If you have received a notice from the IRS stating they are about to seize your bank account or garnish your wages, it is normal to feel scared. The good news is that you have rights. IRS collection actions include levies, liens, and wage garnishment. Collection due process is a critical protection available for taxpayers.
Every taxpayer should know their collection due process rights. As post-COVID backlogs and enhanced enforcement come into effect, it is crucial to know what you are up against. Here is what you should know about collection due process in Richmond and how hiring a tax litigation lawyer could be helpful.
A CDP hearing is a legal right allowing taxpayers in Richmond to appeal certain IRS collections before they happen, according to Internal Revenue Code § 6330 and § 6320. The goal of these hearings is to prevent unjust collection as well as to ensure taxpayers have other options, including installment agreements or offers in compromise. This is a chance to stop or delay aggressive actions taken by the IRS.
Taxpayers may be entitled to a CDP hearing if they have received a Final Notice of Intent to Levy or have had a Notice of Federal Tax Lien filed against them. Each person has 30 days from the date on the notice to request a hearing. If an individual misses the deadline, they have limited rights to appeal.
The first step to requesting a CDP hearing is to fill out IRS Form 12153. The individual requesting the hearing will have to select their reasons for doing so, which might include a challenge to the debt’s validity, a proposal of an alternative agreement, or a request for spousal relief. This request must be mailed to the correct IRS office. In the meantime, it is crucial to document everything.
After a taxpayer in Richmond requests a collection due process hearing, the IRS will suspend the collection activity and transfer the case to the IRS Office of Appeals. A hearing will be scheduled, and an appeals officer will review the case. The ruling could uphold the collection action, identify collections as halted, or accept a payment plan or offer in compromise.
If the outcome of the hearing is not favorable to the taxpayer, all hope is not lost. Taxpayers can file for judicial review, petitioning the U.S. Tax Court within 30 days to appeal. There are some alternatives to filing an appeal, such as requesting a reconsideration of an audit or submitting a new resolution proposal. For instance, a taxpayer denied an offer in compromise may negotiate to receive an installment agreement.
A tax attorney offers local knowledge and familiarity with Richmond IRS offices and Appeals Officers. They can also develop strategic plans and tailored proposals that match IRS expectations. An attorney also offers representation during hearings, allowing taxpayers to avoid common missteps and missed deadlines related to collection due process in Richmond.
Most importantly, do not ignore IRS notices. Avoid aggressive collection actions and contact a tax attorney to learn more about your options. You can protect your financial future by speaking with a professional who understands your situation and works hard to protect your rights.