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Asset Seizures
There is a powerful tool available to taxpayers that are facing seizure of their property by the Internal Revenue Service. In 1998, legislation was enacted that required the IRS to provide Due Process to taxpayers that were facing imminent collection action. The IRS is now required to give written notice of its intention to take enforcement action prior to doing so. A taxpayer must request a hearing within 30 days of this notice in order receive full Due Process consideration. If an appeal is filed, the collection officer is precluded by law from taking any collection action for the periods encompassed by the appeal.
First and foremost, the filing of a Collection Due Process Appeal preserves the status quo in that it prevents the IRS from seizing assets while the appeal is pending. Of equal importance is that the appeal provides the taxpayer's counsel with an opportunity to resolve the tax matters with a neutral Appeals Officer that has had no prior involvement with the case. The Appeals Division is authorized to accept Offers in Compromise, report accounts currently not collectible, and to enter into installment agreements with taxpayers. The Collection Due Process program also enables a taxpayer to argue, for example, that penalties and interest should be abated or that innocent spouse relief should be granted.
The filing of a Federal Tax Lien also triggers a right to Collection Due Process review, but not until after the lien has been filed. Even so, it presents the taxpayer with an opportunity to address all issues related to the tax lien. Moreover, it can be an alternative avenue for raising challenges to the propriety of the collection officer's actions in the case, even though they are not directly relevant to the lien.
If a reasonable settlement is not reached with the Appeals Officer, a taxpayer can petition Tax Court for a full review of the IRS' handling of the case. An effective Collection Due Process appeal requires a thorough knowledge of the procedural and substantive issues involved.
Contact Frank Tax Laws if . . .
- The IRS has sent you a Notice of Intent to Levy/Right to a Hearing
- The IRS has recently filed a tax lien against you and sent you a notice of your right to a hearing
