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IRS Form 9423: The Collection Appeal Request Process

IRS Form 9423 The Collection Appeal Request Process - Rush Tax Resolution

If you’ve been approached by IRS Collections, you know how stressful it can be. However, you may have the opportunity to begin the collection appeal request process with IRS Form 9423.

If the IRS finds that you owe back taxes, and decides to begin its collection process, one of your only forms of recourse is to create an appeal request to halt or modify their enforcement procedures.

This is where IRS Form 9423 comes into play. It is the form you will have to fill out to begin the process for requesting an appeal of the collection process, to halt or modify the IRS’ different collection actions.

 

What is IRS Form 9423?

The Collection Appeal Request, or Form 9423, is used by taxpayers to request an appeal for liens, levies, seizures, and rejection, modification, or termination of installment agreements. In general, IRS Form 9423 allows a taxpayer to specifically appeal the following actions under what the IRS calls the Collection Appeals Program:

      • A levy or seizure action that has or will occur.
      • A tax lien that has or will be filed.
      • Filing a tax lien against an alter-ego or nominee’s property.
      • Denial of requests for lien modifications, specifically discharge, non-attachment, withdrawal, or subordination.
      • A rejected, modified, or terminated installment agreement.
      • A rejected request to return levied property under accordance with IRC 6343(d) (premature/lifted levy).
      • A rejected claim to return levied property under accordance with IRC 6343(b) (wrongful levy).

When filling out IRS Form 9423, you will be asked to provide identifying information, explain why you disagree with the collection actions the IRS has taken or plans to take, and provide your signature. The IRS will process your appeal request, and the Collection Office will halt collection until either your appeal is approved or processed and otherwise settled.

You cannot have a higher court review the resolution of the Collection Appeals Program once an appeal has been settled. But if the IRS rejects your appeal, you do have other options.

 

Understanding the Collection Appeals Process

The Collection Appeals Program is the means by which you can appeal a planned or taken collection action via the office responsible for that collection action. You do not begin a Collection Appeals Program with the Independent Office of Appeals, but with the office responsible for the collection actions you want to appeal.

A tax professional can help you fill out IRS Form 9423 and communicate with the office in question, to ensure that your appeal gets the attention it deserves.

 

Appealing a Notice of Federal Tax Lien

A Notice of Federal Tax Lien is a legal claim made by the government over your entire account. This means everything you own is temporarily put on hold until your debt is paid. The IRS doesn’t claim your home or your property but does limit your ability to sell assets or secure financing. In practice, this means that another creditor or debtor cannot supersede the IRS’ claim over your property.

This can massively reduce your financial options, until the tax lien is lifted. You can request a lien certificate to limit the lien’s effect over a specific property or debtor in order to repay your debt. If the IRS rejects your request for lien certification, or you find the lien to be unwarranted/premature, you can make an appeal.

 

Appealing a Notice of Intent to Levy

A levy is a physical claim of a property or account for the fulfillment of a tax liability. The IRS can claim an asset like a parcel of land and sell it for its quick sale value. It can then use that money to cover your debt and either sending you the remainder or issue another levy for your outstanding tax liability.

If you can prove that your property was levied and/or sold prematurely, or that the levy was filed falsely, you can file an appeal to be reimbursed or to undo the levy.

 

Appealing an Installment Agreement Change

Installment agreements are necessary when paying the IRS back in anything other than a single lump sum. If you fail to make a payment, the IRS may cancel the agreement, and resume collection actions against your account. You can appeal this decision if you provide reasonable cause for your late payment.

If the IRS rejects your installment agreement request, it may be due to low income. You can appeal this and explain that you will be able to pay despite previous income issues.

If the IRS modifies your installment agreement, it’s usually because your income has increased (fewer, but bigger monthly dues). You can appeal against a modification of your agreement if you do not agree with it.

 

Collection Appeals Program and Collection Due Process Hearings

The Collection Appeals Program is separate from a Collection Due Process hearing. CDP hearings are launched through the IRS’ Independent Office of Appeals, through a Form 12153, functioning as an alternative way to keep the government from making a move on your property or tax account if you fear a lien or levy, or have been affected by a lien or levy. There is a 30-day deadline for filing a Form 12153 after receiving a notice of a collection action.

