Not every levy that the IRS plans to implement is justified. There may have been an administrative error or some other reason that the levy should not take place. However, it is more likely that a levy is creating an immediate economic hardship on the taxpayer. You have the right to appeal a tax levy in Washington DC. A seasoned tax levy attorney could provide trusted counsel and propose the best method of appealing this decision.
How Can a Lawyer Help Someone Appeal a Tax Levy Notification?
A lawyer could help someone appeal a tax levy notification by reviewing the balance due and the collection statute expiration date. The attorney could also review the individual’s ability to repay the IRS in the taxpayer’s Form 433, Collection Information Statement, and review collections alternatives.
If a DC taxpayer receives a levy notification, their primary appeals options are to request a Collection Due Process (CDP) hearing, an Equivalency Hearing, or using the Collection Appeals Program, also known as CAP.
Collection Due Process
A request for a CDP involves a taxpayer exercising their right to take the enforcement out of the hands of the automated collection services, and give it to an independent person at the IRS Office of Appeals. This person will take a fresh look at the taxpayer’s ability to repay the IRS and to resolve their tax debt without enforcing collection levies.
To file for a CDP hearing, the taxpayer needs to complete Form 12153, along with an explanation of their situation. This request must be filed within 30 days of being notified of the right to a hearing.
There is sometimes a limitation to the Collection Due Process hearing. Underlying tax liability cannot be challenged in the CDP hearing if statutory notice efficiency was a previous issue or if the taxpayer had a prior opportunity to dispute the underlying liability.
Equivalent Hearing
An Equivalency Hearing appeal is essentially an untimely Collection Due Process hearing, which means the taxpayer requested a hearing more than 30 days after the notice was given. It is similar to the CDP in that it allows the taxpayer to provide collection alternative. However, there are key distinctions.
In the case of CDP that has been timely filed, if the taxpayer does not get a result they like, they can then make an appeal to the U.S. Tax Court. In an Equivalency Hearing, that appeal to Tax Court is not allowed. Another distinction is that the statute of limitations for collection is suspended in a CDP hearing, while in an equivalency hearing it is not.
To file an equivalency hearing, the taxpayer would also need to complete Form 12153, along with a written explanation, just like in the CDP. There is no time limit to file an equivalency hearing appeal.
Collection Appeals Program
The Collection Appeals Program is a way for a taxpayer to challenge enforced collections in a more informal – but faster – way than going through a CDP hearing, provided through Internal Revenue Manual § 8.24.1. They could also consult IRS Publication 1660 (Collection Appeals Rights).
If the taxpayer enters a CAP, they cannot appeal the ultimate decision of that manager to U.S. Tax Court.
Work With a DC Attorney to Appeal Your Tax Levy
It may be possible to get the IRS to rescind its Notice of Intent to Levy. Learn about how tax levy appeals work in Washington DC and retain the services of Pontius Tax Law. We provide dedication and value to your case, so you always know what your options are.