Form 12153 - Your Key to a Fair IRS Appeals Collection Due Process Hearing and Stopping Them From Taking Your Money

Receiving a notice from the Internal Revenue Service (IRS) regarding an unpaid tax  can be a stressful experience, particularly when that notice mentions a Federal Tax Lien or an intent to levy your assets. These are powerful collection tools at the IRS' disposal, but taxpayers are not without recourse. The tax code provides a critical pathway to challenge these actions and negotiate alternatives through a Collection Due Process (CDP) hearing. The key to unlocking this vital protection is Form 12153, "Request for a Collection Due Process or Equivalent Hearing." A comprehensive overview of Form 12153 will be covered, the legal framework that underpins it, and the strategic considerations for taxpayers facing IRS collection efforts. 

At its core, the CDP hearing is a formal process that allows taxpayers to have their case heard by the IRS Independent Office of Appeals before the IRS proceeds with enforced collection actions like seizing property, garnishing wages or levying bank accounts. This right was established by Congress to ensure that taxpayers are treated fairly and have a chance to resolve their tax liabilities without suffering undue hardship. The legal authority for these hearings stems directly from the Internal Revenue Code (IRC), specifically sections 6320, which pertains to liens, and 6330, which covers levies. These statutes mandate that the IRS must provide taxpayers with a notice of their right to a CDP hearing and an opportunity to be heard by an impartial appeals officer. 

The process is initiated when the IRS files a Notice of Federal Tax Lien or sends a Final Notice of Intent to Levy and Notice of Your Right to a Hearing. Upon receiving one of these notices, the clock starts ticking. A taxpayer has a strict 30-day window from the date of the notice to file Form 12153 and request a CDP hearing. This deadline is critical; a timely request suspends most collection activities while the case is pending with the Office of Appeals, providing a crucial pause to negotiate a resolution. If the 30-day deadline is missed, a taxpayer can still request a hearing for up to one year, but this is considered an "Equivalent Hearing" (EH). While an EH allows for the same issues to be discussed, it does not suspend collection actions and, most importantly, does not grant the right to seek judicial review in the US Tax Court if the taxpayer disagrees with the outcome. 

Completing Form 12153 is a straightforward but important process. The form requires the taxpayer to provide their identifying information, specify the tax periods in question, and indicate the basis for the hearing request—whether it's in response to a lien, a levy, or both. The most crucial part of the form is Section 8, where the taxpayer must state the reason for their request. This can include challenging the appropriateness of the collection action, claiming innocent spouse relief, asserting that the tax was discharged in bankruptcy, or proposing a collection alternative. It is essential to provide a clear and concise explanation for the dispute, as the request will not be honored without a valid reason. 

During the CDP hearing, the appeals officer, who must have had no prior involvement with the taxpayer's case, will review the matter. The taxpayer can raise any relevant issue, including proposing collection alternatives like an Installment Agreement or an Offer in Compromise. A key aspect of the appeals officer's role is to conduct a balancing test, as mandated by IRC § 6330(c)(3). This test requires the officer to weigh the IRS' need for the efficient collection of taxes against the taxpayer's legitimate concern that the collection action be no more intrusive than necessary. Taxpayers may also, in certain circumstances, challenge the existence or amount of the underlying tax liability itself. This is generally only permitted if the taxpayer did not receive a statutory notice of deficiency or did not have a prior opportunity to dispute the liability. 

If the taxpayer and the Office of Appeals cannot reach an agreement, the taxpayer has the right to seek judicial review. A petition can be filed with the US Tax Court within 30 days of the date of the Notice of Determination from Appeals.  

Understanding your rights and the procedures surrounding Form 12153 is paramount for any taxpayer facing IRS collection actions. It is a powerful tool that provides a formal venue to halt collection, negotiate alternatives, and ensure a fair resolution.  

Facing an IRS collection notice can be daunting, but you have rights and options. The Collection Due Process hearing is a fundamental protection that allows you to present your case and explore resolutions before the IRS takes enforced collection action. If you have received a notice from the IRS and are unsure of your next steps, it is crucial to act quickly. Don't navigate this complex process alone.

Book a consultation with us when you are ready to get started to discuss your situation and ensure your rights are protected. 

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