As with the Collection Appeals Program, you have to provide a good explanation for why the IRS shouldn’t move in on your tax account – from financial distress to a wrongful lien or levy, given the right evidence.

The main difference between the Collection Appeals Program and the Collection Due Process hearing is that a CDP hearing goes through the Office of Appeals, while the CAP goes through the Collection Office handling your tax account. CAPs can be used to challenge changes in a taxpayer’s installment agreement, while CDP hearings cannot. Unlike a CAP decision, a taxpayer can appeal to the US Tax Court if they do not agree with the decision of the Independent Office of Appeals.

 

Should You Request Participation in a Collection Appeals Program?

As with any appeal made to the IRS, it’s only best if you have good cause. The simplest and most common reason to appeal to the IRS is that you do not have the means to pay your back taxes due to disability, high medical costs, lack of income, or terminal illness.

In other cases, you may find evidence that the IRS made a simple error when calculating your taxes or issuing a premature collection action, such as not following the proper procedure when filing a Notice of Federal Tax Lien.

If you attempted to file a lien certificate of subordination, discharge, or withdrawal, and were refused, you can work with a professional to appeal the IRS and explain why you meet the requirements for a lien certificate.

You can also file an appeal when aiming to convince the IRS that releasing a lien or reversing a levy assists you in paying your back taxes (for example, by allowing you to use your property to secure financing for your debt).

In most cases, the Collection Appeals Program is a taxpayer’s only hope after their Collection Due Process rights expire.

 

Working With the Right Team

When seeking help or representation for the Collection Appeals Program (or a Collection Due Process hearing), it’s important to turn to the right people.

You can seek representation from an attorney, a certified public accountant, or an enrolled agent. Regardless of who you choose to represent or help you, always look for a tax professional.

We at Rush Tax Resolution pride ourselves on being upfront and realistic with our clients, while providing optimal outcomes. Certain tax situations can be especially difficult to navigate and having the right team in your corner can make all the difference in the world. Give us a call today.

What Happens If the IRS Sends You to Collections? 6 Things to Know

What Happens If the IRS Sends You to Collections - Rush Tax Resolution

Dealing with the IRS can be incredibly stressful, so what happens if the IRS sends you to collections? Here is what you should know.

We all know that the taxman can be frightening. But it’s important to separate fact from fiction.

The IRS is tasked with enforcing tax law and ensuring that taxpayers are held accountable for their tax liability – but it can and does make mistakes and offers plenty of recourse to taxpayers caught in a sticky situation.

Furthermore, taxpayers unable to pay or faced with certain circumstances can negotiate their way out of collection actions entirely – or even fight for a reduced tax liability. But what happens if the IRS sends you to collections?

 

Understanding What Happens if the IRS Sends You to Collections

If you are sent to IRS collections, there are a few things that will happen. But can the IRS pressure you over the phone? Harass you at your place of business? Send you to jail? Or demand payment through threatening calls and messages? Let’s set the record straight on a few things, and help you better understand your situation:

 

The IRS Won’t Harass You at Home

There is a code of conduct that the IRS must generally follow, as well as a taxpayer “bill of rights”, which somewhat serves as a guideline for the IRS’s treatment of taxpayers regardless of the situation they are in. Let’s remember that the people working at the IRS are doing a job like any other – and are trying to do it to the best of their abilities.

Some people do impersonate IRS personnel and threaten people over the phone and via emails. These are often IRS tax scammers, either:

      1. Trying to collect certain information tied to your tax account, such as your social security number or tax identification info to collect tax refunds;
      2. Or pressure you into making “payments” through gift cards, cryptocurrency, and other suspicious avenues.

If you’ve received legitimately threatening or pressuring calls from someone claiming to work for the IRS, especially if they demanded money or immediate payment via the phone, or asked you to divulge private and identifying information (such as certain account numbers or details), then get in touch with the IRS via official channels (such as their hotline or website) and make a report, and install call blocking software for your smartphone, as well as employing other ways of blocking these scam callers and robocalls on your landline.

 

The IRS Won’t Demand Information Over Email

If the IRS sends you to collections, they will not reach out and demand information via email. A common scam involves getting people to provide information via fake websites, forms, or edited documents. Note that the IRS will not use email to ask for information. They may notify you of certain things via email but will only ever send official letters and notices of the mail, including any applicable forms.

