IRS Appeals

If you want to challenge the decisions of the IRS you must file-on time- the appeal of each decision you want to challenge at each level. Once there is a break in the chain of appeals, you lose the right to continue to challenge the IRS action through to Tax Court.

There are advantages to filing appeals. One advantage of pursuing an appeal is that appeals officers have more latitude to settle a case than revenue officers do. Another advantage is enforced collection-such as levies and wage garnishments-will stop while the appeal is in process to resolve the case. This is a chance to settle your case, and you can address multiple issues at once.

Before levies issue on a tax debt, you will receive two letters. The second letter describes your appeal rights.

First, however, you will receive a letter that makes a demand for payment, or threatens that the IRS will seize assets or issue public notices that they are filing a lien. This letter is designated a CP504, with no appeal rights yet. This letter gives you thirty (30) days to call the IRS and set up full payment or arrange an installment agreement or another collection alternative-Offer in Compromise, Penalty Abatement, or Innocent Spouse.

The next letter, Letter 1058, Final Notice of Intent to Levy, will advise you that the IRS will seize assets. It will also indicate your appeal rights and includes a copy of the collection due process hearing request form (CDP). The CDP form must be completed and received by the IRS within 30 days of the date on the letter.

The CDP form is to notify the IRS that you are filing an appeal. You must complete the form with your name, Social Security number, address, phone, and the tax periods being appealed. You can hand write the information on the form or go online to and type the information into the PDF form on the website, print it out, sign it, and mail it to the IRS with a copy of the final notice so that the appeals office has a copy of the letter you are appealing.

The information you need to complete the form is in that letter (Final Notice of Intent to Levy) that you are appealing. Typically the 1058 letter has the tax periods from the Form 1040 (for example, 2001 and 2002) which are subject to the final notice, levy, and resulting appeal. Check the appropriate box as to whether the letter concerns a levy or a lien, and list those periods on the final notice letter. Remember to sign the appeal. You must file the CDP appeal on time.

To prepare for the hearing, list the issues you want to discuss with the appeals officer, such as an installment agreement, offer in compromise, penalty abatement, innocent spouse, and any other relevant issues you’ve learned about in this book. All of these issues can be raised and discussed during the appeal.

Your job is to bring all of the completed, required, appropriate forms, with all necessary supporting documents, to help you in your discussion with the appeals officer of the background facts of your case. You will have a month or so to put this together before the hearing or settlement conference is scheduled, so do not waste time. Start now with the Form 433-A, which the appeals officer will need for the financial analysis of your case.

After the hearing and decision, if you do not like the outcome you can appeal to (an independent) Tax Court. If you don’t like the Tax Court’s decision, you can appeal to the US Court of Appeals and then, finally, to the US Supreme Court. An expensive and time-consuming strategy, but this is a two-way street and the fact that you have these options gives you negotiating power referred to as the threat of litigation. The downside, however, is that during the appeals process the statute of limitations is tolled (or stops ticking/expiring).

These are your due process rights.

Call now to ensure your appeal rights are protected. Call 1-877-829-5267.