Tax Relief Solutions

The IRS Urges Taxpayers to File Their Taxes in Order to Receive a Stimulus Check

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

  • The IRS is urging taxpayers to file as soon as possible in order to reap the benefits of this package.
  • If you have yet to file for your 2018 tax year, this could potentially affect your ability to receive a stimulus check. 
  • The IRS recommends that taxpayers file their tax returns as quickly as possible and that non-filers consider contacting a tax professional to assist them with their unfiled tax years.

The new stimulus package is meant to assist both taxpayers and businesses that have been affected by the Coronavirus pandemic. The package is meant to provide relief and aid to those that have been left without a paycheck, become unemployed, or are a business that has experienced a loss of customers.

In order to qualify for any compensation received from the stimulus package, you must have filed your taxes within the last two years.

The IRS is urging taxpayers to file as soon as possible in order to reap the benefits of this package. The IRS has notified taxpayers that in order to receive any potential credits or rebates, your 2018 and/or 2019 tax returns will need to be filed. If you have yet to file for your 2018 tax year, this could potentially affect your ability to receive a stimulus check. 

Once delinquent returns have been filed and a taxpayer is fully compliant, they are able to resolve any outstanding tax liabilities by either negotiating an installment agreement or inquiring with a tax professional to see if they qualify for an Offer in Compromise with the IRS in order to obtain a “Fresh Start.”

The IRS recommends that taxpayers file their tax returns as quickly as possible and that non-filers consider contacting a tax professional to assist them with their unfiled tax years.

If you need tax help, contact us for a free consultation.

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How to Avoid Getting Scammed by a Tax Preparer

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

  • Be wary of scammers pretending to be tax preparers.
  • Look for a tax preparer that is available year-round to assist you with all your tax questions.
  • Make sure that your tax preparer has a PTIN.
  • Don’t give any personal information away to a tax preparer if you’re still shopping around.

Tax season is hard enough to get through with all the documents you have to provide and the constant worry if you’re going to owe a tax debt. For most, it never crosses their mind that their tax preparer could be the one that is committing fraud by stealing their client’s personal information, refunds, or identity. 

Here are a few things to lookout for when choosing a tax preparer:

  • Do your research. When searching for a tax preparer make sure to verify that they have a history of working with clients and have successfully filed their taxes.
  • Check their availability. It is recommended that you find a tax preparer that works year-round to answer any questions that may arise about your tax return. 
  • Ask for their PTIN. Ask your tax preparer for their Preparation Tax Identification Number (PTIN). Paid tax preparers are required to register with the IRS and must include their PTIN on tax returns they have filed. 
  • Ask about their fees. Look out for tax preparers who charge fees based on the percentage of your refund or boast that they can give you a larger refund compared to other tax preparers. 
  • Don’t be quick to give your information away. Avoid giving personal information away like your social security number to tax preparers when you are just requesting a quote. 

If you need tax help, contact us for a free consultation.

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The IRS will Move Their Tax Filing Deadline to Assist Taxpayers Affected by Covid-19

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

  • Treasury Secretary Steven Mnuchin announced emergency measures to assist those affected by Covid-19
  • The IRS announced that it will be moving its national income tax filing day from April 15 to July 15.
  • Mnuchin encourages those who will have a tax refund to file now in order to get their money as quickly as possible. 
  • Taxpayers will have more time to file their taxes and pay their tax debt without interest or penalties. 

On March 17, 2020, Treasury Secretary Steven Mnuchin announced emergency measures that the government would take to assist those affected by Covid-19. Mnuchin announced that President Trump ordered taxpayers to be given additional time to file their taxes and make tax payments without interest or penalties.

The IRS announced that it will be moving its national income tax filing day from April 15 to July 15 as part of an effort to provide taxpayers with financial relief during such difficult times given businesses are temporarily closing their doors to prevent further spread of the virus. 

Mnuchin encourages those who will have a tax refund to file now in order to get their money as quickly as possible. For those who will most likely owe a tax balance, the IRS has provided this extension to help deal with the financial fallout of the coronavirus pandemic. For the taxpayers that are currently suffering financially, they will have more time to file their taxes and pay their tax debt without interest or penalties. 

The Treasury Department also announced earlier this week that the 90-day postponement on tax payments applies to 2019 income taxes that are owed and first-quarter tax payments that would have originally been due by April 15.

