Earlier this week, I posted a blog entry about how important it is to read your mail from the IRS because it can stop any impending levies. Also, ignoring the IRS notices can cause your tax rights to expire and get into more trouble with the government. This post is a follow-up to that earlier post by explaining the Form 12153 that you must submit to properly exercise your appeal rights and to stop that levy!
Whenever the IRS sends the Notice of Intent to Levy and Notice of Your Rights to a Hearing, it usually includes a copy of the Form 12153 for taxpayers to request a Collection Due Process hearing. If a copy of Form 12153 is not included, then taxpayers can get the latest version from the IRS website here.
By filing the Form 12153, Collection Due Process Request, the following will happen:
- The IRS ceases all collection action against the taxpayer for the tax periods at issue. This includes levies!
- The taxpayer’s case is forwarded to Appeals
- The taxpayer has the right to go to the Tax Court if the taxpayer cannot work out an arrangement with Appeals; and more importantly
- The taxpayer has additional time to prepare any missing returns and sort out the proposal for resolving the outstanding tax debt.
Form 12153 is a two-page form and here is the top of the first page:
I purposefully added the “A” box around this part of the form because it is important to mail Form 12153 to the right IRS address to have your Collection Due Process request be timely. Here is a great article on the Procedurally Taxing blog on how issues arise when Form 12153 is not mailed to the right place.
The bottom half of the first page is straightforward and is shown below:
In Boxes 1-5, you fill out names, address, phone numbers, types of tax, tax form number, and tax periods related to the IRS Lien or IRS Levy. If you are unsure what taxes you can put under Box 5 of the Form 12153, you can refer to your levy notice or lien notice. Seek professional help if you are unsure what tax information to put on this part.
There is quite a bit to cover on the second page and I will go over the boxes and the highlights in turn. Now onto the second page:
Box 6 asks to mark the basis of the hearing request and you can mark both boxes if you received both a notice of lien and a notice of levy.
Box 7 asks if you would like an equivalent hearing. I also highlighted this area “B” because it is important to highlight that an equivalent hearing is different from a collection due process hearing. Unlike the 30-day window for a collection due process hearing request, you have a full year from the notice date to make the equivalent hearing request. However, collection activity continues in an equivalent hearing request and you cannot appeal to Tax Court.
Collection due process hearings are much more favorable so get the request in within 30 days of the notice!
Box 8 allows you to select a collection alternative, highlighted under “C”. You can pick all three alternatives to let the IRS know that you are keeping all your options open. Box 8 also allows you to appeal the lien or request innocent spouse relief. Both will be explained in further detail in future blog posts.
If you disagree with the underlying tax, you can mark “Other” and fill out the explanation section, highlighted under “D”. Take advantage here to dispute the tax and after Form 12153 is received, the Settlement Officer will ask for the documentation to support reducing your tax liability.
Finally, sign the Form 12153 and have your tax professional sign the form if you have one. It will take some time after mailing the Form 12153 for your case to be assigned to a Settlement Officer. In the meantime, you need to get your documents together but at least you now have some breathing room since collection activities like levies have been stopped.
If you or someone you know needs help with requesting an appeal hearing or have questions about an IRS notice, please feel free to contact me at either (404) 747-7073, or by email at [email protected].
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