Tax Relief Solutions

How Long does it Take to be Placed on an IRS Agreement?

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.

Dealing with the IRS can be a stressful ordeal, especially if you owe a tax liability. When attempting to set up an installment agreement with the IRS, it can take anywhere from a few hours to a few months depending on the type of agreement you’re attempting to qualify for. 

The IRS allows taxpayers to set up payment plans, such as extensions to pay and “streamlined” installment agreements. For more complicated agreements, the IRS will require that you provide financial information in order to verify whether or not you qualify.

Here are your options when attempting to get on a payment agreement with the IRS:

Request an extension. If you need more time to pay off your tax liability, the IRS allows taxpayers to request an extension for up to 120 days. The IRS will grant this extension for any tax balance amount as long as taxpayers pay their balance owed before the deadline. If the bill is not reconciled before the due date, the IRS will place the taxpayer in question back into collections. 

Set up a simple payment plan. These agreements are typically called streamline installment agreements and can be set up by a taxpayer that has a tax bill of up to $50,000. Taxpayers must pay their balance back within six years and generally the IRS does not file a tax lien. 

If you were previously set up on an agreement and defaulted, you may need to contact the IRS to set up another one and provide your current financial information.

Taxpayers that owe between $25,000 and $50,000 will be required to pay by direct debit or a payroll deduction in order to avoid a lien being filed against them. The typical time frame to set up this agreement is between 4-6 weeks.

Request a payment plan for a tax bill over $100,000 OR currently not collectible status. For those who have a tax balance over $100,000 or you’re financially strapped and unable to pay back the IRS within an 84 month period, the IRS does provide assistance. A taxpayer can request a currently not collectable status if they are in financial hardship and don’t have the ability to pay their tax liability. 

A taxpayer must submit their financials and prove that they are in a hardship in order to qualify for this agreement. The IRS typically files a tax lien for those who owe more than $10,000.

The agreement can be requested over the phone however, it can take months to complete. This is because the IRS requires a taxpayer’s most current financials as well as additional detailed information. If this agreement is requested via mail, it will typically take the IRS 1-2 months to consider your request and could even ask that a taxpayer forward more information if they deem the documentation they have on file is insufficient. 

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

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Why You Might Owe After Filing Your Taxes

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.

There are many reasons why you might owe a tax balance when it comes time to file your taxes. You may wonder how this could have happened, and you may not even be sure of what you can do to avoid the same problem next year. There are solutions to ensure you don’t accrue a liability when you file in the future; here are the five most common reasons why you might owe a tax balance and how you can prevent owing the IRS again come next tax season.

  1. You didn’t withhold enough from your pay. Double check your federal and state withholdings on your paycheck to see how much is taken out every time you get paid. The IRS offers tools for taxpayers to use when they want to adjust their withholdings but don’t know how much to take out.  
  2. Income that is not subject to withholding. If you invest in stocks, sell stocks, or even if you receive unemployment benefits, this will make your income appear to be much bigger than it actually is. This could potentially lead to you owing a tax balance when you file your taxes.
  3. Failure to make estimated tax payments. If you are self-employed/1099 earner, you typically don’t have taxes withheld from your earnings. It is up to the taxpayer to determine how much taxes they should be withholding and making these estimated tax payments to the IRS either monthly or quarterly.
  4. Filing Changes. If you’ve had big life changes within the last year such as getting married, divorced or having a dependent, it can affect your filing status and what credits/write-offs you’re eligible for.
  5. You filled out your W-4 wrong. If you just got a job or are in the middle of a job change, it’s important to carefully fill out your W-4 information. A common mistake that a taxpayer makes when filling out this form is failing to put in their correct withholding, which could lead to owing a tax balance at tax time.

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

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Is a Tax Relief Company Beneficial 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.

If you’re unable to afford paying your taxes on time and fear that the IRS will penalize you because of it, hiring a tax relief company may be the best choice for you. So what should you look for when you are exploring which tax relief company may be the best fit for you?

Here are the tax relief options you should look out for before choosing a company:

Release of Liens and Levies: Typically a tax relief company will offer a service where they will either assist in releasing any liens or levies that have been placed against you or work towards avoiding having them ever be placed on you.  Typically they can do this in two ways, one by filing your taxes to ensure that you are fully compliant with the IRS and two, negotiating a payment plan to get you out of collections. 

Payment Plan: One of the main services you should also be on the lookout for is whether or not the tax relief service offers to negotiate a payment plan with the IRS on your behalf. Typically, they will attempt to get you the best resolution possible by providing a compilation of all necessary expenses to the IRS in order to prove you are unable to pay your tax balance in full.

You can expect a payment plan to be a monthly expense that you will take on until your liability has been paid in full. 

Offer in Compromise: If you are facing true financial hardship and don’t have the means to pay back your IRS debt, then an Offer in Compromise (OIC) might be something you could possibly qualify for. If you do qualify, you could settle with the IRS for a lot less than what you owed – or the IRS might wipe all your debt away altogether. When searching for a tax relief company, inquire if they review their clients for OIC and if they do this at an additional charge.

