Posted on

What are the Various Collection Actions?

What are the Various Collection Actions?

There are several words and phrases particular to the collection process. Below, the IRS has defined some of the most common collection terms:

Federal Tax Lien: A legal claim against all your current and future property, such as a house or car, and rights to property, such as wages and bank accounts. The lien automatically comes into existence if you don’t pay your amount due after receiving your first bill.

Notice of Federal Tax Lien: A public notice to creditors. It notifies them that there is a federal tax lien that attaches to all your current and future property and rights to property.

Levy: A legal seizure of property or rights to property to satisfy a tax debt. When property is seized (“levied”), it will be sold to help pay your tax debt. If wages or bank accounts are seized, the money will be applied to your tax debt.

Seizure: There is no legal difference between a seizure and a levy. Many times, the IRS uses both terms interchangeably.

Notice of Intent to Levy and Notice of Your Right to a Hearing: Generally, before property is seized, the IRS has to send you this notice. If you don’t pay your overdue taxes, make other arrangements to satisfy the tax debt, or request a hearing within 30 days of the date of this notice, they may seize your property.

Summons: A summons legally compels you or a third party to meet with the IRS and provide information, documents or testimony.

Passport Actions: The Department of State will not issue or renew a passport to any individual who has been certified by the IRS as having a seriously delinquent tax debt and may revoke a passport previously issued to such individual.

Next week: Additional information on the IRS Federal Lien

(IRS Publication 594 and IRS.gov) (TTT 01/28/20)

Posted on

The IRS Collection Appeals Program (Part III)

The IRS Collection Appeals Program (Part III)

What to do if you disagree with the Appeal’s decision?

If you file a Collection Appeals Request and do not agree with Appeals decisions, you cannot proceed to court.

Instances in which you can pursue the Collection Appeals Program include, but aren’t limited to:

· Before or after the IRS files a Notice of Federal Tax Lien

· Before or after the IRS seizes (“levy”) your property

· After the IRS rejects, terminates, or proposes to terminate your Installment

Agreement (a conference with the manager is recommended, but not required). Submit your written Installment Agreement Appeal request, preferably using Form 9423, Collection Appeal Request, within the timeframe listed in your notice.

For more information about the Collection Due Process and Collection Appeals Program, please see Publication 1660, Collection Appeal Rights or visit www.irs.gov/Individuals/Appealing-a-Collection-Decision.

Next week: We will explain various collection actions

(IRS Publication 594 and IRS.gov) (TTT 01/21/20)

Posted on

The IRS Collection Appeals Program (Part II)

The IRS Collection Appeals Program (Part II)

What to do if you disagree with the manager’s decision?

If you then disagree with the manager’s decision, you may request the IRS Office of Appeals review your case under the Collection Appeals Program as outlined in Publication 1660. If your case is assigned to a Revenue Officer, your request for Appeals consideration should be made within three (3) business days of the conference with the manager or collection actions may resume. You must submit your request for Appeals consideration in writing, preferably on Form 9423, Collection Appeal Request. If your case is not assigned to a Revenue Officer, you can appeal the manager’s decision in writing or orally and your case will be forwarded to Appeals for review. Your request for Appeals consideration should be made within three (3) business days of the conference with the manager or collection actions may resume.

If you request a conference and are not contacted by a manager or his/her designee within two (2) business days of making the request, you may contact Collection again and request Appeals consideration. If you submit Form 9423, note the date of your request for a conference in Block 15 and indicate that you were not contacted by a manager. The Form 9423 should be received or postmarked within four (4) business days of your request for a conference as collection action may resume. Submit Form 9423 to the Revenue Officer involved in the lien, levy or seizure action.

Next week: What to do if you disagree with the Appeal’s decision?

(IRS Publication 594 and IRS.gov) (TTT 01/14/20)

Posted on

What is the Collection Appeals Program (Part I)

What is the Collection Appeals Program (Part I)

Collection Appeals Program is another program to challenge IRS collection.

