Stories abound about the IRS grabbing homes, cars, businesses, and just about any other Greater Memphis property they want, without warning. Maybe you’ve heard something to that effect.
Well, the fact is: The IRS can’t do that.
As a taxpayer, you’re entitled to advance warning and a fair hearing before the IRS can slap on anything, according to Internal Revenue Code Section 6330(c)(2)(B), “Notice and Opportunity for Hearing Before Levy.”
So, here’s what you need to know about that…
Your chance to be heard
If you don’t pay your taxes or arrange to settle your debt, the IRS or a state taxing authority can in extreme cases seize and sell any type of your real or personal property. They can also garner wages and freeze bank accounts. (All this follows your having received a prior written notice of tax due and, for whatever reason, you didn’t pay.)
Your Opportunity for Hearing notice could be one of a few you receive to inform you timely of your rights, including the right to a hearing regarding your tax problem as part of what’s called the Collection Due Process. A Collection Due Process (CDP) hearing is your chance to challenge proposed collection actions and counter with alternative methods of collection.
You’ll probably only get a notice once, but it still means that the IRS can’t put a levy on your Greater Memphis property without informing you that you’re entitled to hold a hearing before the levy. You do have only 30 days after getting a notice to request a CDP hearing (though for a long time afterward you may be able to get what’s called an “equivalent hearing”).
What the notice must say
There are also strict rules regarding how the notice is delivered to you and what it must make clear.
- They have to make sure your notice is delivered in person or direct to your Greater Memphis home or place of business, or sent certified or registered mail, with a return receipt requested, to your last known address. You must get it no less than 30 days before the day of the first planned levy.
- No gobbledygook is allowed in the language of the notice: In “simple and nontechnical terms” the IRS must tell you the exact amount of unpaid tax and make crystal clear that you can ask for a hearing during the 30 days.
- They also have to spell out what action they plan against you for taxes due, provisions and procedures applicable to the levy and sale of property and those relating to redemption of property and release of liens on your property – and your payment alternatives.
- The notice must also reiterate your right to a fair hearing by an impartial officer. Note: You have to request the hearing in writing.
At the CDP hearing
The IRS will have to verify that your tax debt is legit in all ways. You, in turn, will be able to bring up any relevant issue relating to the unpaid tax or the proposed levy. Your points can include innocent spouse relief, the appropriateness of the collection, and offers of such collection alternatives as substitution of other assets, an installment agreement, or an offer-in-compromise.
An appeals officer will balance the government’s desire to collect against the collection being “more intrusive than necessary” for you.
You won’t get a hearing if your reason for one is deemed “frivolous,” and the hearing will not cover anything decided in a previous hearing – don’t look to re-hash.
Levy actions are also generally suspended when you request a hearing.
Additional rights and representation
If you received both a lien and a levy notice, you can appeal both actions on Form 12153, “Request for a Collection Due Process or Equivalent Hearing,” or with one written request. Reasons for disagreeing are collection alternatives, bankruptcy, lack of notice, or economic hardship, among other reasons.
You have 30 days from the CDP hearing determination letter to seek a judicial review from the U.S. Tax Court. You can appeal only after attending a CDP hearing.
Remember, you have the right to choose an authorized representative to represent you before the IRS – including us or an attorney, or both.
One thing I always want to ensure is that you are not left alone defending yourself against the IRS. Sometimes it’s not just a matter of knowing the right things; it’s also a matter of having the confidence to navigate these things and come out on the other side better than you expected.
If you want that kind of support, well, that’s what I’m here for:
Standing up to the IRS for you,
Memphis Consulting Group, LLC