If a Taxpayer has IRS Debt and it gets far enough through the collection process, eventually the IRS will send a Final Notice of Intent to Levy. This will be a different form depending on which section of the IRS is sending the notice, but typically, it is sent on a Letter 1058 or LT11, This a critical notice and when a Taxpayer comes into our Dallas tax office, one of the most important pieces of information is what notices has the IRS sent, and specifically, has the Taxpayer received the Final Notice of Intent to Levy.
Why is The Notice Important?
It’s important for two big reasons:
- If the Taxpayer does not respond within 30 days in a certain manner, the IRS can now levy the taxpayer’s bank account, garnish their paycheck, and seize personal assets.
- At the same time that the taxpayer receives this notice, they also receive their Notice of their rights to a Collection Due Process (CDP) Hearing. In order to invoke your CDP rights, you must request your hearing within the 30 day timeframe.
What Are CDP Rights Critical?
There are three main benefits to invoking your CDP rights timely:
- Collection Activity ceases for the years in question pending the CDP hearing (No Levy),
- The case is forwarded to an appeals officer for a hearing where you will have the opportunity to have your case heard, and
- The taxpayer has protected their right to take their case to the United States Tax Court.
Filing the appeal also gives the taxpayer time to work with the Appeals Officer to set up an Installment Payment Plan, request Penalty Abatement, or file an Offer In Compromise without the threat of levy. The hearing itself is usually informal, most often by phone, (you can request a face to face hearing thought it’s not guaranteed) The taxpayer and appeals officer will discuss the situation and the proposal. Afterwards, the Appeals Officer will issue a Notice of Determination. The Taxpayer will either agree or has the right to request their case be heard by the US Tax Court if they don’t agree.
How Do you Request a CDP Hearing?
To Request CDP Rights, the Taxpayer will file IRS Form 12153, Request For a Collection Due Process or Equivalent Hearing within the 30 day deadline. It is important to file Form 12153 properly or it will most likely be rejected.
What If you miss the deadline to Invoke Your CDP Rights?
If you miss the deadline for your CDP hearing, you still have up to one year to request an Equivalent hearing. An Equivalent hearing allows you to take your case to appeals, but does not require the IRS to cease collection activities and does not protect your right to take the case to US Tax Court.
Do You Need Professionial Help?
If you need help with an IRS Collection issue, we’d be happy to meet with you. Please give me a call at (972) 821-1991 or email me at bob@jablonskyandassociates.
