scheduled hearing or settlement conference.
If you are dissatisfied with the hearing’s outcome, you can appeal to the Tax Court, followed by the US Court of Appeals and, ultimately, the US Supreme Court. Although this can be an expensive and time-consuming process, having these options provides negotiating power known as the threat of litigation. However, it’s important to note that during the appeals process, the statute of limitations is tolled, meaning it stops ticking or expiring.
A taxpayer faced a distressing situation when an IRS revenue officer threatened to place a lien on their house and levy all their bank accounts unless the tax debt was paid in full. Feeling unsure about their rights, the taxpayer sought McCauley Law office’s assistance to deal with the aggressive IRS agent. After thorough due diligence, we discovered that the revenue officer had issued a final notice of intent to levy, presenting an opportunity to file a collection due process hearing appeal. This decision allowed us to take the case out of the aggressive agent’s hands and pursue an alternative resolution through appeals. At McCauley Law office, we understand the significance of appeals in protecting taxpayers’ rights. If you are facing an aggressive IRS agent, consider filing an appeal to safeguard your interests and explore viable collection alternatives.