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Liens and Levies: Keeping Your Clients Options Open – Part 4



Collection Appeal Program (CAP)

We have been talking about all the things the IRS Collections Division can do to a taxpayer who fails to pay their tax liability. Now is the time to talk about what we, as out client’s representative, can do to stand between our client and all the things the IRS will try to put in place.

As we discussed before there are very specific things the IRS must do, in order, on the correct time line, and document to be able to take these types of drastic collections activities against a taxpayer. That is the place for us to start. Did the IRS follow it’s own rules? If you are not familiar with IRM Chapter 5, Collecting Process, and Chapter 8, Appeals Function, I suggest that you download a copy and keep it handy.

Assuming you are brought on board before time lines expire, the CAP is your first avenue of protest. The CAP can be requested via Form 9423 before or after the filing of a NFTL, levy, or seizure, or upon rejection or termination of an installment agreement.

IRS Publication 1660, Collection Appeal Rights, gives the taxpayer instructions on how to make an appeal in the case of the only contact having been in letter format and how to file an appeal when you have a specific Revenue Officer to work with.

When you file a Form 9423 you must indicate what you disagree with, explain why you disagree, the actions you have taken to solve the disagreement, and you must offer a solution to the tax situation.

If the CAP request is due to a disagreement with a Collection Manager then you must notify the Manager within 2 business days of your intention to file a CAP and the CAP must be postmarked within 3 business days to prevent the resumption of collection activities. If the CAP request is as the result of a seizure you must file the CAP paperwork within 10 business days.

If you are appealing the rejection or termination of an installment agreement, your request for an appeal must be made on or before the 30th day after the date on the letter the taxpayer received for rejection or the 76th day for a termination.

When filing a CAP be aware that the ASED/CSED statute is not tolled. That is to say the clock on the ASED and CSED statutes does not stop. Many things will stop the clock and we will discuss some of those later.

While, IRS Publication 594 specifically states that you may make an appeal via the phone with an employee and then the employee’s manager, it’s not the course I would recommend. The underlying IRC only mentions the filing of a hearing request in writing. As with everything in the government, if it isn’t in writing, it didn’t happen.

Lastly, is the outcome of a CAP conference. Once Appeals makes a decision regarding your case on a CAP hearing, that decision is binding on both you and the IRS. You do not have the right to Judicial Review of the CAP decision. This is a reason that a lot of representatives chose to use the CDP Hearing instead of the CAP.

Next:  The Collections Due Process Hearing

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Anything and everything taxes. I also write the Louisiana State book to go to our new Income Tax Course learners and the state-wide training for upper level Tax Professionals. I am an Instructor of all levels of tax related classes. I love to teach and write as well as taking the absolute best care of my clients all year round.

26 years in Law Enforcement (13 in the Air Force and 13 at the Bossier City PD), 20 years doing income taxes professionally.
My goals now are to spend many years being my 3 grandchildren’s MeeMaw, taking the absolute best care of my clients, and continually learning new things.
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Taxes! I specialize in military, states, small business, and rentals.
The postings made on this site are my own and do not necessarily represent HR Block’s positions, strategies or opinions.

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