How to handle a Revenue Officer’s Notice of Appointment Letter, 725-B

Surprise visits from IRS field collection agents, known as Revenue Officers, were once one of the most intimidating aspects of owing taxes.

However, in a recent policy change, the IRS decided they will no longer make unannounced visits to your home and office. Instead, the IRS has issued new guidelines, opting for a gentler, friendlier approach, sending appointment letters with meeting times announced and scheduled in advance.  

The IRS has acted quickly, and Revenue Officers are sending out their Notices of Appointment, Letter 725-B to meet with you and investigate collecting your tax debt.

It is important to understand how to properly respond to your Notice of Appointment, Letter 725-B, but also be aware that there is more to meeting with the Revenue Officer than meets the eye. The Notice of Appointment is a starting point for an IRS Revenue Officer. Our Revenue Officer wants to interview you about your finances, any unfiled returns, and determine how the IRS can make you pay them back. The last thing you want to do is go into an IRS meeting blind.   

Let’s learn about how to handle your Notice of Appointment (Letter 725-B), and the collection demands to expect at your meeting, including a Revenue Officer’s request for financial information; Revenue Officer deadlines; financial disclosures in IRS Form 433A; and responding to an IRS Final Notice of Intent to Levy.

What should I do after receiving a Notice of Appointment, Letter 725-B?

Understandably, it can be intimidating to open your mail to find an IRS Notice of Appointment, Letter 725-B, and learn that you have an IRS Revenue Officer assigned to collect your taxes, with a date and time scheduled to meet. 

The reality, however, is that a proposed appointment time to meet with a Revenue Officer gives us numerous negotiation benefits that were previously unavailable.

Previously, Revenue Officers would show up at your home or business, flash a badge, and request to come into your kitchen or conference room and interview you on the spot. In an interview, a Revenue Officer wants to gather information about your finances (where you work, bank, the value of your cars and house, retirement plan information, monthly living expenses, etc.); demand the immediate filing of missing returns; and ensure that you maintain IRS compliance (being current on your estimated taxes if you are self-employed). The end goal is negotiating payment and filing resolution.

With the Notice of Appointment letter, we have knowledge that your case has been assigned to a Revenue Officer, and the opportunity to prepare in advance. There is no need to guess the answers to your finances; the answers can be reviewed and prepared in advance, with cautious and correct completion of IRS collection information statements (Forms 433A/433B).

With the new Notice of Appointment letter, you are out of immediate, direct contact with the IRS Revenue Officer and off the front line.

What is a Revenue Officer, and why was my case assigned?

Revenue Officers are the IRS’s primary field collection soldiers. The IRS collection division refers to the “field” as the area where you live and work.  Revenue Officers work the field – meaning they are assigned collection files identifying individual taxpayers in their assigned area. They are the primary “live and in-person” collection enforcement agents of the IRS.

Revenue Officers are usually assigned higher dollar amount cases, often combined with unfiled returns and “pyramiding” of tax debts (pyramiding refers to “running up” tax liabilities year after year without paying). Unpaid employment taxes from a business often rate high in the world of the IRS for assignment to a Revenue Officer. The IRS has a computer algorithm to identify cases ripe for the deeper investigation of a Revenue Officer. 

Also, the IRS has 10 years to collect the tax debt, and the IRS computer can identify cases with a short collection statute for assignment to a Revenue Officer.

Revenue Officers should be dealt with in a timely manner, and with an understanding of their power. A Revenue Officer can levy your wages and bank accounts, recommend that the IRS seize and sell your real estate, force you to relinquish retirement accounts, and close a business that pyramids tax liabilities.

It should not be taken lightly if you have received a Notice of Appointment letter from a Revenue Officer. Your tax situation is at the top of the IRS collection list.

What are all the IRS papers that came with my Notice of Appointment letter?

With your Notice of Appointment letter, the Revenue Officer likely stuffed a dizzying array of IRS collection forms and publications. The Notice of Appointment is just the beginning for the Revenue Officer’s work.  

Revenue Officer documents that accompany a Notice of Appointment letter and require our immediate attention may include the following:

  • Form 9297, Summary of Taxpayer Contact
  • Form 433-A, Financial Disclosure (or, if you own a business, Form 433-B).
  • Letter 1058, Final Notice of Intent to Levy with rights to Collection Due Process Appeal

Let’s take a look at each of the Revenue Officer’s Notice of Appointment demands, and how to respond and protect yourself:

Form 9297, Summary of Taxpayer Contact

The Notice of Appointment letter is used by Revenue Officers to announce their arrival.  Form 9297, Summary of Taxpayer Contact, contains the Revenue Officers request for information and deadlines.