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

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Is Working with the IRS Your Only Option?

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.

  • Taxpayers have the option to work with the IRS directly or hire a tax professional to help resolve their tax situation.
  • Working directly with the IRS to settle tax debt could prove to be extremely time intensive. 
  • A tax professional will work with the IRS on your behalf to get you compliant and to negotiate the best possible outcome for you.

If you just found out you owe a tax liability or you’ve known for some time that you’ve had an outstanding balance with the IRS and you have no idea how you’re going to pay them back, don’t freak out. There
are options the IRS provides for taxpayers to get compliant as well as tax professionals who can walk you through every step of how to get you on the right track with your tax debt. 

Should you choose to work directly with the IRS, they will require that you have filed all your taxes, including the current tax year. If you have some tax years that have yet to be filed, you may have to either file your own taxes or go to a tax preparer to file for you. Once this is complete, the IRS will request proof of your most recent income to review what payment agreement you qualify for. The IRS will then present you with options you have for a monthly payment plan. Although the IRS will review some of your expenses and consider them as a factor when deciding how high your payment plan should be, the process to see if you can get it reduced can be extensive and time-consuming.

If you decide to go with a tax firm, they will negotiate on your behalf so you don’t have to deal with the IRS. If you have unfiled tax years that need to be filed, a tax firm will typically assist you with all your unfiled years and make sure that you’re up to date with all your taxes. Once your returns are filed and your financials have been reviewed, a tax professional will usually go over payment plan options you may qualify for and explain to you why you qualify for those options. After your options have been discussed with you, a tax professional will begin negotiations with an IRS agent and will attempt to get you the best possible outcome.

If you have a tax balance that you’re looking to settle with the IRS, weigh your options. Research whether it is more feasible to negotiate with the IRS directly or to have a tax professional assist you throughout the process. Whichever you decide to go with, it will still be beneficial to you since both will get you out of collections and compliant with
the IRS.

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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You Received an IRS Notice, Now What?

As a taxpayer, one of the most frightening things you could receive in the mail is an IRS letter. Depending on the notice that you receive from the IRS, it can cause anxiety and fear, and you may even feel unsure about what your next move will be or what tax solutions may be available to you. The IRS does have tools available that taxpayers can utilize for IRS tax help, even if they received a notice that makes it unclear what their next steps would be. Below are some of the most common collection notices sent out to taxpayers every year. 


If you’ve received a CP501 notice, it means that the IRS is attempting to notify you of a past balance due. The IRS will request that you take action in order to resolve your outstanding balance. A CP502 notice also doubles as a reminder that the IRS sends about your tax balance. Typically, each notice indicates the interest and penalties that have accrued in addition to what you owe to the IRS. 

If you receive these types of notices, the IRS is letting you know of what the current balance, including interest and penalties, is owed. Once you confirm that the balance is accurate, you can either pay the balance for the tax year in question or contact the IRS to get set up on a payment plan. 


A CP504 notice is a secondary notice that the IRS will send to alert you of your tax debt if you owe a tax balance. This notice is to also notify you that they’re preparing to start collection action and to seize any tax refund you may have received. The IRS will continue their collection action against a taxpayer until their balance is paid in full. 

To avoid the IRS sending you into collections, it is important to stay compliant. You can do this by paying off your balance in full with the IRS or asking to be placed on a payment plan. It is also paramount that you continue to monitor your mail to ensure that you don’t receive any further notices from the IRS.


An LT11 is a notice to remind a taxpayer that they have an overdue payment for overdue taxes.

The IRS will send a CP90 notice if they have attempted to reach out to a taxpayer multiple times about their tax balance and have yet to receive a response. The letter states that the IRS has the intent to seize a taxpayer’s property or rights to their property if they fail to resolve their outstanding balance. 

Both these notices are a warning that the IRS will begin to take collection action against the taxpayer and it is up to the taxpayer to either continue to stay in collections with the IRS or settle their debt and get compliant. At this point in time, it is vital that you attempt to rectify the situation and get help with IRS debt by contacting them immediately to resolve your liability in addition to any interest and penalties that you have accrued.

Regardless of what notice you have received, it is important to review the notice and resolve the situation if needed. The IRS typically sends written communication to taxpayers to notify them of their tax balance and to reconcile their liability as soon as possible. If you need tax help and don’t know the first step to resolving your balance with the IRS, a tax relief company may be your best bet. A tax relief company will work with the IRS on your behalf to address your tax issues so you can be compliant moving forward.    

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.

Summer Travel Plans? Stay Protected From Identity Theft


The warm weather is finally here and with it comes the busy travel season that so many people have excitedly been anticipating. Some have been planning for months in advance, booking flights abroad and hoping to fit as many countries as they can into their itineraries.