Under the Collections Appeals Program, if you disagree with an IRS employee’s decision regarding any levy, seizure, or Notice of Federal Tax Lien filing and want to appeal it, you can ask to have a conference with the employee’s manager.

If we seize your house, car, or other property in order to sell your interest in the property to apply the proceeds to your tax debt, you must make the request within 10 business days after the Notice of Seizure is given to you or left at your home or business.

There is no deadline to request a manager conference when a levy is served for other types of property (such as wages or bank accounts) or a levy or seizure or Notice of Federal Tax Lien filing is proposed. The collection action may go forward if a conference is not requested within a reasonable time period.

Next week: What to do if you disagree with the manager’s decision?

(IRS Publication 594 and IRS.gov) (TTT 01/07/20

Posted on

Collection Action – How to Appeal an IRS Decision

Collection Action – How to Appeal an IRS Decision

 

Collection Due Process (Part III)

 

During a Collection Due Process hearing, the 10-year period for collecting taxes is suspended.  This means the IRS is generally prohibited from seizing (levying) your property, if seizing your property is the subject of the hearing.

 

The IRS is permitted to seize your property during an Equivalent Hearing or a Collection Due Process hearing about filing of a Notice of Federal Tax Lien, but normally they will not seize property during these hearings. The 10-year period for collecting taxes is not suspended during an Equivalent Hearing.

 

You are entitled to only one Collection Due Process lien hearing and one levy hearing for each tax period or assessment. You are entitled to propose collection alternatives, such as entering into an installment agreement or an offer-in-compromise, for consideration by Appeals in the hearing. It may be necessary for you to submit financial information or tax returns to qualify for such collection alternatives.

 

All issues should be raised and all necessary supporting information presented to Appeals at the hearing. You are prevented from raising issues during a judicial review that were not properly raised with Appeals in the Collection Due Process hearing. Your Appeals conference may be held by telephone, correspondence, or, if you qualify, in a face-to-face conference at the Appeals office closest to your home or place of business. You may be denied a face-to-face conference if you raise issues that are deemed frivolous or made with a desire solely to delay or impede collection. For a nonexclusive listing of issues identified by the IRS as frivolous, see “The Truth About Frivolous Tax Arguments” on IRS.gov. For more information about Collection Due Process see Publication 1660.

 

Next Year:  Collection Appeals Program

 

(IRS Publication 594 and IRS.gov) (TTT 12/17 – 31/19)

 

Posted on

Collection Action – How to Appeal an IRS Decision

Collection Action – How to Appeal an IRS Decision

 

Collection Due Process (Part II)

 

To request a Collection Due Process hearing, complete Form 12153, Request for a Collection Due Process or Equivalent Hearing or a written request containing the same information as contained in Form 12153, and send it to the address on your notice.

 

You must request a Collection Due Process hearing by the date indicated in the notice the  sent you (for proposed levies, that date is 30 days from the date of the letter). HINT:  Always check the due date.  Over the years the IRS date has been incorrect resulting in the taxpayer losing the window to file for the hearing. 

 

The request must be filed timely to preserve your right to judicial review of the determination issued in your Collection Due Process hearing. If your request for a Collection Due Process hearing is not timely, you can request an Equivalent Hearing within one year from the date of the notice, but you cannot go to court if you disagree with Appeals’ decision.

 

Next week:  Continuation of the Collection Due Process

 

(IRS Publication 594 and IRS.gov) (TTT 12/10/19)

Posted on

Collection Action – How to Appeal an IRS Decision

Collection Action – How to Appeal an IRS Decision

 

Collection Due Process (Part I)

 

The purpose of a Collection Due Process hearing is to have Appeals review collection actions that were taken or have been proposed.

 

After Appeals has made their determination and you do not agree, you can go to court to appeal the Appeals’ Collection Due Process determination.

