If you have an outstanding tax debt and you’re facing collection actions, you may want to consider a collection due process (CDP) appeal. A CDP appeal offers you an opportunity to pause IRS collections and speak directly with an IRS settlement officer. These officers have significant power and can approve a resolution that normal IRS employees would never be able to approve.
However, the CDP appeals process can be intimidating and confusing for many taxpayers. If you’re considering a CDP appeal or are currently facing liens and levies from the IRS, read this article to learn more about your rights and the appeals process.
A collection due process hearing offers you an opportunity to call “time out” and propose a deal to the IRS instead of facing enforced collection. Congress created the CDP process with the Internal Revenue Service Restructuring and Reform Act of 1998 (’98 Act).
Before the ’98 Act, there were almost no limits to the IRS’ powers to collect tax liabilities. The IRS could garnish paychecks, seize bank accounts, and file various other liens and levies with few restrictions.
Today, thanks to the ’98 Act, you have two available types of appeals, depending on whether you’re appealing a lien or a levy. (A lien is a legal claim against your property to satisfy a tax debt. A levy comes after a lien and takes away the property that was subject to the lien.)
In either case, if you miss the 30-day window, you’re not out of options. You can still request an equivalent hearing up to one year after the CDP notice. An equivalent hearing has three main differences from a regular CDP hearing:
Usually, the process for a CDP appeal (or an equivalent hearing) takes between 3 and 12 months to resolve. To request a CDP hearing, you’ll need to file a Form 12153, Request for a Collection Due Process or Equivalent Hearing, with the assigned revenue officer (or, if you don’t have an assigned revenue officer, the IRS Service Center that issued the final notice). After you request your CDP appeal, you’ll need to:
Eventually, you’ll meet and speak directly with an IRS appeals officer. As we mentioned earlier, these officers enjoy a high degree of flexibility and independence compared to most IRS agents. Appeals officers can approve resolutions that other agents could not.
RELATED: Have Tax Issues? Know Your Taxpayer Rights
If you have any questions or concerns about an outstanding tax debt or any other tax matters, please contact the experienced tax lawyers at S.H. Block Tax Services. Our skilled attorneys have experience working with the IRS to resolve tax issues and protect taxpayers’ rights.
Schedule your free consultation today by calling (410) 872-8376 or completing the brief contact form on this page.
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