The following information on relevant IRS Forms and Publications has been provided by the Office of the National Taxpayer Advocate ("NTA") to assist those seeking information on IRS collection procedures and taxpayer options. All linked documents cited are also listed at http://www.irs.gov in various formats. Please read the documents in full and do not rely on the summaries. Because of the serious nature of the IRS collection process, we highly recommend that you secure the advice of a qualified professional, and that you become informed and aware of the deadlines outlined in these publications. If you have questions, please contact a professional or your local taxpayer advocate. Keep in mind that the NTA’s mission is to ensure that your tax problems are promptly and fairly handled. They do not abate collection actions if such actions have taken place within established systems and procedures.
Information on the Collection Process
Useful Publications and Forms
Publication 1 — "Your Rights as a Taxpayer." Included in this Publication is the Declaration of Taxpayer Rights. (http://ftp.fedworld.gov/pub/irs-pdf/p1.pdf)
- Protection of Your Rights—IRS employees are required to explain and protect your rights throughout your contact with us.
- Privacy and Confidentiality—Any information given to the IRS cannot be disclosed except as authorized by law. You have the right to question as to why the IRS is requesting information, how it will be used and what will happen if you do not provide the information.
- Professional and Courteous Service—If you feel that you are not being treated as you should be, you have the right to speak with the employee’s supervisor. If their response is not to your satisfaction you should write to the head of office.
- Representation—You have the option of representing yourself or, with the proper written authorization, have someone else to represent you. This individual must be a person allowed to practice before the IRS. If during an interview you feel that you need representation, the interview must be stopped and rescheduled in most cases.
- Payment of Only the Correct Amount of Tax—You are only required to pay the correct amount of taxes due. If you are unable to pay the tax you may be eligible for other options such as Offer In Compromise, Installment Agreements or deferred payments.
- Help With Unresolved Tax Problems—If you have been unsuccessful with resolving a problem with the IRS, the Taxpayer Advocate Service can provide assistance. There is a local Taxpayer Advocate Office in each state. The toll free number is: 1-877-777-4778.
- Appeals and Judicial Review—If you have a disagreement with the amount of tax due or certain collection actions you have the right to ask for the Appeals Office to review your case. You may also take your case to court.
- Relief From Certain Penalties and Interest—Under certain circumstances the IRS will waive penalties. Interest will be waived if there is a delay or error caused by an IRS employee.
Publication 594—The IRS Collection Process tells you the steps the IRS may take to collect overdue taxes. It also includes a summary of your rights and responsibilities concerning paying your federal taxes. (http://ftp.fedworld.gov/pub/irs-pdf/p594.pdf)
If you do not pay your taxes in full and do not contact the IRS to let us know why, the law requires us to take collection action. A lien may be filed to notify your creditors that we have a claim against all your property. The IRS may also seize or sell real or personal property with a levy. This publication explains when and how a lien or a levy is filed, what notice to you is required, how to appeal the filing of a lien or levy and possible methods of releasing a lien or levy on your property.
- What to do when you can’t pay your taxes. If you cannot pay all that you owe, tell us why you cannot. We may be able to arrange an installment agreement, an Offer in Compromise ("OIC") or, based on certain situations, a delay in collection. This publication provides further information on all three options.
- The Taxpayer Advocate Service can help you if you have tried unsuccessfully to resolve a problem with the IRS. You may call toll free 1-877-777-4778or complete Form 911 for this purpose. (
Publication 1660—Collection Appeal Rights. This Publication covers the two main procedures for appealing IRS collection actions. Collection Due Process (CDP) and the Collection Appeals Program (CAP) (http://ftp.fedworld.gov/pub/irs-pdf/p1660.pdf)
- Collection Due Process ("CDP") You have the right to a CDP hearing by the IRS Office of Appeals for these collections actions: the first time a Notice of Federal Tax Lien is filed on a tax period; before we send the first levy on your property for a tax period; when we levy your state refund; and when we issue a jeopardy levy. We have to notify you with 5 days after the lien notice filing and you must request a hearing within 30 days. We are required to notify you when we intend to file a levy. We can’t levy or seize your property within 30 days from the date of the notice is mailed, but you may request a hearing during that time. There are two exceptions to the notice requirement: when we believe collection of the tax is in jeopardy or when you are receiving a state tax refund. Procedures and form for requesting a hearing are outlined in the publication, as well as procedures to preserve your right to go to court if you disagree with the Office of Appeals.
- Collection Appeals Program ("CAP") This procedure is available under more circumstances than the CDP procedure, but you may not proceed to court if you don’t agree with the Office of Appeals decision in your CAP case. You may appeal before or after a) Notice of Federal Tax Lien, b) Notice of Levy, c) Seizure of Property, or you may appeal when you are notified that the IRS intends to deny you an installment agreement. The publication outlines the procedures and timing requirements of such an appeal. Normally we stop collection action when your case is appealed, unless we believe the collection of the tax is at risk. The decision of the CAP is binding on both you and the IRS.
- You may also appeal other Collection actions such as denied OIC’s or denied requests for abatement of penalties. See Publication 5 on how to protest the IRS findings. (
Form 656—Offer in Compromise. (http://ftp.fedworld.gov/pub/irs-pdf/f656.pdf). The IRS has the authority to settle, or compromise, federal tax liabilities by taking less than full payment under certain circumstances, as follows. (Complete instructions and explanation are included in the publication.) We will withhold collection activities while we consider your offer unless we find any indication that you submitted your offer to delay collection.
- Doubt as to liability. Doubt exists that the assessed tax is correct.
- Doubt as to collectibility. Doubt exists that you could ever pay the full amount of the tax owed.
- Promote effective tax administration. There is no doubt that the tax owed is correct and no doubt that the amount owed could be collected, but an exceptional circumstance exists that allows us to consider your offer. To be eligible for compromise on this basis, you must demonstrate that collection of the tax would create an economic hardship or would be unfair and inequitable.