Although a tax extension has been implemented, it is still encouraged that all taxpayers file their tax returns and pay their tax debt before the new deadline. For those who wait to file their taxes until after the deadline, penalties and interest will be added to any balance owed and, should you receive a refund, penalties will be added for filing late. It is important for all taxpayers to keep themselves updated on current IRS events in order to understand how they may be affected by the new tax extension.

If you need tax help, contact us for a free consultation.

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Will Interest rates remain the same for the first quarter of 2020?

With tax season creeping upon us, some people may start to panic because they haven’t yet filed their tax return; some may even wait until the very last second before filing.  One of the reasons many Americans put off filing their taxes is because they know that they’re going to owe a tax liability and simply don’t want to deal with it. For those that have a balance with the IRS, they may have questions about whether or not they will accrue interest, how much interest they could accrue, how to avoid owing a balance, or how to prepare for next tax season. If you know that you’re going to owe the IRS at the end of the year, keep reading to find out how you’ll be affected and what you can do to prepare for the next tax season.

Interest rates

According to the IRS, if you end up owing a balance this tax season, interest rates will remain the same as last year for the first calendar quarter beginning January 1, 2020. Here are the interest rates that taxpayers can expect:

  • 5% for overpayments (4% in the case of a corporation).
  • 2.5% for the portion of a corporate overpayment exceeding $10,000.
  • 5% for underpayments.
  • 7% for large corporate underpayments. 

The Internal Revenue Codes determine their interest rates on a quarterly rate. These rates that have been announced this year are computed using the federal short-term rate and will be based on daily compounding.

How to avoid interest

If you have a tax liability, you can count on the IRS to notify
you of your balance due and what tax solutions they may have for you. In addition to what you owe, the IRS will tack on interest until your balance is paid in full. Some of the main reasons taxpayers
end up owing the IRS are:

  • Incorrect withholding amounts.
  • Failure to make estimated tax payments.
  • Underreporting income on their tax return.

So how can you avoid making the same mistakes listed above? The IRS provides tax relief help and encourages taxpayers that are W2 employees to do a paycheck checkup at least one time throughout the year to ensure they are withholding the correct amount to avoid any surprises like owing money come tax time. The IRS provides a withholding calculator for taxpayers to utilize when checking to ensure they’re on the right track. 

If you are a 1099 earner or even a W2 earner and you typically owe during tax time, it may be in your best interest to start making estimated tax payments quarterly. This will make it more likely that
when it’s time to file your taxes you won’t owe a liability, and will help you avoid any interest that would have been tacked onto your balance. IRS tax help for making your estimated tax payment can be found on their website

Another way to stop interest rates is by ensuring that you include all income on your tax return. Attempting to leave any income off your return could potentially lead to an audit, and if it’s found that income has been excluded, it could possibly lead to you owing a balance in addition to interest and penalties.

You can count on the IRS to continue adding interest to any tax balance that you owe. It is the taxpayer’s responsibility to ensure they don’t owe at the end of the year in order to avoid accruing any interest; this means making regular checks that your withholdings are accurate, making estimated tax payments if you know you will owe a balance when you file, and ensuring that you are reporting all income to the IRS to avoid having both penalties and interest. 

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

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What is Tax Evasion and How can it Affect You?

For some, it can be a terrifying ordeal to file your tax return, especially if you forget to include vital information when filing. It is important for taxpayers to double-check whatever they have placed on their return in order to avoid the IRS further looking into your tax return. The IRS will flag a taxpayer’s return if they notice that the income reported in inaccurate, if there are too many credits and deductions placed on the return, or if a taxpayer has not filed a required tax return. Although the IRS does not pursue many tax evasion cases, it is the taxpayer’s responsibility to ensure they are filing correctly to avoid the IRS investigating them – and finding something that can send them to jail. If you still have questions on what should be included in your tax return and how to properly file, here are some ways to avoid the IRS coming after you.

The IRS will usually start off with an audit process rather than taking immediate action against a taxpayer. During the audit process, the IRS will review the tax return(s) filed by a taxpayer to see what errors were knowingly made. If the IRS sees that a taxpayer has repeatedly made the same mistakes on several of their tax returns, such as not fully disclosing large amounts of income they had been receiving throughout multiple years, it could be seen as tax evasion. If a taxpayer continuously makes false statements and hides records like bank statements from an IRS auditor, it could potentially lead to criminal prosecution.

