A taxpayer who accrues a balance due with the IRS receives a lot of correspondence as the IRS tries to collect on that liability. Some of this correspondence appears threatening, but actually doesn’t have much “bite.” Other correspondence means there could be serious danger up ahead, and may require immediate action. It is, therefore, important
Collection Due Process/Equivalent Hearing AppealsCollection Due Process (“CDP”) Appeals—derived from the constitutional right to due process–are among the most powerful appeals available to taxpayers who are in collections with the IRS.Benefits of a timely and properly filed CDP:
- With few exceptions, the IRS may not levy a taxpayer on delinquent taxes that were included in the appeal while the appeal is pending and for 30 days subsequent to the issuance of an unfavorable determination letter. This can effectively prevent the IRS from levying for 5-8 months or longer.
- At the CDP hearing, a Settlement Officer has broad authority to approve a variety of different tax resolution programs.
- It “takes the case away” from the existing collection officer or ACS, which can be extremely helpful if that person is unreasonable or uncooperative.
- If the taxpayer doesn’t like the outcome of the appeal, they have the right to take the issue to United States Tax Court.
Collection Appeals ProgramThe Collection Appeals program or “CAP” can be used to appeal a wide variety of decisions made by IRS tax collectors including:
- Notice of Federal Tax Lien
- Notice of Levy
- Notice of Seizure
- Denial or Termination of Installment Agreement
Penalty Abatement, Offer in Compromise, and Trust Fund Recovery AppealsOur attorneys can often use these appeals to:
- Get penalties removed after the IRS denies a request for abatement of penalties;
- Secure approval of a rejected Offer in Compromise or secure a far lower settlement amount than the IRS was willing to approve;
- Exonerate individuals who were wrongfully proposed assertion of the Trust Fund Recovery Penalty.
There are two primary avenues of tax appeals within the IRS: Collection Appeals Program (CAP), and Request for a Collection Due Process Hearing (CDP). Taxpayers who have missed the deadline for filing a CDP may still qualify for an “Equivalent Hearing.” Our attorneys have extensive experience working within the IRS appeals system, and know whether, when, and how to appeal if the circumstances are such that an appeal may be of benefit to a client.
Depending upon the circumstances, an appeal may be an effective method of:
- Reversing an adverse action by the government such as a wage levy or a bank levy.
- Preventing the IRS from enforcing against a taxpayer.
- Resolving the tax liability with favorable terms.
- Obtaining more favorable terms than those that the IRS was initially willing to approve.
- Disputing the amount of tax owed.
- Challenging a variety of findings or actions of the IRS.
Attorneys vs Accountants
Which is Best for You?
Are you an owner or employee of a business that is delinquent with employment taxes? If so, watch out! It is possible that you will be held personally liable for what is called the Trust Fund Recovery Penalty. What is the Trust Fund Recovery Penalty? In short, the Trust Fund Recovery Penalty is a penalty
Will the IRS take your assets or force you to liquidate assets in order to satisfy your IRS back tax liability? The IRS can, with a few limited exemptions, seize your assets to satisfy your IRS back taxes. However, if you have competent legal representation, this should not happen to you unless every other collection