A Tax Consultant for All Seasons

If you case is under $25,000 the process is fairly simple. You just send a letter requesting Appeals consideration and indicate what you do not agree with and the reasons for that disagreement.

If your case is over $25,000, the request is in regards to a Partnership, S Corporation, or Employee plan or exempt organization, you must prepare a formal written request. Your formal request must include the following:

• Name, address, SSN, and daytime phone number
• Statement that you want to appeal the IRS decision to the Appeals Office
• A copy of the letter you received showing the decision you don’t agree with.
• Tax periods or years involved
• List of all items you disagree with and why you don’t agree
• Indicate the facts supporting your position on those issues
• State the law or authority, if any on which you are relying
• Sign the request under penalties of perjury.

You can represent yourself during these hearings or you can be represented by a CPA, Attorney or Enrolled Agent. You will be required to complete a Form 2848 to authorize that person to represent you before the IRS. If you need IRS help, contact a tax consultant at Effectur. We have Enrolled Agents on staff that can represent you and an entire team who will provide peace of mind throughout this process.

This process is available :

• Before or after the IRS field a Notice of Federal Tax Lien
• Before or after the IRS levies or seizes your property
• At the termination of an Installment Agreement
• At the rejection of an Installment Agreement

One of the main differences in a CDP hearing versus a CAP hearing is that with the CAP hearing you do not have the right to appeal the decision to the US Tax Court.

If your case has been transferred to a Revenue Officer and you disagree with the decision made, you must first appeal the decision with that person’s manager. If you still disagree, you may submit a written request for Appeals consideration. If you are appealing a seizure of property, you only have 10 days from the date the Notice of Seizure is given to you or left on your property. Your request for appeal of the decision of a Collection Manager must be postmarked 2 days after the date of your conference with the Manager or the IRS will resume collection action.

If you have questions about this process visit www.irs.gov or contact your tax consultant.

If you receive a:

• Notice of Federal Tax Lien
• Final Notice of Intent to Levy
• Notice of Jeopardy Levy and Right to Appeal
• Notice of Levy on your State Tax Refund

You may appeal this IRS collection action. To request this appeal you need to complete a Form 12153. You must file this form within the time allotted on the notice you received. If you do not respond to it in the amount of time indicated on the notice, you waive your right to go to court. If you miss the deadline, you can request an equivalency hearing, but will not have the right to appeal that decision if you disagree with it.

You also must indicate the reason you disagree with this decision. Once you request this hearing, you will receive a phone call to set up either a telephone or in person conference. At the conclusion of the hearing, the Appeals Officer will issue a determination letter. If you still don’t agree with the decision, you may request judicial review before the US Tax Court within 30 days of the Appeals decision. For more information on this process, go to www.irs.gov or contact your tax consultant.

If you have received a decision from an IRS employee that you disagree with, you have a right to appeal that decision to their manager. If you do so and the manager cannot speak to you right away, he or she must call you back by the end of the business day. If you still do not agree with the manager’s decision, you have the right to file an appeal under the Collection Appeals Program.

You can appeal many decisions including, the filing of a lien, a levy that was placed on your wages or bank account, or the seizing of your property. You also will have an opportunity to request a Collection Due Process hearing after the initial filing of the Notice of Federal Tax Lien or initial levy action—unless the IRS feels the collection of the tax is in jeopardy or the levy is against your state refund.

Both the Collection Appeals Program and Collection Due Process hearing are lengthy procedures. The IRS allows you to have a Licensed Taxpayer Representative to represent. A CPA, Attorney or Enrolled Agent can assist you with either of these processes.

My next blog will go into more details about these processes.

Normally, both you and your spouse are responsible, jointly and individually for any liability you incur from a tax return filed Married Filing Jointly. In some instances one spouse may be relieved of that liability by filing an Innocent Spouse Claim on Form 8857. You must file this form within 2 years after the first date the IRS attempted to collect the tax. (after 7/22/98)

You must meet the following conditions to qualify for innocent spouse relief.

• You filed a joint return which has an understatement of tax due to erroneous items of your former spouse
• You can establish that at the time you signed the return you did not know, and had no reason to know, that there was an understatement of tax. Meaning it was something “a reasonable person in similar circumstances would not have known.”
• Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax.
• A request will not be granted if it can be proven that you or your spouse transferred property to one another as a part of a scheme to defraud the IRS.
• You must not have benefited in any way beyond normal support from this underreported tax.

They will look at a variety of items and if the situation meets their criteria relief from the taxes may be given. This process can be lengthy and confusing. If you need IRS help, a tax consultant would be able to help you through the process.

One of the most common questions clients ask about the IRS collection process is–How long does the IRS have to collect taxes? The answer to this is 10 years from the date of the assessment. The assessment date is the date on which the IRS determines you owe the taxes. After ten years, the statute runs out and the IRS can no longer collect the tax–UNLESS one of the following circumstances occurs–each of which extends the statute:

• While the IRS and the Office of Appeals consider a request for an installment agreement or an offer in compromise.
• from the date you request a CDP hearing until Appeals issues a CDP Notice of Determination, or if you request review in the Tax Court, until the decision becomes final.
• from the date you request Innocent Spouse relief until a final Notice of Determination is issued–or review of this request through the Tax Court through 60 days after the decision becomes final.(This includes any time if you take your case through the US Court of Appeals).
• for tax periods included in a bankruptcy while the automatic stay is in effect, plus another 6 months.
• during the time you are residing outside of the US for continuous period of six months or more.

It is important to realize that each of these circumstances extends your statute. The IRS can also, in some circumstances request that you allow the statute to be extended–sometimes it is in your best interest to allow this and sometimes it is not. If you have questions about your rights contact a tax payer representative.