To avoid running into trouble with the IRS, specifically avoiding an audit, or being charged with tax evasion it is important to understand what you should include on your tax return. Whatever income you are earning needs to be included on your tax return. This means that if you have a full-time job as well as a side job, you must report both sources of income. If you also meet the filing requirements, you must file your tax return with the IRS. Avoiding filing a return for multiple years could be considered tax evasion by the IRS. This could also lead to the IRS looking further into the unfiled years and file a tax return on your behalf, which could cause any owed liability to increase on top of the penalties and interest you accrue for not filing in the first place. 

Understanding the IRS as well as their rules will help you navigate the tax filing system put into place. It is up to every taxpayer to keep themselves informed on any tax changes that may occur throughout the year and to also be transparent on their tax return by disclosing any information that may be vital for the IRS to know. If you are unsure of how to file and need further assistance, you can ask the advice of a tax attorney or a tax relief company that can provide you with the necessary assistance you need in order to get compliant with the IRS.

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

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The Difference Between a Lien, Levy, and Garnishment

The IRS can be problematic to deal with – especially if you don’t have a clue about anything tax-related. For those who owe a liability to the IRS, it is important to understand how the IRS works in addition to any potential action the IRS can take against you. If a tax balance is owed, they can place you into collections, garnish your paychecks, place a lien on your physical assets, or even levy your bank account(s). Here is what you need to know about the IRS taking action against you, and how to prevent yourself from falling into collections.

Liens

A lien is something that the IRS can place against you if you owe a tax liability. The IRS has the ability to place liens on physical assets such as a home or vehicle in order to ensure they receive the maximum amount of money if a taxpayer intends on selling their assets; they will take a portion of the profit of the sold asset and apply it to the balance owed to them. You can avoid having a lien placed against you by paying your balance owed in full and on time or, if you cannot afford to pay your balance off, you can contact the IRS to see what type of payment plan options you can be placed on. 

Levies

The IRS will send several collection notices warning a taxpayer of their intent to levy if the balance owed has yet to be paid in full. A levy occurs once the IRS considers you a delinquent taxpayer and they will go after your bank accounts, wages, or property in order to settle the debt that is owed. In some cases, the IRS will only seize a small sum of money from a taxpayer.  Other times, they will take a taxpayer’s entire savings and apply it to their tax balance. To stop an IRS levy, you can contact them directly and request they release the levy if you can prove that you are currently in a hardship. They will also release their levy if you can pay the amount owed in full, the collection period to collect the liability on your balance has ended, or the value of your property is more compared to the amount owed to the IRS. 

Garnishments

The IRS can also garnish your wages if you have an unpaid balance. The IRS can legally seize your income and apply it to the balance owed to them and garnish your paychecks, commissions, or any bonuses. There are a couple of ways to stop the IRS from garnishing you, you can either pay your balance in full or contact the IRS to set up a payment plan or hardship agreement if you qualify. 

The IRS will act against those who fail to pay their tax balance and they can and potentially will attempt to garnish, levy, or place a lien against you should you ever owe a tax liability. It is expected that all taxpayers remain compliant with the IRS and adhere to the most current tax laws in order to stay out of collections. 

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

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What Could Happen If You Don’t File Your Tax Return?

It is not hard to fall behind on your taxes. This can happen for a number of different reasons, such as you were unable to afford any tax services, you simply forgot about the tax deadline, or you suffered a serious illness which left you unable to file your tax return. It can be easy to avoid filing your tax return and ignore any serious repercussions – until the IRS starts sending you notices informing you of your unfiled tax years or a delinquent debt you have failed to pay. The IRS has the ability to take action against you for failure to file so it is important to know what the possible consequences could be for not filing your tax returns. 

The IRS can file a substitute return for you

The IRS can file a Substitute for Return, or SFR, on your behalf if they notice a failure to file for any tax year or years. The IRS does not file an SFR as a courtesy for those who fail to file their tax return and will not include any exemptions or deductions. Because of this, filed SFRs can reflect that a taxpayer owes a tax liability. The IRS will also send out an informative collection notice stating that a substitute return was filed or if there is a tax balance associated with the SFR.

The IRS has no time limit to collect from you

When it comes to the IRS taking collection action, the IRS has no timeline as to when they can stop. Once the IRS assesses a balance against you, they can garnish your wages, levy your bank accounts, and place liens on your physical assets. Just because you have past tax years that are unfiled, it does not mean the IRS has forgotten. It could even mean that the IRS will have the ability to hold you liable for your tax balance for up to 10 years from the date that your balance was assessed. 