The IRS will never ask for you to send them your information via email. If at all, they would ask that you sign into your tax account via the official IRS.gov website to review your information and tax notices, including collection notices and outstanding tax debt.

To that end, the IRS will never demand payment via email. The IRS only accepts payments via the official website, and over the Electronic Federal Tax Payment System. Do not attempt to ever send the IRS any money outside of these official channels.

 

The IRS Won’t Forget Your Debt

If you have a tax debt to the government, and haven’t paid it for years, but haven’t been pressured by any specific collection actions, this may be because the IRS didn’t pursue your account in particular over a rather small debt.

But that debt does not go away, and it continues to accrue interest until it is paid. The IRS can and will pick up the slack at any point in time, which can result in tax liens and tax levies.

 

The IRS Has to Inform You Via Mail

If the IRS has sent you to collections, any notice or letter the IRS sends your way has to come via physical mail. If the IRS fails to deliver an important notice or letter to you, you can use that to your advantage when arguing for a reduced penalty – especially if you only paid your overdue balance a few days after it was due for a penalty.

However, you are responsible for keeping the IRS up to date on where it should send your mail. Failing to do so can land you in very hot water, and make it impossible for you to appeal a decision to penalize your tax account, even if you didn’t get your hands on the notice you were supposed to receive in time.

 

The IRS Can Compromise

If the IRS has sent you to collections, your tax debt is not necessarily set in stone. While your tax account can continue to accrue debt, it can also potentially see a reduction in debt.

For one, if you successfully appeal that it was the IRS that made a mistake (it does happen!), you may see your new tax debt wiped out. But if you really do owe back taxes, or made a mistake on your return and have to pay up, the IRS will consider compromising on the amount you pay if you:

      • Cannot afford to pay your entire debt within a reasonable period through monthly installment agreements, and
      • Send a reasonable offer to the IRS based on what you can afford to pay, given current assets and income.

These offers in compromise are notoriously difficult to get, so it’s always a good idea to approach a tax professional first.

 

The IRS Does Employ Private Debt Collectors

This might come as a surprise, but the IRS does not do all of its debt collection work via its own agents. Sometimes, it must outsource. However, it outsources to only three specific collection agencies, and these agencies have no right to collect payments themselves.

All they are in charge of doing is establishing contact between you and the IRS’s payment system, and help you resolve your debt. They are not allowed to threaten you, and must also respect the same rules and guidelines for taxpayer interaction as your IRS.

 

What to Do If the IRS Sends You to Collections

Yes, the IRS does have the tools to pressure you into payment – but you also have certain tools at your disposal. Working with a tax attorney can help you protect yourself from any uncouth action the IRS might take – and help you ensure the best possible deal for your tax debt.

Now that you know what happens if the IRS sends you to collections, remember that one thing is always true: you should deal with your tax problems as soon as possible. We at Rush Tax Resolution can help you put together the right plan to get the IRS off your back and get back on the taxman’s good side.

IRS Collections: What You Need to Know (Post COVID-19)

IRS Collections Beginning Again - Rush Tax Resolution

During the pandemic, the IRS temporarily halted all collection actions. In the coming months, IRS Collections will begin again, impacting taxpayers across the United States. Here’s what you need to know.

As we enter a post-pandemic state, the IRS begins to normalize the collection process and return to its regular pace. This will have an impact on taxpayers facing potential federal tax liens or levies, as well as other IRS collections actions.

Collection actions are part of the IRS’s repertoire against missed deadlines, unfiled tax returns, and missed tax payments. If you owe the government money, it can and will collect – eventually. Until it does so, it will coerce collection through ramping penalties and interest, and a restrictive tax lien.

These consequences can be avoided – if you’re prepared, and act as soon as possible. Let’s go over how the IRS plans to approach collection actions throughout the rest of 2021 and beyond, and let’s review the official timeline.

 

Why Were IRS Collections Put on Hold?

As part of an effort to reduce the pressure of economic instability following the lockdowns implemented as a result of COVID-19, the IRS delayed and held off on pursuing certain action collections starting March 2020. This included holding off on issuing federal tax liens.

