If you have received a Notice of Intent to Levy or a Notice of Federal Tax Lien letter and feel the IRS erred in calculating your tax debt, you may be able to dispute their findings at a Collection Due Process hearing.
Keep reading to learn more about Collection Due Process, whether you qualify for a hearing, and how to file your request.
What Is a Collection Due Process Request?
A Collection Due Process (CDP) request is an appeal for a hearing to discuss your tax debts and payment options. The two main reasons to file a CDP request are if the IRS is trying to:
- Place a legal claim against your property (known as a Federal Tax Lien) because you have not paid a tax debt.
- Seize the funds they believe you owe directly from your bank account with an Intent to Levy.
In most cases, once you have filed a CDP request, the IRS is required to cease all attempts to place a lien on your property or levy your accounts until after your hearing.
RELATED ARTICLE: Why Request a Collection Due Process Hearing?
What Happens at a Collection Due Process Hearing?
A CDP hearing provides taxpayers the opportunity to dispute the amount of taxes the IRS claims you owe. You can also discuss collection alternatives such as installment options to pay back your debts, an extension on when you are required to pay, or a currently not collectible status.
The hearing will be conducted by an IRS appeals specialist who will review your situation to determine whether you have a valid reason to be disputing the debt. You can represent yourself at the hearing, but a tax attorney will have a better understanding of your situation and knowledge of how to present relevant evidence and information for maximum effect.
If you disagree with the outcome and wish to petition, new evidence to support your case will likely not be accepted. Having a tax attorney guide you through your hearing is the best way to preserve future appeal and petition options.
How Do I Know If I Can Dispute My Debt at a Collection Due Process Hearing?
If you believe the IRS has made a mistake calculating your tax debts, you may be able to file a CDP request to clear the issue during a hearing. However, according to the IRS, you can only dispute tax debt at a CDP hearing if:
- You did not receive a notice of deficiency (a letter stating you owe addition taxes)
- You did not have a previous opportunity to dispute your tax liability
- You made a payment, but the IRS says you have not paid
- You have a valid spouse defense, such as innocent spouse relief
There are many rules regarding whether you can dispute tax debts, so you should speak with a tax attorney before you file a request. A tax attorney can advise you on whether you have a valid debt dispute and help you compile supporting documents for both your CDP request and hearing.
How to File a Collection Due Process Request
To request a CDP hearing, you will need to properly complete a form 12153 Request for a Collection Due Process or Equivalent Hearing. You have 30 days from the time the IRS sent the letter to file your CDP request. This form will ask you for:
- Your personal and contact information
- Tax details and the type of notice you received
- Your reason for requesting a CDP
You will need to send your request to the department and address listed on the Notice of Intent to Levy or the Notice of Federal Tax Lien letter the IRS sent you. If you do not correctly complete the form, the IRS will not accept your request and will continue to take collection actions against you. An experienced tax attorney can guide you through the form and ensure that everything is correct.
Contact SH Block Tax Services With Your Debt Dispute Questions
If you have a valid debt dispute and wish to file a CDP request, S.H. Block Tax Services is here to help. Our experienced tax attorneys have successfully represented hundreds of individuals in CDP hearings, and our skill and experience has led to an A+ rating with the Better Business Bureau.
Not sure if you have a valid dispute? Schedule a free consultation with one of our tax experts to discuss your tax debt situation and options. Contact us today by calling 410-793-1231 or complete the brief form on the right to get started.
U.S. Department of the Treasury. Internal Revenue Service. (2018, July). Publication 1660: Collection Appeal Rights. (Cat. No. 14376Z). Retrieved from https://www.irs.gov/pub/irs-pdf/p1660.pdf
The content provided here is for informational purposes only and should not be construed as legal advice on any subject. Please read our full disclaimer here.