Collection Appeals Program (CAP)
The Collection Appeals Program (CAP) is most appropriate for those dealing with a proposed levy, filing of a Notice of Federal Tax Lien, or seizure of property. The CAP process can also be used when there is a rejection, termination, or modification of an installment agreement.
If your only contact with the IRS has been a notice or telephone call, you need to call the IRS with the number shown on the notice. Explain why you disagree and want to appeal. Then offer a solution to the issue.
Collection Due Process (CDP)
During a Collection Due Process (CDP) hearing, the Office of Appeals must consider if the IRS followed all required procedures when looking at your case. Also, the CDP will determine if the proposed collection action is appropriate or if there are better alternatives.
- Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320
- Final Notice–Notices of Intent to Levy and Notice of Your Right to a Hearing
- Notice of Levy on Your State Tax Refund–Notice of Your Right to a Hearing
- Notice of Jeopardy Levy and Right to Appeal
- Post Levy Collection Due Process (CDP) Notice
Once you receive one of the above mentioned notices, you have 30 days to request a CDP hearing. Complete Form 12153, Request for a Collection Due Process or Equivalent Hearing. Send the form to the SAME address shown on your CDP notice.
If you sent the appeals request within 30 days of receiving your notice:
- The IRS levy action is usually suspended against you for the tax periods you appealed.
- You are entitled to an Office of Appeals hearing AND judicial review with the Tax Court.
If you sent the appeals request after 30 days of receiving your notice:
- You are entitled to request a CDP Equivalent Hearing with the Office of Appeals within
the 1 year period described in the form you sent.
- You will NOT have a right to a judicial review by the Tax Court.
Offer in Compromise (OIC)
An Offer in Compromise (OIC) is an agreement between you and the government that settles your tax liability payment for less than is owed. OICs are generally for individuals who cannot pay back their full tax liability without significant financial hardship.
OIC Appeal Procedures
If you received a letter that your OIC was rejected, you have 30 days from the date on the letter to request an appeal. You can request an appeal by preparing a Form 13711, Request for Appeal of Offer in Compromise. Mail the letter to the office that sent you the rejection letter. The determination of this appeal is not reviewable by the courts.
Trust Fund Recovery Penalty (TFRP)
A Trust Fund Recovery Penalty (TFRP) applies to individuals responsible for collecting, withholding, accounting, or paying specified taxes but failing to do so. These taxes can include non-resident alien (NRA) withholdings as well as employment and excise taxes.
Individuals that could be held personally liable for a TFRP (the full amount of the tax not paid plus interest) include:
- Sole proprietors
- Owner or officers of a corporation
- Partner of a business
- Employees of any form of business
TFRP Appeal Procedures
Here are the steps to take when preparing your formal written protest or small case request:
- Enclose a copy of the notice you received–Letter 1153, Proposed Trust Fund Recovery Penalty Notification.
- Explain why you don’t think you are responsible for the unpaid taxes or why you disagree with the amount.
- Clearly describe your duties and responsibilities regarding this issue.
- Cite the law or authority, if applicable, to support your position.
- Send the letter to the IRS officer listed on the Letter 1153 you received.
To be clear, you can appeal your IRS tax issue on your own.