 

You can request a Collection Due Process hearing if you receive any of the following notices:

  • Notice of Federal Tax Lien Filing and Your Right to a Hearing
  • Final Notice—Notice of Intent to Levy and Notice of Your Right to a Hearing
  • Notice of Jeopardy Levy and Right of Appeal
  • Notice of Levy on Your State Tax Refund—Notice of Your Right to a Hearing
  • Notice of Levy and of Your Right to a Hearing

 

 

Next week:  Continuation of the Collection Due Process

 

(IRS Publication 594 and IRS.gov) (TTT 12/3/19)

 

Posted on

Collection Action – How to Appeal an IRS Decision

Collection Action – How to Appeal an IRS Decision

 

You have the right to appeal most collection actions to the IRS Office of Appeals (Appeals).

Appeals is separate from and independent of the IRS Collection office that initiates collection actions.

Appeals ensures and protects its independence by adhering to a strict policy prohibiting certain communications with the IRS Collection office or other IRS offices, such as discussions regarding the strength or weakness of your case. When an IRS office is to be engaged in discussions, you will be invited to participate in the conference, or provided any written document to give you an opportunity to comment.

Your main options for appeals are the following: Collection Due Process or Collection Appeals Program

 

Next week:  Collection Due Process

 

(IRS Publication 594 and IRS.gov) (TTT 11/26/19)

Posted on

What happens when I have not file prior year returns?

What happens when I have not file prior year returns?

 

Past Due Tax Returns

 

First alert:  File all tax returns that are due, regardless of whether or not you can pay in full. File a past due return at the same location where you would file an on-time return.

 

If you do not voluntarily file your individual income tax return you risk losing your refund and the IRS may file a substitute return for you.

This return might not give you credit for deductions and exemptions you may be entitled to receive.

 

The IRS may send you a Notice of Deficiency proposing a tax assessment. Filing a past due return after the Notice of Deficiency was sent does not extend the 90 day period for filing a petition to the United States Tax Court.

However, the past due return will be considered in determining whether there will be a reduction in the amount of tax increase previously proposed in the Notice of Deficiency.

 

If you do not file a petition in Tax Court and a tax increase has been determined, the IRS will proceed with their proposed assessment as a substitute return. If the IRS files a substitute return, it is still in your best interest to file your own tax return to take advantage of any exemptions, credits and deductions you are entitled to receive. The IRS will generally adjust your account to reflect the correct figures

 

Next week:  Collection Action – How to Appeal an IRS Decision

 

(IRS Publication 594 and IRS.gov) (TTT 11/19/19)

Posted on

Collection of Employment Taxes – Info for Employers (Part IV)

Collection of Employment Taxes – Info for Employers (Part IV):

 

Trust Fund Recovery Penalty

 

The Trust Fund Recovery Penalty is a penalty that is assessed personally against the individual or individuals who were responsible for paying the trust fund taxes, but who willfully did not do so. The amount of the penalty is equal to the amount of the unpaid trust fund taxes. For additional information, please see Notice 784, Could You be Personally Liable for Certain Unpaid Federal Taxes? or visit www.irs.gov/TFRP.

 

If the Trust Fund Recovery Penalty is proposed against you, you’ll receive a Letter 1153 and Form 2751, Proposed Assessment of Trust Fund Recovery Penalty.

 

If you agree with the penalty, sign and return Form 2751 within 60 days from the date of the letter. To avoid the assessment of the Trust Fund Recovery Penalty, you may also pay the trust fund taxes personally.

 

If you disagree with the penalty, you have 10 days from the date of the letter to let the IRS know that you don’t agree with the proposed assessment, have additional information to support your case, or want to try to resolve the matter informally. If you can’t resolve the disagreement with them, you have 60 days from the date of the Letter 1153 to appeal with the Office of Appeals. For more information, see Publication 5, Your Appeal Rights and How to Prepare a Protest if You Don’t Agree.

 

If you don’t respond to the letter, the IRS will assess the penalty amount against you personally and begin the collection process to collect it. They may assess this penalty against a responsible person regardless of whether the company is still in business.

 

Next week:  Past due tax returns

 

(IRS Publication 594 and IRS.gov) (TTT 11/12/19)