Collection Due Process Hearing
Taxpayers have the right to appeal certain actions from the Internal Revenue Service and request a hearing. For example, a taxpayer can appeal the IRS’ intent to levy bank accounts or garnish wages by filing a request for a Collection Due Process Hearing.
The request for the Collection Due Process Hearing must be forwarded (and sometimes received) by the IRS within 30 days from the date on the final notice of intent to levy. Filing for a Collection Due Process Hearing will act as a hold on enforcement action such as levies and garnishments for the periods in which the final notice of intent to levy was issued. However, the collection statute is tolled (does not run) during the time in which the hearing has been requested and until the hearing has been held.
An appeals officer who is an impartial third party will call a hearing date. Initially the appeals officer must review the procedure(s) taken by the IRS and determine if levy action was or is potentially appropriate given the circumstances. Further, the appeals officer is allowed to consider alternatives to levy action such as establishing a payment agreement to resolve the debt. The appeals officer will review all circumstances such as the amount of the debt, compliance, financial statements etc. and make a determination. If you disagree with the appeals officer’s determination you have 30 days to file an appeal.
If you do not file a request for a Collection Due Process Hearing within 30 days from the date of the final notice of intent to levy, you can file for an equivalent hearing. An equivalent hearing is very similar to a Collection Due Process Hearing. However, there is not an automatic hold on enforcement, but the collection statute is not tolled. Further, you do not have appeal rights based off of the appeal officer’s determination through an equivalent hearing.
If you have received a final notice of intent to levy, the IRS is actively collecting the tax debt and serious action needs to be taken. If no action is taken you risk bank levies and wage garnishments. If you have a substantial liability, you should seriously consider hiring a tax professional licensed to represent you before the IRS who is well versed with the appeals process, and your rights as a taxpayer.
Your representative (Power of Attorney) can represent you in the appeals hearing and propose a payment agreement based off of your current financial circumstances. Using the appeals process allowed by the IRS can be very beneficial to the taxpayer and should always be considered.
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