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WHAT IS AN IRS COLLECTION DUE PROCESS REQUEST?

The IRS has broad collection authority to collect delinquent taxes and to seize and sell property to collect delinquent taxes. Internal Revenue Code section 6201 grants to the IRS broad authority to assess taxes either by self-assessment by the taxpayer or as a result of an examination or audit conducted by the IRS. However, generally the IRS cannot pursue collection activities until the tax is assessed. An IRS collection due process request can be an effective tool in resolving an outstanding IRS tax liability.

There are two basic types of levies:

  1. Levies on bank accounts or other assets.
  2. Levies on wages.

When a levy is issued by the IRS, the IRS levy notice will contain a phone number on it for the agent that is assigned to resolve the IRS levy. You can call that number to discuss potentially releasing the levy and requesting an IRS installment agreement.

IRS Billing Notices Pertaining to Tax Liabilities

Once a tax is assessed by the IRS, the IRS will issue billing notices to the taxpayer. These notices will indicate the amount by year that is owed to the IRS. The liabilities will consist of tax, penalties and interest. The IRS keeps transcripts of the account for each taxpayer. The transcripts will show the activity that has taken place for that taxpayer each year. Among others, there are wage and income transcripts, which show the income for a taxpayer that has been reported to the IRS by third parties, and there are account transcripts, which show things like the tax liability, the date the tax return was filed, the date the tax was assessed, audits that have been conducted by the IRS, and so forth.

IRS Final Notice of Intent to Levy

A levy is defined as the power to collect taxes by distraint or seizure of the taxpayer’s assets. See the code section that deals with IRS levies and seizures: https://www.law.cornell.edu/uscode/text/26/6331.

After you receive billing notices, you will eventually receive a final notice of intent to levy. A notice of levy will include the following:

  1. The amount of unpaid tax.
  2. The right to request a hearing during the 30-day period before the day of levy.

The final notice of intent to levy is a very important document, as it provides you the right to file a collection due process. You have thirty days from the date on the notice to file the collection due process. The collection due process form can be found here: https://www.irs.gov/pub/irs-pdf/f12153.pdf.

An IRS collection due process request allows you to prevent the IRS from issue any levies and allows you to have a hearing before an IRS appeals officer. When you file a CDP request, you will check a box for what you would like to do at the CDP hearing and will briefly describe your request and the basis thereof. You can request a payment plan via the CDP hearing, and you can also file an offer in compromise.

The IRS appeals officer will make a determination regarding your request and if you disagree with the appeals officer, you could have tax court rights.

How can an IRS CDP Request Help Me?

If the IRS is threatening to levy your assets, you need expert help to guide you through the collections process and advise you of your rights. An IRS collection due process request can be a very effective tool in defending taxpayers from undesirable IRS collection actions. Contact Disparte Tax Law for a free consultation. There are steps you can take to protect your rights and formulate a strategy to meet your needs.

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