Awards & Recognition
After receiving an IRS Collections Notice, it is understandable to feel some level of anxiety. In some situations, people can address their concerns directly with the Collections office of the IRS. However, for the vast majority of circumstances, such action is rarely effective and may complicate the individual’s tax situation. However, you do have a right to appeal the collection action with the Irvine IRS Appeals Office. In many cases, the likelihood for a favorable appeals determination can be increased by working with an experienced tax attorney and CPA, like the dedicated professionals of the Tax Law Offices of David W Klasing.
How can your request a hearing after receiving notice of an IRS collection action?
If you receive one of the following notices, then Collection Due Process (CDP) is available:
- IRC 6320 – Notice of Federal Tax Lien Filing and Your Right to a Hearing
- Notice of Levy on Your State Tax Refund – Notice of Your Right to a Hearing
- Final Notice – Notice of Intent to Levy and Notice of Your Right to a Hearing
- Post Levy Collection Due Process (CDP) Notice
- Notice of Jeopardy Levy and Right of Appeal
Collections due process is a procedure that delineates your rights. Under Collections due process you have 30 days to request a hearing so that your right to appear in court is preserved. You or your attorney will complete IRS Form 12153 – Request for a Collection Due Process or Equivalent Hearing. On this form, information about the dispute is provided to the IRS Office of Appeals requested information includes the taxpayer names, the basis for the hearing request, your proposed collection alternative, and other reasons for your disagreement with the IRS collection action.
What alternatives to the collection action can I propose?
While each and every Irvine IRS Appeals situation warrants it’s own uniquely crafted solution that can only be reached after a careful analysis of finances and circumstances, there are a number of fairly common alternatives and defenses to a collection action. These include:
- Lien subordination – For individuals with equity in property that they wish to use to pay their tax bill, a lien subordination may be a viable option. In a lien subordination with the IRS you generally agree to use to proceeds of a refinancing mortgage to pay your tax debt in exchange for the IRS agreeing to make the Federal Tax lien secondary to the mortgage.
- Lien discharge – This alternative can be requested if the person wishes to sell land or other real property that is encumbered by a Federal Tax lien. The IRS may agree to discharge the lien even though the proceeds from the sale are not sufficient to cover the tax liability.
- “I should not be liable for these penalties” – If you can demonstrate reasonable cause for your failure to pay or file on time, the Office of Appeals may reduce or eliminate your penalties.
- “My former spouse is responsible for these taxes” – You may raise the defense that it was your former (or current) spouse that should have sole liability for this tax debt. This response is usually accompanied with IRS Form 8857, Request for Innocent Spouse Relief, when you request your hearing.
- “I have already paid my taxes” – If you believe that you have all already paid all or part of the amount being collected, you should show proof of your satisfaction of the tax debt.
The foregoing are just a brief representation of some of the alternatives and defenses that may be available in a collections action. Prior to employing any defense, a meticulous analysis of your financial records, transactions and other circumstances should be performed.
What is the collection appeals program?
If one of the following actions has occurred, the Collection Appeals Program (CAP) is available:
- Prior to of following the IRS filing a Notice of Federal Tax Lien
- Prior to of following the IRS levying or seizing your property
- Repudiation of an installment agreement
- Modification, or a proposed modification, to an installment agreement
- Termination, or proposed termination, of an installment agreement
CAP can often result in an expedited decision and is available for an array of collection actions by the IRS. However, the CAP’s decision is binding and you will not be able to appeal it further to court if you disagree with it. While use of CAP can be appropriate in certain situations, it should be used judiciously and only after careful consideration of the tax situation and its circumstances.
If you have received a collections notice from the IRS, you still may appeal the decision within 30 days. To schedule a reduced-rate initial consultation with an experienced CPA and Irvine IRS Appeals attorney, call The Tax Law Offices of David W. Klasing at (949) 681-3502 or (800) 681-1295, or contact us online.
Irvine Tax Law Offices
For any of your tax planning compliance and controversy needs in Irvine, contact the Lawyers at The Tax Law Offices of David W. Klasing today. Our experienced Tax Lawyers offer a reduced-rate consultation on new cases or engagements. Call (949) 681-3502 or 800-681-1295 or contact us online today to schedule a reduce rate initial consultation at our Irvine tax law offices, or at one of our other convenient locations across Southern California.
