One of the most valuable tools to protect yourself against IRS collection actions – particularly against liens and levies – is a collection due process hearing.
Except for in extremely rare circumstances, the IRS is not authorized to withdraw money from your bank account, seize your property, or take away your vehicle or home without following the law. Even the IRS is bound by the US Constitution, which states in its Fifth Amendment that the government cannot deprive a person of their life, liberty, or property without due process of the law. This is where a collection due process hearing comes in.
What is a Collection Due Process Hearing?
A Collection Due Process (CDP) hearing allows you to propose alternative ways to pay the owed amount, such as entering into an
installment agreement or seeing if you can enter into an
Offer in Compromise. The options you have available to you will depend on the type of notice you received or the circumstances surrounding the amount you owe (for example, if the IRS had not previously sent you a Notice of Deficiency). If you are unsure about which option you should request, it never hurts to reach out to a
tax professional for guidance on your best next steps.
When can I Request a Collection Due Process Hearing?
If you have received a
Final Notice of Intent to Levy or a
Notice of Federal Tax Lien, you should also have received a
Notice of Your Right to a Collection Due Process Hearing. The IRS must allow you to request a Collection Due Process Hearing before they can levy your bank account, wages, or any other property, except in rare circumstances.
How can I Request a Collection Due Process Hearing?
To request a Collection Due Process Hearing, fill out
Form 12153 and send it to the address on the notice you received. You only have 30 days from the date listed on the notice to send it to the IRS, so make sure to get it in the mail as soon as possible. We also recommend you send this documentation via certified mail to prove when it was sent and received.
If you miss the cutoff date, you're still eligible for an
equivalent hearing that can be filed within one year. However, this does not prevent the IRS from taking collection actions on the case.
Once your Collection Due Process Hearing Has Been Filed
After your request for an IRS Collection Due Process Hearing has been received and processed, an IRS Appeals Officer will be assigned to your case.
The Appeals Officer will:
- Carefully review your case,
- Consider any proposed collection alternatives you present, and
- Address any concerns.
If your IRS Appeals Officer agrees with your proposed collection alternative, they will work towards resolving your case.
If your IRS Appeals Officer disagrees with your proposed collection alternative, they will issue a
Notice of Determination.
If you disagree with this decision, the
Notice of Determination will give you a 30-day window to file a petition with the United States Tax Court.
Do you need help navigating the process of requesting a Collection Due Process Hearing? We are here to help!
Contact TaxAudit’s Tax Debt Relief team, and they can provide you with a no-obligation consultation with one of our world-class Tax Professionals! In this consultation, the Tax Professional can discuss your case and help you understand the best option available to you.