You may have heard stories of the IRS and the agency’s seizing of personal assets to satisfy unpaid tax debts. This is referred to as an IRS levy, which is similar to an IRS lien. Fortunately, you will receive several letters from the IRS before the agency attempts to seize your property.
However, if you do receive either Letter 1058 or an LT11, Final Notice of Intent to Levy, the time to take a wait-and-see approach has passed. You need to request a Collection Due Process Appeal with the IRS as soon as you can.
A Collection Due Process (CDP) Appeal is a taxpayer’s opportunity to dispute the amount the IRS alleges they owe in front of a representative from the IRS Independent Office of Appeals. This independent office is often a far better venue to settle tax disputes than in meetings with collection officers. Collection officers do not have the authority to make concessions in order to settle cases; whereas an Appeals Officer, whose job is to settle cases, may have more discretion to reach a mutually agreeable resolution in a CDP hearing. Don’t delay, though–taxpayers have a limited amount of time to request a CDP hearing (only 30 days).
Once you request a CDP hearing, the IRS must cease collection efforts; this means the agency is not allowed to seize your property until the disposition of your case. The entire process can take up to a year.
Reason for Requesting a CDP Hearing
On Form 12153, which taxpayers must file to formally request a CDP hearing, you must also select a reason for the request. Your request may not be accepted if it does not conform with the following reasons:
- You truly do not feel you owe the money the IRS alleges you owe;
- You wish to apply for innocent spouse relief;
- You previously filed for bankruptcy that discharged your tax obligations;
- You have made payments towards your tax debts the IRS did not recognize;
- You are unable to pay your tax debt due to a legitimate economic hardship (additionally, an IRS levy should not create an economic hardship); or
- You want to apply for an offer in compromise or installment agreement.
Another important thing to know about the CDP hearing and appeal is that the 10-year statute of limitations for collecting on unpaid tax debt will be paused. As soon as a determination is made on your CDP after the hearing, the statute of limitations will resume. Additionally, the IRS may still send a notice of federal tax lien after you request a CDP hearing.
Let an Experienced Attorney Handle the Hearing
A knowledgeable Seattle tax attorney is essential to have by your side at the CDP appeals hearing. An experienced attorney knows the options available to you and can help you navigate the process. Attorney Robert V. Boeshaar has years of experience dealing with the IRS and, as a former IRS employee, he is uniquely equipped to reach a resolution on your federal tax dispute. Contact the team today to set up your consultation.
Robert V. Boeshaar Attorney at Law, LL.M.,PLLC
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