What Does It Mean? IRS Collection Due Process Rights 101
Updated: Jul 25
By: Brian Barto, EA
Owe back tax debt to the IRS? It is important to know your rights. Our firm works with clients in Winchester, VA in tax resolution cases. Each taxpayer must be advised on their Collection Due Process (CDP) rights before collection action can begin. When taxpayers invoke their CDP rights a number of good things happen:
• Collection activity ceases.
• The case is forwarded to an Appeals Officer to review.
• The taxpayers ensure they have the right to take their case to the Tax Court.
Yet, according to the National Taxpayer Advocate, less than 3% of taxpayers request a
CDP hearing, despite all of the benefits available. The failure to request a collection due process is in most cases a serious mistake made by taxpayers, or the tax professional representing them, who don’t understand the process.
Taxpayers are provided the opportunity to invoke their CDP appeal rights whenever
either a Notice of Federal Tax Lien (NFTL) is filed or when the IRS issues a final notice
of threat to levy assets of the taxpayer (Letter 11). Upon receipt of either the NFTL or threat to levy, the taxpayer has 30 days to request the CDP hearing with an Appeals Officer, also referred to as a Settlement Officer. The request is made by filing IRS Form 12153, Request for Collection Due Process Hearing or Equivalent Hearing.
Once the IRS receives the formal request for a CDP hearing, all collection activity stops
for the tax periods on the threat to levy. Collection may continue on older tax periods
on which the CDP rights have expired.
Generally, the Settlement Officer requests that the following documentation be submitted from the taxpayer in advance of the scheduled hearing:
• Any unfiled tax returns must be filed prior to the hearing.
• Proof of the taxpayer’s tax compliance regarding current tax payments.
• A Collection Information Statement (Form 433).
• A proposal from the taxpayer – what is it that the taxpayer wants?
The hearing with Appeals is generally done by phone. If you need help to enforce your rights, hire a good tax resolution professional to help you navigate the process.
At Tax Debt Resolution Services of Winchester VA, we help you eliminate your IRS issues and the stress the IRS has created in your life and help you get back to doing what you do best! We help our clients in Winchester, VA to resolve their tax debts! If you need assistance please feel free to contact me at 540-662-4432 or email@example.com.
24 Weems Lane
Winchester, VA 22601