Many people come to Lake Shore Legal with tax delinquencies and liabilities. One of the major driving points to have these individuals seek out assistance is the receipt of a letter from the IRS. In most cases this letter is either a Notice of Intent to Levy or a Notice of Federal Lien Filing. Taxpayers receive these letters when they have accrued tax liabilities and the IRS has been unsuccessful in either reaching the Taxpayer or receiving payment from the Taxpayer. I often use the analogy that these Notices are the IRS’s way of using a “carrot” to entice a taxpayer to make contact with the IRS before the IRS reverts to utilizing a “stick” (a levy). If you have recently received one of these letters, or any other correspondence from the IRS, you should contact Lake Shore Legal immediately. You have specific rights, mainly your right to a Collection Due Process Hearing (CDP), that will lapse if not timely raised and filed with the IRS.
The IRS is required to notify you the first time a Notice of Federal Tax Lien is filed for each tax and period. You must receive the notice within five business days after the lien filing. You have thirty days to file your CDP Hearing request from the date of the Notice of Federal Tax Lien. This Notice will specify the day in which you must respond to the IRS for a timely CDP request.
Similarly, for each tax and period, the IRS is required to notify you the first time the IRS collects or intends to collect a tax liability by taking (levying) your property or rights to property. Similar to the Notice of Lien, you will have thirty days from the Notice of Intent to Levy to file a timely CDP Hearing. Be aware that two major exceptions apply to the IRS Levy. The IRS can levy your state tax refund and can levy if the collection of the tax is in jeopardy prior to issuing you a Notice. In these instances, your CDP request is made following the IRS levy action.
A CDP Hearing request is properly accomplished by the timely and complete filing of IRS Form 12153, Request for a Collection Due Process or Equivalent Hearing, with the IRS. On the form you will state why you believe the IRS action is incorrect/improper and list an alternative to the IRS action. For example, you may request that you be placed into a payment agreement with the IRS rather than having the IRS levy your wages or bank accounts.
Once the IRS receives your CDP request, it will be forwarded to an IRS Appeals Unit. Appeals will then reach out to you or your representative to schedule a hearing date. Such hearings can be held over the phone, through mail correspondence, or sometimes face-to-face. In the event that you are requesting to enter into a payment agreement or are requesting to be placed in currently non-collectible status, you may be required to provide certain financial information to the Appeals Officer to verify your current financial status.
After the hearing the Appeals Officer will draft a letter of determination. The determination will state that the IRS action was either unjustified, was proper, or that an alternative was agreed to. If you do not agree with the Appeals Officer’s determination you have the right to appeal the determination to the United States Tax Court. Be aware that any issues that were not raised during the Appeals Hearing may be barred before the Tax Court. Additionally, the filing of a CDP request and a potential Tax Court appeal will stay the running of the IRS’s ten-year statute of limitations to collect the underlying tax liability.
LAKE SHORE LEGAL, LLC
Our attorneys have vast experience dealing with the IRS concerning tax lien and levy filings. Utilizing an experienced attorney can offer you the best opportunity to have a lien or levy either stopped prior to issuance or withdrawn. Lake Shore Legal has worked with IRS Appeals in numerous CDP hearings to place taxpayers into alternative payment arrangements, have levy filings released, and/or have a taxpayer placed in currently non-collectible status if the situation is proper. If you have accrued federal and/or state tax liabilities and/or have received correspondence from the IRS or Department of Revenue, contact Lake Shore Legal today and allow our attorneys to explain your options and assist you during this trying process. info@lakeshorelegalsolutions.com; (508) 943-7800