The Revenue Officer wants to more than just to meet and talk to you.

Here are the documents and filings a Revenue Officer will typically request from us in Form 9297:

  • Completion of an IRS Collection Information Statement, using IRS Form 433A.
  • Filing of missing tax returns.
  • Last three months’ bank statements from all accounts.
  • Recent wage statements.
  • An itemization and verification of your monthly living expenses.
  • If you are self-employed, a recent profit and loss from your business.
  • Valuation and disclosure of your autos and personal residence.
  • Recent statements showing the amount you owe on auto and home loans.
  • Verification you are making estimated tax payments.

In most cases, a Revenue Officer will want the documents demanded in Form 9297 to be provided either at your interview or within 30 days. Remember, however, your meeting with a Revenue Officer can be handled by an attorney, CPA or enrolled agent in your place, allowing you to stay off the front line. Also, the deadlines stated in Form 9297, Summary of Taxpayer Contact, while serious, can often be negotiated.  

IRS Form 433-A, Collection Information Statement

IRS Form 433-A, Collection Information Statement, is used by Revenue Officers to make a “collection decision” as to repayment of your taxes. Form 433-A requires us to list your sources of income and itemize monthly living expenses. Your assets must also be disclosed, including houses, autos, retirement accounts, insurance policies, bank accounts, and cryptocurrency. 

Form 433-A should not be completed hastily, with guesses on your income, living expenses or asset values.  A Revenue Officer should not be left to interview you and notate your answers at an appointment, and then request that you sign the Form 433-A. It is important for us to devote time in advance, gathering information about your finances.

Using Form 433A as our negotiation tool, the IRS can approve an installment agreement, which puts the brakes on any action by the IRS to collect and closes the Revenue Officer’s file. The IRS has several different types of installment agreements available for Revenue Officer approval, including streamlined, partial pay, and full pay.

If we show the IRS you cannot make any payments, and doing so would cause financial hardship to you, the IRS can place our account in currently not collectible status (CNC). CNC status permits a Revenue Officer to close your file without requiring any payments. The IRS can keep a file in CNC status for years, provided there is no indication your ability to pay will increase.

Following IRS guidelines for proper completion of Form 433-A is essential as it will be used to determine and negotiate repayment terms.

Letter 1058, Final Notice of Intent to Levy, with Rights to Collection Due Process.

Revenue Officers are required to ensure that you have received notice before they can levy your wages, accounts, and property. A Revenue Officer will use IRS Letter 1058, Final Notice of Intent to Levy, with Rights to Collection Due Process. If not previously sent, Revenue Officer guidelines are to include it with your Notice of Appointment. Don’t overlook it, or let it get lost in all the IRS paper.

And don’t be fooled – a Final Notice of Intent to Levy should not be ignored.  We have rights that protect you from IRS levy during your meeting and financial disclosure process.

When an IRS Revenue Officer sends out a Final Notice of Intent to Levy, we respond by filing a Collection Due Process appealThe Collection Due Process appeal prevents Revenue Officers from levying while we negotiate resolution.  This appeal eliminates your risk of being hit with an IRS levy. The appeal also provides us with an independent hearing with an IRS Settlement Officer, if necessary.

An IRS Final Notice of Intent to Levy is considered the most important collection letter a Revenue Officer will send you. Proper response is essential to protecting you from a Revenue Officer levying your wages and bank accounts.

What happens if I skip the interview?

You may be tempted to skip the interview, or not provide the requested documents, or be talked into not filing an appeal in response to a Final Notice of Intent to Levy. As retribution for not cooperating, a Revenue Officer can levy your wages, bank accounts and can start seizure action on your property. If this enforcement action is not enough, or the IRS does not know where you work or bank, they may issue a legal summons requiring you to appear before the Revenue Officer. Avoiding a summons could result in contempt of court charges filed in District Court.

We want to maintain good communication with our Revenue Officer, timely respond to the Notice of Appointment letter, provide all financial information, meet all requested deadlines, and file any necessary appeals.

Revenue Officers are the most powerful IRS collection agents, and a Notice of Appointment Letter 725-B is serious. It is important to understand how Revenue Officers work, how they think, strategies to accommodate their demands for your financial information, and to protect your rights with the filing of appeals. Fortunately, IRS regulations permit you to avoid meeting with the Revenue Officer and having a professional respond on your behalf. And remember, when your head is the mouth of the bear, say nice bear.

By Howard Levy

Revenue Officers

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By Howard Levy

Revenue Officers

Contact Howard

Ready to take the next step? Contact me through the link below.

How Can I Help You?