IRS Law Blog

A certified mail slip comes in the mail, with a notation a letter awaits from you from the IRS, likely from the IRS Automated Collection Service.

Or maybe an IRS Revenue Officer makes an unannounced visit to your home or work, and after introductions, hands a letter to you.

This, you tell yourself, is serious.

You get the letter and open it, and find that you have been served with an IRS Final Notice Notice of Intent to Levy, identified in the upper-right hand corner as LT11.

Intimidating as it all may seem, you have the right to put the brakes on the IRS’s desire to levy your accounts, and transfer the handling of your case from the IRS collection division to the IRS office of appeals. To accomplish this, within 30 days, you have the legal right to file a Collection Due Process appeal.

But how do you file that appeal to protect yourself and your assets and get the appeal filed?

The IRS has a simple two page form that it wants you to use for the appeal, known as Form 12153, Request for a Collection Due Process Hearing.

The Final Notice of Intent to Levy should have come with a package of inserts, one of which would be the Form 12153 for you to use in filing your IRS-stopping appeal.

Great, another IRS form to fill out that you do not understand, right? The good news is the Form 12153 is pretty straightforward to complete and get filed.

Here’s how to complete the Form 12153 and get your Collection Due Process appeal underway:

Starting at top of the the first page of the Form 12153, fill in your name, address and social security number.

Next, you will find that the IRS requests that you tell them what taxes you are appealing.  To do to this, reference the Final Notice of Intent to Levy – it will state the type of tax you owe (for example, income taxes), the IRS tax form that you filed creating the debt (i.e., Form 1040) and the years you owe (i.e., 2010, 2011, 2012).  Take that information from the final notice, and use it to tell the IRS what you owe and what you are appealing.

That’s it for the first page.

Now on to the second – and last – page.

The second page of the Form 12153 is primarily a “check-the-box” – it has boxes for you to check – the first being whether you are appealing the filing of a Federal tax lien or a Final Notice of Intent to Levy.  If you received a Final Notice of Intent to Levy, check the box “Proposed Levy or Actual Levy” as you dispute the IRS’s stated desire to levy you.  If the IRS also filed a tax lien, you can check that box, too.

The IRS also asks you on the second page to state if you are requesting an “Equivalent Hearing.”  Checking this box actually allows you to file your appeal late.  Yes, it can be okay if it is more than 30 days since you received your Final Notice of Intent to Levy and did not understand the importance of filing the appeal when you received the letter.

Even though tax laws state that a Collection Due Process Hearing must be requested within 30 days after the final notice is sent, IRS administrative rules allow you up to one year to file the appeal.  Filing late – up to one year after the notice was sent – is called an Equivalent Hearing. In most cases, the IRS will give you the “equivalent” of a timely filed appeal even if you file your request late.  That consists of a hearing, a hold on collection and levy, and a solution to your taxes that does not include levying your accounts and assets.  What you give up by filing late is the ability to have a U.S. Tax Court judge review the determination of the IRS appeals officer if you do not agree with the decision of the IRS appeals officer.

If you are filing your appeal late – defined as more than 30 days and less than a year after the final notice was issued – check the box “I would like an Equivalent Hearing.”

The Form 12153 permits you to tell the IRS that there are better options to levying your accounts.

–     Think you can afford monthly payments and want an installment agreement?

–     Do you want to submit an offer in compromise?

–     Can’t afford to repay the IRS and think your account should be put in uncollectible status so the IRS leaves you alone?

Tell the IRS what you want by checking the box for appeals consideration of the options that may apply to you:  “Installment Agreement,” “Offer in Compromise,” or I Can’t Pay the Balance.”  If you want another option that is not offered in the boxes provided (for example, penalty abatement), the Form 12153 next has a box for you to check as “Other.”  Check the “Other” box and state in the space provided any other collection option you desire, or any other information you want to add or tell the IRS.

Remember, you are requesting better options to levying your accounts, and while the IRS considers and negotiates those options with you, levying your accounts should be on hold.

All that should be left is for you to sign and date the Form 12153, and send it back to the IRS.

If you received the letter by certified mail from the IRS Automated Collection Service, mail it back to the Post Office Box shown in the upper right hand corner of the notice.  If it is from a Revenue Officer, send it back to her.

It does not happen often, but sometimes the IRS loses or misplaces the mail it receives.  You want to ensure the IRS gets your appeal, and that you can prove you mailed it.  Because of that, I suggest filing the appeal with proof of mailing and delivery.

Once the IRS Automated Collection Service or IRS Revenue Officer receives your appeal, it should be sent to the IRS Office of Appeals.  You will get a letter confirming that appeals has received and processed it, followed by a second letter setting a day and time for a hearing.

Before the hearing, the IRS will need a financial statement from you detailing your income, living expenses, assets and liabilities to negotiate your resolution.  The IRS requests the financial statement be completed on an IRS form – either Form 433A (for individuals) or Form 433B (for businesses).  You can also file your offer in compromise with the appeals officer, using IRS Form 656.

At the hearing, the IRS will then discuss with you the merits of your offer in compromise, or a payment agreement, or whether you debt can be treated as uncollectible.  One you reach agreement on collection alternatives to levy, your case will then be closed and the IRS appeals officer will notify the collections division to abide by its decision, and you have peace of mind that the IRS not only left you alone while you negotiated, but will not take your property going forward.