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A Look at Collection Due Process

By May 13, 2016June 12th, 2022No Comments

If you receive Notice of a Federal Tax Lien under Internal Revenue Code Section 6320, or if you receive Notice of Intent to Levy under Internal Revenue Code Section 6330, you have a serious tax problem on your hands. A federal tax lien is a claim the government makes on your property after a failure to pay a tax debt that you owe. A Notice of Intent to Levy, on the other hand, warns you that the IRS is going to try to take (levy) your income or your assets to satisfy an unpaid tax debt.

When you receive either a Notice of a Federal Tax Lien or Notice of Intent to Levy, you have the right to due process. In other words, you have the right to challenge the IRS. You have the opportunity to request a hearing and have an independent review conducted to determine if the intent of the IRS to take your money is appropriate or if the IRS acted appropriately in placing a lien on your property. The hearing or independent review takes the form of a Collection Due Process (CDP) hearing or an Equivalent Hearing.

If you receive either a Notice of a Federal Tax Lien or Notice of Intent to Levy, get Boca Raton back taxes help right away to find out about your due process rights and your options for dealing with tax issues.

Collection Due Process Rights

If you receive a Notice of Intent to Levy or if you receive notice that the IRS has placed a lien on your property and you wish to have the IRS’ action independently reviewed, you must complete Form 12153, Request for a Collection Due Process or Equivalent Hearing. The form, once completed, should be sent to the same address which is shown on either your levy notice or lien notice.

You have 30 days to complete and submit this request form and request your CDP hearing while preserving your right to go to Tax Court.  If you fail to submit the request in a timely manner and it is not received within 30 days, you are still entitled to a hearing, but this would be an Equivalent Hearing instead of a Collection Due Process hearing. While you could appeal to the Tax Court if you aren’t happy with the outcome of your CDP hearing, this is generally not an option with an Equivalent Hearing.

Generally, you have a year to request an Equivalent Hearing, with the clock starting to run the day after the date of the CDP notice.  Unfortunately, if the decision made at the Equivalent Hearing is not in your favor, you can go to court and seek judicial review of the decision only if you’re arguing that you are entitled to innocent spousal relief.

When you request a CDP hearing, collection stops from the date of your request until either a final determination is made in the appeal or until you withdraw your request. Although requesting an Equivalent Hearing will normally cause collection action to stop, the IRS is not required to do so.

Additionally, when you ask for a CDP or Equivalent Hearing, you need to identify the reasons for your request. For example, you may indicate you want a collection alternative such as an installment agreement or offer in compromise or request penalty abatement. You also need to be prepared for your hearing by providing the settlement officer a collection information statement with documentation that supports your request.

Seeking help from East Coast Tax Consulting is a smart choice when you’re facing a levy or a tax lien so you can protect your due process rights. Our tax relief experts are ready to help you. Contact us today at 866-550-7655.

Contact Us 

You deserve the best in IRS tax representation, tax preparation, and tax planning services. At East Coast Tax Consulting Group, you’ll work with a licensed CPA who will handle your case from beginning to end. We invite you to contact our team to schedule a free, confidential consultation.

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