However, things will begin returning to a more “business as usual” pace, according to a memo released on June 15, 2021, as COVID-19 restrictions continue to loosen, and the country continues its path towards normalcy.

IRS collections will begin, including levies on wages and bank accounts, after 30-45 days of issuing a taxpayer notice. Levies and liens will resume starting August 15th, 2021. However, taxpayers who have previously received tax lien notices for their late and overdue tax payments will have begun receiving further notices as soon as June 15th.

Tor recap the specifics of the memo:

      • Balance Due notices are usually automatically sent to taxpayers when a deadline has passed, and the balance remains unpaid. Starting June 15, 2021, the IRS will begin following up on taxpayers who have not responded to older notices.
      • Taxpayers with prior notices (tax liabilities dating back to 2019/2020 or older) will be notified that they have between 30 and 45 days to respond before the IRS takes further action.
      • Taxpayers who fail to respond may be subject to liens and levies starting August 15, 2021.

 

What Are Tax Liens and Levies?

Tax liens and levies are the IRS’s primary means of enforcing a taxpayer’s responsibility to pay their respective tax dues. With IRS collections, the primary goal of a lien or levy is to encourage a taxpayer to settle their debt – and both liens and levies make a compelling case for doing so.

A federal tax lien is a legal claim on your assets and property on behalf of the government. Federal tax liens are a matter of public record, and they mean that the government has the first right to your assets as creditors. What this boils down to is a block on other forms of financing. Under a lien, you must pay your debt to the government before other creditors can collect from you. This can make it very difficult to secure a loan or seek financing.

– Tax Liens

Tax liens are one of the last things to be lifted when tackling your tax account’s overdue payments. Even declaring yourself currently not collectible does not eliminate a tax lien. Tax liens are lifted when the debt is paid but may also be prematurely lifted if you enter into a long-term payment plan with the IRS, and have been adhering to it consistently.

If you somehow choose to ignore a lien, or a notice of a lien, then it may escalate into a levy.

– Tax Levies

A levy is an actual claim on your assets and property. The government may clean out a bank account, take a portion of your paycheck every time it comes in (based on your filing status and number of dependents), or take and sell a non-primary property you own at its quick sale value.

If any of these IRS collections actions result in you still owing the IRS money, they may issue a second levy, or continue to garnish (claim) your wages. If the sale of your property or emptying of a personal account resulted in a remainder after your debt was paid, the IRS will send you that remainder.

Most people rightfully want to avoid levies at all costs. Regardless of whether you’re employed or self-employed, a levy can be an unexpected and painful intrusion into your financial health.

If you want to know how to avoid liens and levies and aren’t sure how to pay off your tax debt, your first priority should be to get in touch with a tax professional. You want someone who can communicate with the IRS and help you negotiate a plan that suits your circumstances and financial capabilities, without risking an extended lien or levy.

 

Other IRS Collection Programs to Resume

Aside from resuming liens, the IRS has also made note of the Department of State’s (DOS) right to exercise their authority to revoke the passports of taxpayers with seriously delinquent tax debt, starting July 15, 2021.

The IRS has resumed identifying and naming examples of seriously delinquent tax debt starting March 2021. Being certified seriously delinquent by the State Department restricts a taxpayer from obtaining a passport or renewing their travel documents.

Furthermore, the IRS will continue to automate levies in coordination with other state and federal agencies, by the following dates:

      • June 2021: Balance due notices (will start being mailed by the Automated Collection System (ACS).
      • July 15, 2021: Automated levies will go out via the Federal Payment Levy Program (FPLP), State Income Tax Levy Program (SITLP), and the Municipal Tax Levy Program (MTLP).
      • August 15, 2021: Automated levies will continue for the Alaskan Permanent Fund Dividend Program (AKPFD). Notice of Federal Tax Liens will also be issued starting August 15.

The IRS has also made several unrelated announcements on the subject of tax enforcement and tax investigations. These include new cryptocurrency tax enforcement projects, investigations into high-income non-filing taxpayers, and repatriation suits to be filed against taxpayers with foreign assets through FATCA, and more.

IRS collections is ramping back up. If you have been putting off your IRS debt, now is the time to take action. Contact our team of professional tax attorneys today.

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