A Collection Appeal Protest (CAP) provides taxpayers the opportunity to appeal many of the IRS’ proposed and/or actual collection actions. The taxpayer can request a CAP by filing a Form 9423 with IRS Collections. The collection actions that are subject to Appeal via a CAP are listed below. Note that a CAP can transfer a case out of collections to Appeals within weeks (instead of months) and it covers a wider range of collection actions.
- A Notice of Federal Tax Lien (NFTL) that has been or will be filed.
- A levy against your back accounts or other property that has been or will be taken.
- A levy on your wages (wage garnishment) that is currently in place or will be issued.
- A seizure of property will be taken or in the process, but before the property is sold.
- Requests to issue lien certificates, such as subordination, withdrawal, discharge or non-attachment has been denied.
- Proposed or actual rejection, modification or termination of an installment agreement.
- Wrongful levy
Before the taxpayer files the CAP, the taxpayer must follow certain procedures. If the case is with a Revenue Officer, the taxpayer must inform the Revenue Officer that he/she is in disagreement with the Revenue Officer and wants to appeal the Revenue Officer’s decision. The taxpayer should be prepared to explain why he/she disagrees and offer a solution. If the Revenue Officer is not persuaded by the taxpayer’s position, the taxpayer must be provided the opportunity to discuss the issue with the Revenue Officer’s Manager. Assuming that the Manager is in agreement with the Revenue Officer, the taxpayer has 48 hours from the conference with the Collections Manager to file the Form 9423 with the Revenue Officer.
If the case is with IRS Collections, the taxpayer must call the number on the IRS notice to explain why he/she is not in agreement with the IRS’ determination and request an appeal. Please not that if the taxpayer is appealing the rejection of a proposed installment agreement, or the termination of an installment agreement, a conference with the Collection manager before filing the appeal is not necessary. The taxpayer may file the Form 9423 within 30-days of the date of the notice on the rejection of the proposed installment agreement, and within 76 days from the date of the termination of an installment agreement to request the CAP. Note that the installment agreement will automatically default after 45 days of the termination notice.
Generally, a case will be heard within 30-days or less of filing the CAP. During this small window of time, the IRS Collection Division cannot take any proposed collection action against the taxpayer. Once the taxpayer has had the opportunity to discuss their case with IRS Appeals, and taxpayer does not agree with the outcome, the taxpayer does not have the opportunity to proceed to court, and the case goes back to the Collections Division. The IRS Appeals decision is final and binding between the IRS and the taxpayer.
