Sometimes, when negotiating with the IRS collection division, results can be based not only on the strength of your case, but also on who you talk to.
Are you dealing with an IRS Revenue Officer? They’re the highest-level enforcement agent, with the most power to levy your wages or accounts.
Or are you on hold with the IRS Automated Collection System (ACS), anxiously waiting to talk to an IRS collection agent halfway across the country?
The better approach to dealing with a Revenue Officer or ACS representative is taking negotiations straight to an IRS Settlement Officer. Here’s why:
Unlike an Revenue Officer or ACS collection agent, an IRS Settlement Officer has no ability to levy your wages or accounts. That’s right – you can negotiate with the IRS without the risk or threat of levy.
Another benefit of working with a Settlement Officer is that their decision on your case can be reviewed by an independent judge in the U.S. Tax Court. They are held to a higher standard of care in their decision-making than IRS Revenue Officers or ACS agents. That standard of care is known as abuse of discretion.
Abuse of discretion generally means that a Settlement Officer must be accurate on analyzing facts and following laws and IRS guidelines in determining your settlement options. Options that a Settlement Officer can consider include whether the IRS should accept an offer in compromise, abate penalties, grant an installment agreement, or approve financial hardship status.
If the Settlement Officer abuses her discretion, then the Tax Court can order the IRS to back-up, do it again, and get it right. The Tax Court – which reviews Settlement Officer’s decisions – is independent of the IRS. And when negotiating with the IRS, a standard of care that can be enforced by the weight of a court can make the difference in getting the right result.
In addition to Tax Court review, Settlement Officers work independently from the IRS collection division. That means they are prohibited from being influenced by the desires of a Revenue Officer or ACS agent. They should not communicate with collection agents about the merits of your case unless you agree to it.
In other words, routing your case to a Settlement Officer takes the decision-making away from the IRS collection division and into the hands of the independent IRS appeals division, where the Settlement Officer works.
Simply put, IRS Settlement Officers level the playing field.
But how do you get your case to a Settlement Officer?
Settlement Officers handle cases filed in response to an IRS Final Notice of Intent to Levy. These cases are known as collection due process appeals. During a due process hearing, a Settlement Officer is able to independently consider better options for you over property seizure – like an offer in compromise, installment agreement, or currently uncollectible status. Any mistakes made in the hearing by violating the abuse of discretion standard can be reviewed by the Tax Court. No such remedy exists when dealing with the IRS collection division.
Rights to filing a collection due process appeal to meet with an IRS Settlement Officer are good for up to one year after the Final Notice of Intent to Levy is sent. But only appeals filed within 30 days qualify for Tax Court review.
If you are unsure if you have collection due process rights to switch your case from the IRS collection division to a Settlement Officer, internal IRS account transcripts can be obtained with entries identifying if, and when, the Final Notice of Intent to Levy was sent.
When taking on the IRS, it is important to know your procedural rights – including to file a collection due process appeal to negotiate with an IRS Settlement Officer. There does not have to be anxiety and fear when tackling an IRS problem – avenues exist for evening the playing field, and protecting not only your property, but your rights to an independent IRS decision by a Settlement Officer with Tax Court review.