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.
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.
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.
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.
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.
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.
Pontius Tax Law, PLLC is a tax law firm that strives to resolve sensitive tax problems through trust, dedication and value. The law firm was founded by John Pontius with offices in Washington, DC, Rockville, MD, Bethesda, MD, Fairfax, VA, and Alexandria, VA. Mr. Pontius represents individual and business clients with sensitive and serious tax matters before the Internal Revenue Service and state taxing authorities. His client base is local, national, and international.
Over the course of his career, Mr. Pontius has represented businesses and individuals with complex tax issues in the following areas: FBAR examinations, offshore and domestic disclosures, FATCA, FIRPTA, tax planning, unfiled tax returns, release of tax liens and levies, trust fund recovery penalty, IRS and state audit examinations, as well as appeals, penalty abatement, U.S. Tax Court litigation, along with defense of tax fraud and evasion. If you require assistance from a tax lawyer, contact Mr. Pontius to discuss your situation.