Failure to file your tax return could be considered a crime

For some taxpayers, failing to file your tax return could mean getting in serious trouble. The IRS could consider this a crime and assume that you are evading the liability that they have assessed on your behalf. Consequences for not filing your tax return could mean jail time or fines as high as $250,000. 

Why it is beneficial to file your missing tax return

Filing all outstanding tax returns is important in order to avoid having the IRS take collection action against you. Although there is not a time limit for you to file any past tax years, the IRS does put a limit on receiving a refund for a previous tax return. The IRS also allows you to collect on a tax refund for up to three years from the due date of your return.

Filing your tax returns may not be the most exciting thing to do and some may even dread the filing season as it comes every year. Regardless of how you feel about having to file, it is a requirement in order to stay compliant and out of collections with the IRS. If you do have unfiled tax years, it can be beneficial to speak with a tax attorney or a tax resolution company in order to resolve any outstanding debt you have for the unfiled years or any tax debt that was assessed against you when the IRS filed an SFR for you. 

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

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How IRS Debt Can Ruin Your Travel Plans (and Jeopardize Your Passport)

The stress of owing the IRS can be overwhelming. The ever-present threat of having a lien placed on your assets, the fear every time you check your bank account to discover it has been levied dry, the strain of having the IRS garnish your monthly wages; these are just a few of the things that millions of Americans go through every day. Now, the IRS has made further changes to crack down on Americans who have not paid their taxes.

As of February 2018, Americans who owe the IRS more than $50,000 are at risk of having their passports revoked. If you have unpaid taxes owed to the IRS, it is important to either pay your balance in full or go on a monthly installment agreement in order to avoid having these travel restrictions placed on you. The State Department is now working alongside the IRS to not only revoke existing passports but to also deny any passport application for those with seriously delinquent tax debt.  (If you are overseas and your passport is denied, the State may issue a temporary passport that has limited validity to return to the United States.)  Essentially, until the tax debt is settled with the IRS, people will be placed on this new “No Passport” list.

There are a few exceptions to be aware of.  You won’t be at risk of being placed on the “No Passport” list if you are currently going through bankruptcy, if the IRS acknowledges you have been the victim of identity theft, or if there is a natural disaster declared on a federal level.  You may also be able to keep or renew your passport if you have a request pending for an installment agreement, have a pending offer in compromise with the IRS or if the IRS has accepted an adjustment that will satisfy your debt. And if you are placed on the “No Passport” list, the IRS will hold your application for 90 days to allow you to resolve your tax liability, pay your balance in full or enter into an installment agreement before revoking your passport.

This is yet another sign that the IRS is escalating their collection efforts against Americans who have unpaid taxes and another reasovn for you, as a taxpayer,  to stay current and compliant with their IRS filings.  If you are in the unfortunate situation of having delinquent IRS debt, it is wise to speak to a qualified tax professional who can help you evaluate your options sooner rather than later. Because when it comes to owing money to the IRS, delaying is almost always a losing strategy. For more information regarding on the IRS passport revocation and denial policy, click here!

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

Settle Tax Debt

It is indisputable that the Internal Revenue Service is one of the most powerful collection agencies in existence. The IRS has the authority to access every U.S. financial entity in its mission to collect back taxes. The IRS can even penetrate the cloak of corporate anonymity to affix personal liability to its officers, with the ultimate authority to decide just who is responsible.

settle tax debt

The IRS “Hammers”

Although there are some constraints, the IRS has vast powers, defined in its approximately 80,000-page Tax Code. Specifically, the IRS has the authority to:

  • attach a lien on a taxpayer’s property to protect the government’s ability to collect delinquent taxes,
  • apply an outright levy, which freezes cash, securities and investment accounts, and seizes whatever property the taxpayer holds for sale to pay the tax debt, including a significant portion of a taxpayer’s paycheck.

The IRS files a lien notice at the taxpayer’s local courthouse. An IRS lien is like an 800-pound gorilla: it acts as official notification that the IRS has first dibs on the taxpayer’s property. Third parties who are entangled within an IRS lien or levy — bank officers, employers, insurance brokers for permanent life insurance policies sold to the taxpayer — have absolutely no choice but to comply with IRS legal sanctions on the delinquent taxpayer.

