You need to be right, but you also need to be in the right place and working with the right IRS person.  This increases the likelihood of a fair and impartial review of your case.

Getting to the right place with the right person is accomplished by requesting an IRS collection due process appeal.

The benefits of collection due process appeals are significant and should be considered in every IRS collection case.  Here they are:

1)     An IRS collection due process appeal places the resolution of your case in the hands of an IRS appeals officer, not a collections representative.

2)     IRS appeals officers are trained to settle cases; IRS collection representatives are trained to enforce collection laws. Settle your case with a settlement officer.

3)     You could have a have a face to face, personal meeting with an IRS appeals officer in your city to resolve your case.  This is a much preferred alternative to negotiating with the impersonal and distant IRS Automated Collection System, where every time you call you will talk to somebody different and never have a meeting.

4)     Collection due process appeals protects your assets while you negotiate a solution.  In most cases, the filing of the appeal stops the IRS from collecting until it is resolved.  This evens the playing field and protects your assets while you negotiate.

5)     If you cannot reach a resolution with IRS appeals, you have the right to have a Tax Court judge decide your case after the appeal is closed.  This is not available if you negotiate with the IRS through normal collection channels (i.e., ACS, Revenue Officer).

If you are considering an offer in compromise, know that a collection due process appeal is the only way to have anyone outside the IRS review the offer if it is denied.

You are eligible for a collection due process appeals if you have received an IRS Final Notice of Intent to Levy.  Your appeal request should be filed within 30 days from when the IRS sends you the notice of intent to levy.  If more than 30 days has lapsed since the IRS sent you the notice of intent to levy, the IRS will still allow you additional time – up to one year – to file your appeal and be heard, but you will not be able to take your case to Tax Court if you disagree with appeals.

Take the IRS collection machinery down to a one on one, personalized level. Collection due process appeals do that, and in most cases allow you to negotiate without the risk of enforced collection.

The Final Notice of Intent to Levy gives you very important rights to stop the levy and resolve your case.

Here is what you need to know:

(1)     If the IRS has not sent the Final Notice of Intent to Levy to you, you are protected.  If you are unsure if you have received it, the IRS can be contacted to determine if it has been sent and what action needs to be taken.  Here is what the IRS final notice looks like.

(2)     If the IRS has sent you the final notice, they have to wait 30 days after the letter is sent to start collection.  During this 30 day window, you have the right to file a request for an administrative meeting with an IRS appeals officer.  The purpose of the meeting is to discuss alternatives with the IRS to property seizure.  This is known as a collection due process appeal.

(3)     The IRS is legally prohibited from taking your property until your appeal is completed. Typically, it takes the IRS about four to six months to have your case assigned to appeals officer and for your conference.

(4)     IRS appeals officers tend to be best equipped to resolve your case in a manner that is fair to you. You will have one person assigned to your case and can have a face-to-face meeting if you request.  This is impossible if you go through the IRS automated collection 1-800 systems for resolution.  Meeting with an IRS appeals officer usually gives you the best chance at reaching a fair resolution – that is their job.

(5)     Solutions you can request from appeals include an installment agreement, hardship “uncollectible status,” offer in compromise or innocent spouse claim.

(6)     If you cannot agree with IRS appeals over how to resolve your case, you have the right to have an independent Tax Court judge review your case. If you have a strong case and can show that the IRS is being unreasonable, the hold on collection will continue while your Tax Court case is pending and decided.

If it has been more than 30 days since the IRS sent you the Final Notice of Intent to Levy, you still have options. IRS administrative policy (see Internal Revenue Manual 5.1.9.3.2.3) is to process a late-filed collection due process appeal if it is filed within one year after the final notice is sent.  Filing your appeal late gives you the same administrative rights as filing timely – a hold on collection and meeting with an appeals officer.  You lose the right to go to Tax Court by filing late.

Exercising your rights to a collection due process hearing allows you to achieve a solution with an IRS appeals officer without the threat of collection.  This levels the playing field during negotiations – no IRS  levy or seizure – and puts you in the best place for resolution.

Tax returns – lost.  Collection appeals – misplaced.  Innocent spouse claims – never processed.

The reality is that the IRS does lose incoming mail.  It is the exception, not the rule, but it happens.

And when it happens, it can be difficult to convince the IRS they are at fault without compelling evidence of filing.

The very best, indisputable way to file with the IRS:

Hand-file it.  Take your return, or your appeal or request, and drive it over to an IRS walk-in center.  Bring a copy with you.  When you file the original, ask the IRS to date stamp the copy as received.

I almost always recommend this for a series of unfiled returns.  Avoid mailing all the returns in the same envelope.  Putting each one in a separate envelope can result in 4 out of 5 being processed. You need 5 out of 5.

Lately, I have been hand-filing collection due process appeals by hand as well.  I have been challenged on more than one occasion by an IRS  Revenue Officer or Appeals Officer as to the timeliness of an appeal. Undisputed proof – a copy with an IRS date stamp – puts an end to these issues.

If you file with a post office proof of mailing certificate, be prepared:  On occasion, the IRS may question what was in the envelope.  Sometimes, I have seen the IRS take the unreasonable position that your mailing reciept only proves you mailed something to the IRS, not what you mailed.

When it is your word against the IRS records, you lose.  If it is important, hand-file it.

Guidance for Tax Court procedures is also discussed, including District Counsel’s propensity for filing motions for summary judgment in CDP litigation, motions to permit levy and motions for 6673(a) penalties in CDP cases filed for delay purposes.

By definition, a Collection Due Process appeal is filed to dispute to an IRS Final Notice of Intent to Levy or the filing of a Federal tax lien.  Before the IRS can levy on bank accounts, or make seizures of real or personal property, it must first provide a taxpayer the Final Notice of Intent to Levy.  After the notice is sent, there is a 30 day window to file a request a meeting with an IRS appeals officer, which can be followed by Tax Court review of the intended IRS collection action.  In most cases, all IRS collection action stops while the appeal and Tax Court case is being resolved. This is known as collection due process.