theyoungempire.com

Collection Due Process Hearings: Your Right to Challenge IRS Collection Actions

Facing IRS Collection Actions? Your Collection Due Process Hearing Could Be Your Financial Lifeline

When the IRS comes knocking with threats of levies, liens, or asset seizures, many taxpayers feel powerless and overwhelmed. However, what many don’t realize is that they have a powerful legal tool at their disposal: the Collection Due Process (CDP) hearing. This constitutional right, established by the IRS Restructuring and Reform Act of 1998, provides taxpayers with a crucial opportunity to challenge IRS collection actions and potentially avoid financial devastation.

What Is a Collection Due Process Hearing?

A CDP hearing is an opportunity to discuss alternatives to enforced collection and permits you to dispute the amount you owe if you have not had a prior opportunity to do so. The Collection Due Process hearing provisions give taxpayers an opportunity for an independent review to ensure that the levy action that has been proposed or the NFTL that has been filed is warranted and appropriate.

Essentially, a CDP hearing is your chance to pause IRS collection efforts and negotiate a fair resolution. Simply put, a Collection Due Process Hearing (“CDP Hearing”) is a hearing to determine whether an IRS Collections action is proper under the Internal Revenue Code. The hearing is conducted by the IRS Office of Appeals, which is an independent agency within the IRS that exists to resolve disputes between taxpayers and the government.

When Can You Request a CDP Hearing?

The timing for requesting a CDP hearing is critical. You have 30 days from receipt of an LT11 or L-1058 to request a Collection Due Process (CDP) hearing. You should request a CDP hearing using Form 12153, Request for a Collection Due Process or Equivalent Hearing PDF if you feel the levy is inappropriate.

CDP hearings are triggered by specific IRS notices, including:

The Power of Timely Filing

Filing your CDP request within the 30-day window provides significant protections. Your timely request for a CDP hearing will prohibit levy action in most cases. A timely request for a CDP hearing will also suspend the 10-year period IRS has, by law, to collect your taxes. This suspension continues until the determination Appeals makes about your disagreement is final.

If you miss the 30-day deadline, don’t despair. However, you still have up to a year to request an equivalent hearing. While an equivalent hearing doesn’t provide the same protections as a timely CDP hearing, it still offers valuable opportunities to negotiate with the IRS.

What Can You Accomplish in a CDP Hearing?

A CDP hearing opens several avenues for resolution:

Challenge the Underlying Liability: You can generally raise a disagreement about the amount you owe if you did not receive a deficiency notice for the liability or if you have not had another prior opportunity for Appeals or a court to consider your disagreement with the amount you owe.

Request Collection Alternatives: A Collection Due Process (CDP) hearing allows you to propose alternative ways to pay the owed amount, such as entering into an installment agreement or seeing if you can enter into an Offer in Compromise. These alternatives include:

Address Procedural Issues: Procedural Challenges: Verifying that the IRS followed proper notification procedures, such as sending notices to the taxpayer’s last known address via certified mail.

The CDP Process: What to Expect

To initiate a CDP hearing, fill out Form 12153 and send it to the address on the notice you received. You only have 30 days from the date listed on the notice to send it to the IRS, so make sure to get it in the mail as soon as possible.

After your request for an IRS Collection Due Process Hearing has been received and processed, an IRS Appeals Officer will be assigned to your case. This officer will review your case independently from the collection division that initiated the action.

If you’re not satisfied with the Appeals Officer’s determination, you can petition tax court within 30-days of the date of the Appeals determination letter for CDP hearings. This provides an additional layer of protection and review.

Why Professional Help Matters

While taxpayers can represent themselves in CDP hearings, the complexity of tax law and IRS procedures makes professional assistance invaluable. Experienced tax resolution professionals understand the nuances of CDP hearings and can help maximize your chances of a favorable outcome.

For those seeking expert guidance, long island tax resolution services like All County Tax Resolution provide the specialized knowledge needed to navigate these complex proceedings. Whether you’re an individual or a business with IRS and State tax problems; like a levy, lien or an audit, call for your free consultation. The firm emphasizes their commitment to be recognized for excellent customer satisfaction by providing prompt and professional assistance… Maintain the highest level of privacy and confidentiality throughout the resolution process… By achieving complete resolution in the shortest amount of time.

Don’t Wait: Act Now

The 30-day window for requesting a CDP hearing is non-negotiable, and if you miss the deadline, the IRS may move forward with the collection action. However, a collection due process and equivalent hearing are the same in that you can negotiate payment alternatives and assert the same arguments against the IRS’s proposed collection actions… if you request a CDP hearing, the IRS will temporarily stop any attempts to collect your tax debt with a levy.

Your CDP hearing rights represent more than just a procedural formality—they’re your constitutional protection against improper government collection actions. Even the IRS is bound by the US Constitution, which states in its Fifth Amendment that the government cannot deprive a person of their life, liberty, or property without due process of the law.

If you’ve received an IRS notice threatening collection action, don’t panic, but don’t delay either. Understanding and exercising your CDP rights could be the difference between financial ruin and a manageable resolution to your tax problems. The sooner you act, the more options you’ll have to protect your assets and negotiate a fair outcome with the IRS.