Facing Tax Debt Realistically

Obviously, paying income taxes on time — or later with penalties — will forestall IRS liens and levies. The IRS auditor works under the premise that if the taxpayer has assets and owes taxes, and that tax debt takes precedence over any natural desire to preserve wealth.

Time Is Not On Your Side

On the other hand, for taxpayers who are in dire financial straits, there are options in getting out of tax debt. However, those options never include trying to stonewall the IRS, because time is definitely not on the taxpayer’s side.

The IRS Paper Trail

A formal notification process begins once the IRS determines that a taxpayer owes back taxes. It takes about six weeks from the first formal notification until the final notice is issued. At that point, the taxpayer has 30 days to appeal.

Once a lien or levy has been issued, the IRS has provisions to lift or remove them. Each provision has the goal of freeing up the taxpayer’s assets to make it easier to pay off the debt.

Time Payments And Offers In Compromise

An experienced attorney can apply for a time payment plan to settle delinquent tax debts in manageable monthly installment payments. The IRS favors direct bank debits, but taxpayers may also mail in paper checks or money orders.

Another option is an IRS Offer in Compromise, which, allows taxpayers to settle their delinquent tax bills by paying only a portion of what they owe. As you might imagine, there are strict eligibility requirements to qualify. The bottom line is that taxpayers must be able to demonstrate substantial financial hardship for the IRS to accept an Offer in Compromise.

Getting Professional Tax Assistance

It’s easy to become overwhelmed when attempting to navigate complex IRS regulations, voluminous and confusing instruction booklets and forms on your own. Owing money to the IRS can be a confusing and intimidating thing. It is hard to know what you’re supposed to do to settle that tax debt.

Especially if you are faced with the immediate threat of a levy, or wish to negotiate an offer of compromise, it’s wise to seek professional help. That’s where Optima Tax Relief comes in. At Optima Tax Relief, it’s our job to be in your corner, helping you to eliminate IRS tax debt.

Let Optima Tax Relief Fight For You

We actually work with the IRS and the state authorities every day on behalf of our clients, and we use our knowledge to benefit you. From day one, our experienced staff is prepared to offer representation to provide you with full legal protection while we negotiate on your behalf. Further, we are able to help you understand what you should — and shouldn’t — say to the IRS.

Your tax issues are not too big or too small for us. If you need help or have questions about preparing your tax paperwork, we can help you. If you’re facing liens, levies, wage garnishments, criminal action or other penalties, we can help you with that as well. And if you need someone to negotiate on your behalf or to represent you before auditors or revenue officers, we are prepared to do so fearlessly.

Now is the time to rely on the experience and dedication offered by Optima Tax Relief. Contact us today for more information on how you can settle your tax debt.

What Is an IRS Administrative Appeal?

courtroomIf you’ve been hit with an assessment from the IRS, for instance, as the result of an audit and you disagree with the results, you are entitled to present your case in Tax Court. However, an IRS administrative appeal may produce desirable results without the need to go to court. As a taxpayer, you are entitled to dispute the results of an IRS assessment through the administrative appeal process for any reason other than religious, moral or political, conscientious objections. The professionals at Optima Tax Relief can determine whether an administrative appeal is the right course for your situation.

IRS Administrative Appeal Categories

The IRS Appeals division operates as a separate entity from IRS offices that conduct investigations. The two types of administrative appeals available are Collections Appeal Process (CAP) or Collections Due Process (CDP) hearings. Administrative appeal hearings may be conducted by mail, telephone or in person. You may represent yourself or be represented by an accountant, attorney or individual enrolled to practice before the IRS. If your tax return was prepared by a third party who is not enrolled with the IRS, he or she may be a witness, but may not represent you.

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Submitting Your Request for Administrative Review

For assessments resulting from an audit of less than $2,500, you may approach the auditor directly or submit your request through the appeals system. Protests involving assessments of less than $25,000 may be submitted as a Small Case Request. Use Form 12203 – Request for Appeals Review, available from the IRS website, or the form referenced by your assessment. You may substitute a written statement including the items to which you disagree and your reasons for disagreement. Assessments of $25,000 or more require a Formal Written Protest including all of the following items.

