IRS Appeals, Collections Appeals Program, and Equivalency Hearings
The IRS is the very definition of “large bureaucratic government agency” that is understaffed and underfunded. As a result, sometimes a taxpayer does not get the attention their case deserves when they, or their tax defense lawyer, are seeking fair resolution to their IRS debt matter. This is why most tax lawyers like to be in an IRS Tax Appeals - they are very productive! When a tax case is on appeal, your tax debt lawyer has an opportunity to sit down, face-to-face with someone from the IRS where cooler heads and reason can prevail.
You cannot request a hearing simply to delay collections actions. Taxpayers, through their tax-debt defense lawyer, will request a hearing when they want to fight an IRS proposed collections action (e.g. IRS levy of property or wages), and have an alternative that the IRS should be willing to accept (e.g. offer in compromise, innocent spouse relief, installment agreement, or currently not collectible).
Different Types of IRS Hearings and Appeals
The most common ways the IRS appeals process take shape are at the collections due process hearing, IRS equivalency hearing (both the CDP and EH use IRS Form 12153), and with the collections appeals request (IRS Form 9423).
Collections Due Process (CDP)
The taxpayer has a right to request a CDP hearing within 30 days after receiving notice that the IRS has filed a lien or intends to levy. If you or your IRS tax lawyer timely files a request for a collections due process hearing, it will stop the tax debt statute of limitations. Requesting a CDP hearing will also put a halt to IRS collections efforts.
The difference between collections due process IRS hearings and other hearings is, at a CDP hearing, you can appeal the IRS’s decision to US Tax Court, if you don’t like the result of the CDP hearing.
If you want a hearing, but don’t want to toll / extend the IRS statute of limitations, you can let the 30 day period pass (after receiving lien notice or intent to levy notice from IRS), and then request an IRS equivalency hearing instead of a CDP hearing. Requesting an equivalency hearing will stop collections efforts, but will not extend the statute of limitations.
However, if you don’t like the result of the equivalency hearing, the taxpayer will not have the right to appeal to US Tax Court. Consult with your tax debt relief lawyer as to whether requesting a CDP or equivalency hearing is best for your particular situation.
Collections Appeals Request | Collections Appeals Program (CAP)
A collections appeal request is made to dispute an action of the IRS that isn’t handled by an equivalency hearing or collections due process hearing. Typically, this is when the IRS rejects an installment agreement request or modifies an existing installment agreement.