Be cautious of being a target for identity thieves before you start to head out on your summer adventure. Travelers are an extremely attractive target for identity thieves, especially if you’re traveling to a place you’ve never ventured to before. Any locals – or scammers! – can probably pick up on this. Many travelers also rely on public Wi-Fi to look things up pertaining to their trip. Add to this the fact that you are likely carrying around more documentation than usual, and you’ve got all the makings for a sizable bull’s eye on their back.

An American Express Spending & Saving Tracker revealed that 8 in 10 Americans have summer travel plans, with 72% of these planning stateside escapes and 15% traveling overseas. No matter how you dice it, there’s going to be a lot of movement in the skies and on the roads in the coming summer months.

With millions of people packing their bags and leaving their homes for adventures, retreats and getaways, there will surely be an uptick in opportunities for identity thieves this summer. Experian’s Summer Travel and Budget survey showed that identity theft personally affects nearly one in ten travelers and that one in five people have had sensitive information lost or stolen while traveling.

Below are quick identity protection tips for each stage of your summer travels and adventures:


  • Check for any travel warnings or alerts for your destination country. The Department of State provides the latest security messages. It’s always best to be in the know about any crime – such as pick pocketing – happening in your destination country so that you can be as vigilant as possible.
  • Put only your last name and phone number on your luggage tags. Your full name and address are one too many personal details if put in the wrong hands.
  • Notify your bank and credit card companies of your travel plans. Many such companies now place freezes on accounts when they see suspicious activity like out-of-country use as a means to prevent fraud – it’s easy to avoid this inconvenience!
  • Don’t post any vacation plans on social media. It’s okay to be excited about your trip, but you don’t need to publicize it. You never know who could be lurking behind a computer screen happy to learn that your house will be unattended for a period of time.
  • Put a hold on your mail while you’re gone. An overflowing mailbox is a jackpot for an identity thief. It not only signifies that you’re away, but thieves can then steal the pieces that contain your personally identifiable information (PII).
  • Clean out your wallet and/or purse before leaving. Remove any receipts and expired cards, along with anything else you don’t absolutely need to be carrying with you. Keep only the credit and debit cards you know you will need to use while traveling. Less is more!


  • Limit your use of public Wi-Fi as much as possible. While these networks are incredibly convenient, they are very often unsecured. This means that any information you input while connected to the hotspot could be viewed by someone else. Never access your financial account or any other sites that require a password when using public Wi-Fi.
  • Use cash when possible and credit cards over debit cards. Travelers are often warned of the dangers of carrying around large amounts of cash. However, depending on where you are traveling, some merchants still practice questionable transaction processes – making cash a safer method of payment. In most cases though, using a credit card is considered safe. Furthermore, it’s almost always recommended to use the credit option of your card versus the debit option. If your card numbers ever get into the wrong hands, most credit card companies will quickly reverse or cover fraudulent charges, while recovering funds from your drained bank account can be more complicated.
  • Be cautious when using ATMs. Inspect the machine carefully before inserting your card. Fraudsters can attach card skimmers to the slot that capture your information when you insert it; very often, these look like they are part of the machine. Also, always shield the keypad when entering your PIN – scammers can also set up hidden video recorders. The safest ATMs to use are attached to banks in well-lit areas.
  • Lock up valuables and personal documents at the hotel. This includes boarding passes, confirmation emails, passports, and jewelry. Even hotel staff have been known to go through rooms while they are cleaning and steal items. Everything is much more secure in a safe!
  • Keep your phone password-protected. If you’re not the type of person to keep a password guard on your phone, make an exception while traveling. If your phone is ever lost or stolen, an identity thief could easily access banking apps and social media accounts.


  • Check your credit card and bank statements often for any fraudulent activity. It’s best to catch fraud as early as possible so that you can take action immediately. This minimizes damage and makes resolution that much easier.
  • Check your credit report throughout the year. Federal law requires the three major credit bureaus to provide you with a free credit report once a year. You can stagger these free reports every four months from each bureau so that you’re seeing your report somewhat regularly. Make sure you recognize everything that’s on there – if anything doesn’t ring a bell, look into it!
  • Change your PINs and passwords after a trip. This is especially important if you logged into any accounts while on the road or accessed an ATM. Traveling can open you up to all kinds of vulnerabilities; don’t take the risk with your PINs and passwords.
  • Make sure you properly dispose all trip confirmation emails and boarding passes. This means shredding them before tossing them into the recycling bin. These types of documents contain more information than most people think. Barcodes on boarding passes can actually contain your frequent flyer information, and other such documents reveal itineraries and other personally identifiable information that identity thieves would be happy to misuse.
  • Lastly, now is the time to post about your adventure on social media. Now that you’ve returned, you can share all those stunning snaps you shot. We really do want to hear about how much you enjoyed your vacation!

Of course, nothing compares to the peace of mind you will receive from Optima’s ID Protection Plan, which includes services like suspicious activity alerts and identity monitoring that will provide you with an extra boost of confidence when you return from a trip. Most importantly, if you do fall victim to identity theft, our 24/7 Identity Theft Resolution Service Team will work to restore your identity and prevent further damage.

Learn more and enroll in Optima’s ID Protection Plan at

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.


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.