Understanding IRS Collections
When taxpayers fail to pay outstanding tax debt, the IRS can take serious collection actions, including:
Wage garnishments – The IRS deducts a portion of your paycheck.
Bank levies – The IRS seizes funds from your bank account.
Tax liens – A legal claim on your property that affects your credit.
If you receive an IRS collection notice, act quickly to protect your income and assets.
How IRS Appeals Can Stop Collections
If you disagree with an IRS collection action or need time to resolve your tax debt, you may qualify for an appeal. The two main options are:
1. Collection Due Process (CDP) Appeal
A CDP appeal allows taxpayers to challenge an IRS collection action before it proceeds.
When to File a CDP Appeal:
You received a Final Notice of Intent to Levy (LT11 or CP90).
The IRS issued a Notice of Federal Tax Lien (NFTL).
You want to dispute the tax debt or propose an alternative resolution (installment agreement, offer in compromise, etc.).
Benefits of a CDP Appeal:
Pauses collections while the IRS reviews your case.
Corrects IRS errors that may lead to improper liens or levies.
Allows for negotiations like installment agreements or hardship status.
To request a CDP hearing, file Form 12153 within 30 days of receiving the collection notice.
2. Collection Appeals Program (CAP)
A CAP appeal is a faster way to challenge IRS collection actions but does not provide a court hearing.
When to File a CAP Appeal:
The IRS has seized or is about to levy your wages or bank account.
Your installment agreement was denied or terminated.
You believe a tax lien or levy was wrongly enforced.
Benefits of a CAP Appeal:
Faster resolution – typically reviewed within days.
Stops certain collection actions immediately during review.
Can be filed before or after a levy to challenge IRS decisions proactively.
To request a CAP appeal, file Form 9423 as soon as you receive a levy notice.
How to Strengthen Your IRS Appeal
To increase your chances of a successful appeal:
Review IRS notices and verify deadlines.
Gather financial documents (bank statements, tax returns, pay stubs).
Ensure compliance by filing past tax returns and making current payments.
Consider alternative resolutions, such as installment plans.
Seek professional help from a tax attorney or enrolled agent.
Other Ways to Stop IRS Collections
If an appeal isn’t an option, consider:
Installment Agreement – Set up a monthly IRS payment plan.
Currently Not Collectible (CNC) Status – Pause collections if facing financial hardship.
Offer in Compromise (OIC) – Settle tax debt for less than the full amount.
Penalty Abatement – Reduce penalties for valid reasons (e.g., medical emergencies).
Take Action Before It’s Too Late
If you’re facing IRS collections, act quickly. CDP and CAP appeals can help pause collection efforts and negotiate a better resolution, but they are time-sensitive.
Whether you appeal, set up an installment plan, or seek penalty relief, knowing your options can protect your income and assets. If you’re unsure about the best approach, consult a qualified tax professional to stop collections and find a long-term solution.
Book a free consultation with a Guardian Tax Professional today to get clear answers to your unique situation.
