Filing a Collection Due Process appeal with the IRS

On Behalf of | Feb 2, 2024 | Back Taxes or Tax Debt

Taxes are an unavoidable obligation for most individuals. People generally pay taxes on their income and their personal holdings, including real estate. Some of those taxes are federal, and some of them are due to the state of Connecticut or local municipal authorities.

Certain factors influence how much someone pays in taxes. The total amount of someone’s income, the sources of their income and even the size of their family can influence their federal income tax obligations. In many situations, there are appellate processes that can help people fight inappropriate tax obligations or attempts to collect past-due amounts.

If the Internal Revenue Service (IRS) initiates enforcement actions related to an alleged underpayment of taxes, a taxpayer could pursue a Collection Due Process (CDP) appeal. What do people need to know about the CDP appeals process?

An appeal is available when a lien or levy is possible

Although the IRS has the authority to place liens against personal property and levy their financial resources, the agency does sometimes make mistakes. The IRS may take actions that are inappropriate given someone’s financial circumstances. Those who question decisions made by the IRS do have the right to due process review when facing major collection efforts.

The IRS has a legal obligation to notify individuals about pending collection actions. Someone who receives a Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320, Notice of Jeopardy Levy and Right of Appeal or other formal notice from the IRS could initiate an appeal. Such appeals can halt collection efforts and help people find a more reasonable solution for their tax debts.

A CDP appeal requires careful adherence to specific federal guidelines and IRS procedures. Those procedures include filing certain paperwork, attending a hearing in the United States Tax Court and presenting evidence about why the enforcement actions are inappropriate. Depending on whether the IRS intends to pursue a lien or levy, there is a slightly different procedure involved.

While it is possible for individuals to represent themselves during a Collection Due Process Appeal and at any necessary hearings, they are at risk of making mistakes. People may struggle to comply with court rules when representing themselves. Securing legal representation can make a major difference for those preparing for a CDP appeal.