What is Collections Due Process?

If you owe money to the IRS, after some time and a certain amount of notices, they will begin to initiate collection activities. This means they will look to reclaim the outstanding dues from either you or your business, depending on which owes the IRS money. Usually, the way the IRS attempts to collect this money from individuals is by one of two methods, either by filing a bank levy, or by using the Notice of Federal Tax Lien (NFTL). If you disagree with the amount owed and want to dispute it, a Collection Due Process hearing is your opportunity to do so.

But you have to act fast! 

In this blog post, we’ll discuss what collection due process is, how to file for it and how long you have to do so. If you’re looking for more information about tax relief options, our previous blog posts discuss all things related to employment tax, from what it is and how it’s different from self-employment tax, to some of the penalties associated, like trust fund penalties. 

Collection Due Process

As of November 16, 2020, according to the IRS page, Collection Due Process (CDP) FAQs, a Collection Due Process is a hearing during which you have “an opportunity to discuss alternatives to enforced collection and permits you to dispute the amount you owe if you have not had a prior opportunity to do so.” This hearing will be before an impartial member of the IRS and is your legal right under the IRS Code Section 6320. However, there are some requirements when it comes to requesting and receiving this Collection Due Process hearing. 

When to Request a Collection Due Process Hearing

According to the same IRS Page, “You have 30 days from receipt of an LT11 or L-1058 to request a Collection Due Process (CDP) hearing” and “you should request a CDP hearing using Form 12153 if you feel the levy is inappropriate.”

• LT11 – The LT11 is a letter from the IRS issuing a “Notice of Intent to Levy and Notice of Your Right to a Hearing.” This means that they are formally beginning the collection activities against you and you officially have 30 days to request the Collection Due Process hearing to dispute the claims.
• L-1058 – As of November 17, 2020, according the IRS Page, Understanding Your LT11 Notice or Letter 1058, the L-1058, as well as the LT11 are both ways of communicating that the IRS has not “received your payment for overdue taxes [and they] intend to seize your property or rights to property.” 

How to Request a Collection Due Process Hearing

As mentioned in the previous section, to request a Collection Due Process hearing, you must file Form 12153 with the IRS. Typically, this is sent to the address given in either the LT11 or L-1058, but you can also call the IRS in an attempt to verify where you should send Form 12153 to.

When it comes to something as serious as a Collection Due Process hearing and the potential levies and collection activities taken against you by the IRS, it’s always best to seek professional assistance. If you’re considering requesting a CDP, check out our Collection Due Process page for more information, or contact the team at Bullseye Tax Relief today.

Sources:

https://www.irs.gov/appeals/collection-due-process-cdp-faqs

https://www.irs.gov/pub/notices/lt11_english.pdf

https://www.irs.gov/individuals/understanding-your-lt11-notice-or-letter-1058