We often get calls and emails about the different notices taxpayers can get from the IRS. The notices can be confusing due to the different terms on the notices that the average tax payer may not understand. There are several different types of letters you can get from the IRS and each notice could be for something different and some may need immediate action while others don’t. You can learn more about the different notices here. The notice we are going to talk about today is the Collections Due Process Hearing notice.
When you owe a balance to the IRS, before they are able to issue collection action like levies, they must issue a certain number of notices. The final notice they send prior to issuing a levy comes with appeals rights. These notices are typically called a final notice or state you have a right to a hearing. This hearing is referred to as a Collections Due Process (CDP) or Equivalent Hearing. The notice will outline the administrative appeal rights of the taxpayers and how to request a CDP hearing. Other notices that come with appeals rights are notice of federal tax liens or attempt to seize your state tax refund.
So what is an CDP Hearing? To get the hearing you must file and appeal within 30 days of the date on the notice you received. This would alert the IRS that you are proposing another method of resolving the balance that is due and prompt a CDP Hearing to be scheduled. Once the IRS receives this appeal, it takes about 30 days to process. From there, it will be another 30 days for the hearing to be scheduled and an Appeals Officer to be assigned to review your case. The Appeals Officer will request any tax returns that may be missing, review your financials, and attempt to work through a resolution to avoid lien or levy action at this hearing. CDP hearings are conducted informally at the Appeals office. The Appeals officer will consider any relevant issue relating to the unpaid taxes raised by the taxpayer, any challenges by the taxpayer to the appropriateness of the collection action and any offers for collection alternatives made by the taxpayer. At the hearing, you as a taxpayer can challenge the existence of the liability. Before an Appeals Officer issues their determination, they must verify with the IRS that the requirements of any law or administrative procedure have been met.
Whether a resolution is agreed upon or not, the Appeals Officer will issue a Notice of Determination which outlines the results of the hearing. Specifically, it will discuss whether the IRS should proceed with collection action. Once this determination notice is issued, if no resolution was agreed upon, the IRS will move your case back into collections and will move to issue any and all types of levies or liens. Depending on the resolution that is agreed on, you may be safe from levies, or you may have a lien on your property until the requirements of your resolution are met.
If you received a notice that sounds similar to this, give us a call -our team of Tax Attorneys go to Collection Due Process hearings every month to help our clients get the best deal possible. Call us today at 844-841-9857 or click below to schedule your free consultation.