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Answering Collection FAQs with Joshua D. Brinen

A 2848 or a power of attorney form for the Internal Revenue Service is the first document that representation needs to file with the Internal Revenue Service in order to represent you before the service. It gives your representative power to represent you before the IRS and to take certain actions on your behalf. The 2848 is limited to the types of tax or penalties, as well as specific forms. You may need to file several 2848s depending on your situation. And IRS agent will not speak with your representative if a 2848 is not on file.

What is a Lien?

An IRS lien is a notice to the world that is filed with the courthouse that you owe the IRS money. You might get upset or concerned that the IS has filed a lien against you. However, keep in mind it is just a notice document. They cannot take your money if only a lien is filed. While having a lien against you is never good, it is not the same thing as a levy. In fact, the IRS has an unfiled lien against each and every taxpayer within the United States for taxes that will be due next year. However, as a rule, the IRS does not file on those liens until those taxes are delinquent.

What is a Levy?

If a lien is notice of a debt owed, a levy is notice that the IRS is going to take action. How does the IRS take action? They levy your bank accounts and ask the bank or brokerage house or other financial institution to turn over the funds in satisfaction of your IRS debt. A levy is far more serious than a lien. And while I do not recommend you not taking action when you get a notice of lien, you most certainly must take action when there is a notice of levy. The IRS should not take funds from a bank account unless you have received or they have tried to deliver in good faith a notice of levy.

Upon the receipt of a notice of lien or a notice of levy or other action taken by the Internal Revenue Service against you the taxpayer, if there is a good faith basis to challenge the collection action, you may file a collection due process request. A collection due process request asks the IRS to move the discussion of a specific matter to a neutral third party working within the Internal Revenue Service. Several years ago, the Internal Revenue Service instituted an Office of Independent Appeals. This office is not involved in the tax controversy until a collection due process request is issued and documents are submitted to the Internal Revenue Service to prove that the actions taken by the IRS agent or revenue officer are either improper or that there is a better, more efficient way for the IRS to recoup its taxes. A collection due process request, if denied, can be appealed to the United States Tax Court.

What is a Collection Due Process Request?

A collection due process request must be made within 30 days of receipt of a lien or levy notice. There is a very, very tight timeframe to file with the Internal Revenue Service to have the Office of Independent Appeals review your concern with the collection action. The IRS does afford you the opportunity to a equivalency hearing. An equivalency hearing is basically the same hearing as a collection due process hearing with one small difference. A collection due process hearing can be appealed to the US Tax Court. An equivalency hearing cannot be appealed to the United States Tax Court.

What is a Collection Appeal Process Request?

Similar to a collection due process request, a collection appeal process request can appeal to the Office of Independent Appeals collection actions that need to be resolved. It is markedly different than the collection due process request as it has a much less stringent timeframe.

What is a Collection Statute Expiration Date?

The collection statute expiration date, or CSED, is the date after which the IRS cannot collect taxes against you. The CSED is generally 10 years. However, taking certain actions to resolve your tax controversy can extend or stay or pause the expiration of the collection statute expiration date. Such actions that can pause or toll that time are filing an offer and compromise, filing a collection due process request, filing a request for an equivalency, or filing a collection appeal process request.

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