View Article
Collection Due Process Hearings
Due process has also been frequently interpreted as placing limitations on laws and legal proceedings, in order for judges instead of legislators to define and guarantee fundamental fairness, justice, and liberty.
How a taxpayer becomes aware of their right to appeal
Generally, before a taxpayer is going to be levied, they will first receive a notice of intent to levy. When that notice comes, the taxpayer also receives a notice of their right to appeal. This tax levy notice is important because it is telling the taxpayer what his or her due process rights are. If this notice of right to appeal was not included in the notice of intent to levy, then the taxpayer may not know that they actually have a right to appeal. This could lead to a claim by the taxpayer that he or she has been denied his or her due process rights because he or she was never informed of his or her right to appeal.
Collection Appeal Rights Overview
Taxpayers may appeal many IRS collection actions. There are various appeal procedures available to them. The two main procedures are Collection Due Process (CDP) and Collection Appeals Program (CAP).
Authority for Collection Due Process Hearings
CDP Hearings are provided by statute. Internal Revenue Code (IRC) 6320 gives taxpayers the right to appeal the filing of a notice of Federal Tax Lien. IRC 6330 gives taxpayers the right to appeal before or after levy action is taken.
What Types of Things can a Taxpayer Request a Hearing for?
A taxpayer may request a CDP hearing for a number of things, including levies, liens, trust fund recovery penalties, audit reconsideration, rejected offers in compromise, and penalties.
Purpose of a Collection Due Process Hearing
The CDP hearing provisions give taxpayers an opportunity for an independent review to ensure that the levy or lien action by Collection is warranted and appropriate.
Collection Appeal Rights Process
A taxpayer must be kept informed of their rights to appeal collection actions. There are certain IRS forms and publications that explain appeal rights and provisions. These include:
• Publication 594, The IRS Collection Process — Addresses general appeal provisions
• Publication 1660, Collection Appeal Rights — Provides detailed information regarding Collection appeal rights and procedures under Collection Due Process (CDP) and the Collection Appeals Program (CAP)
• Form 12153, Request for Collection Due Process or Equivalent Hearing—Used to request a CDP or Equivalent Hearing.
Requirements for Filing a Collection Due Process Hearing
If a taxpayer wants to file a request for a CDP hearing, they must meet all of the following requirements:
• The request must be in writing; and
• The request must be filed on or before the date that is 30 days after the date of the Notice of Intent to Levy and Notice of Your Right to a Hearing or on or before 30 days after the five-business-day period following the filing of the Notice of Federal Tax Lien.
If the hearing request is filed late, the taxpayer may be entitled to an equivalent hearing but only if specifically requested.
Important Reminders
Two important aspects of when a taxpayer requests a CDP hearing are the timing and whether the request is processable.
Timing
There are two different rules for timeliness of a request for a hearing depending on whether the taxpayer is requesting a hearing for a levy or is requesting a hearing about a lien. In either case, when a hearing request is untimely, the request must be sent to appeals for a separate timeliness determination. Please note, however that if the taxpayer demonstrates that the late response was due to extenuating circumstances, such as being in the hospital or out of the country during that period, then the request will be treated as timely.
• Request for a hearing for a levy
In order for a CDP hearing to be timely, the taxpayer must submit a written request for a CDP hearing within the 30-day period starting the day after the date of the levy notice.
• Request for a hearing for a Federal tax lien
For a CDP lien hearing request to be timely, a taxpayer must submit a written request for a CDP hearing within the 30-day period that commences the day after the end of the five business day period following the filing of the Notice of Federal Tax Lien.
Processable
Another important aspect to consider when a taxpayer wants a CDP hearing is whether the appeal is processable. In essence, in order for any appeal to be processable, it must include all of the necessary information, such as the taxpayer’s signature or a reason for the appeal request. According to the IRS manual, a request for a CDP hearing is processable unless the request is:
A. not signed
B. signed, but the signer is not authorized to sign on behalf of the taxpayer (e.g. an unenrolled return preparer or spouse, etc.)
C. signed, but the signer does not have proper authorization (e.g. no Power of Attorney on file, etc.)
D. does not have a valid SSN, ITIN, or EIN or one could not be identified. See 1(b) above.
E. does not include a reason for the request.
Source: RoniDeutch.com