  • Your name, address, and a daytime telephone number.
  • A statement of intent to appeal the IRS findings to the Office of Appeals.
  • A copy of the letter showing the proposed assessment.
  • The tax period(s) or year(s) involved.
  • A detailed description of each item with which you disagree.
  • The reason(s) for your disagreement for each item.
  • Facts supporting your position for each item.
  • Any law or legal authority that supports your position on each item.
  • The following penalties of perjury statement stated exactly: “Under the penalties of perjury, I declare that the facts stated in this protest and any accompanying documents are true, correct, and complete to the best of my knowledge and belief.”
  • Your signature beneath the penalties of perjury statement.

If your request for appeal is prepared by your representative, he or she must substitute the declaration for penalties of perjury statement for individual taxpayers with a statement that includes each of the following elements:

  • An affirmation that he or she submitted the protest and any accompanying documents, AND
  • A statement of personal knowledge of stated facts in the protest and accompanying documents and a declaration that the facts are true and correct.

Collections Appeal Processindex

CAP generally produces faster decisions than a CDP. A CAP filed to protest a wrongful levy may be filed either before or after property has been seized, but must be filed before the property is sold. Filing a request for CAP within 30 days of the rejection or termination of an installment agreement prevents the IRS from issuing or executing a levy until the appeal has been settled. However, you cannot dispute owing additional taxes through a CAP. You are also barred from proceeding to Tax Court if you disagree with the conclusions of the CAP. You must file Form 9423 – Collection Appeal Request to initiate a CAP review. CAP can be used to address the following IRS actions:

  • Prior to or after the filing of a Notice of Federal Tax Lien
  • Prior to or after levy or seizure of property by the IRS
  • Proposed or actual termination of an installment agreement
  • Rejection or modification of an installment agreement
  • Rejection of proposed trust fund recovery
  • Denial of a trust fund recovery penalty claim
  • Denial of abatement request for late payment, late filing or deposit penalties
  • Rejection of an Offer in Compromise

Collection Due Process

Unlike the CAP, a CDP hearing allows you to proceed to Tax Court if you disagree with its findings. You must file Form 12153 – Request for a Collection Due Process or Equivalent Hearing, available for download from the IRS website, or a letter containing the same information as Form 12153 to request a CDP hearing. You generally have 30 days from the date you receive your assessment or audit examination report to submit your CDP appeal. After 30 days, you may request an Equivalent Hearing, but collection activities will not be suspended. You will also not be able to request a judicial review of the results of an Equivalent Hearing; you cannot appeal the results in Tax Court. You may request a CDP or Equivalent Hearing to request a review relating to any of the processes listed below:

  • Collection proposals (e.g. installment agreements or Offers in Compromise)
  • Lien subordination (relinquishing priority claim)
  • Withdrawal of Notice of Federal Tax Lien
  • Innocent Spouse defense claims
  • Existence or amount of additional tax assessment ( ONLY if there was no notice of deficiency or other opportunity to dispute tax liability)
  • Claim of economic or other hardship resulting from collection of tax liability

IRSThe Administrative Hearing Process

After submitting your request for administrative review, you generally have at least 60 days to prepare for the hearing. Draft a rough outline of the information you wish to include in your presentation. Categorize any other relevant information in spreadsheets or in visual displays, with separate folders for each item.

It’s wise to request a copy of the auditor’s file under the Freedom of Information Act (FOIA) immediately; FOIA requests can take at least a month to process. The letter should cover all relevant tax years and provide an offer to cover copying costs. Send the letter by certified mail or other traceable means.

The hearing itself will be fairly informal. You are entitled to take notes or record the hearing if you wish. Be prepared for requests for further information. If that happens, don’t hesitate to ask for more time.

If you reach a verbal settlement during the hearing, the settlement will be transcribed onto IRS Form 870 – Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment, which can require months to show up in the mail. Double check all the figures and do not sign the form unless you understand and agree with everything contained within it. The professionals at Optima Tax Relief can address any questions you may have regarding this process.

Likewise, do not sign the form if you’ve found other mistakes by the auditor or appeals officer. Once you sign the form, you are barred from making further appeal to the Tax Court.

It’s Worth the EffortLeslie Haviland

The administrative review process can be daunting, but the odds of winning your case are very good. Investopedia reports that according to at least one edition of the book Stand Up to the IRS, published by legal portal Nolo, claims that taxpayers who appeal their audits have their assessments reduced by an average of 40 percent. With Optima Tax Relief on your side, you have a good chance of achieving favorable results, too.