IRS Collection Appeals Program & Form 9423
CAP Appeal Help
What is the Collection Appeals Program?
The IRS Collection Appeals Program (CAP) can be used to appeal IRS collection actions, such as the filing of a federal tax lien or a levy of your bank account. The CAP procedure is available for a variety of collection issues, including some cases that are not eligible for a Collection Due Process (CDP) hearing. The decision made under the CAP procedure is final, and you cannot appeal in Tax Court.
Actions the Collection Appeals Program is Available For
The CAP procedure covers most IRS actions related to tax liens, levies, and installment agreements. Consider filing a CAP appeal if you disagree with IRS actions related to any of the following issues.
Notice of Federal Tax Lien
The Notice of Federal Tax Lien (NFTL) is a public record the IRS can file when you owe back taxes. The NFTL notifies your other creditors that you owe the IRS money. It can also make it difficult to sell your home or get a loan.
You should also have CDP rights when the IRS files a notice of federal tax lien. However, the CAP procedure has more flexibility, and the taxpayer can use without receiving a notice with appeal rights. You can only request a CDP hearing once you receive a CDP notice from the IRS.
IRS Notice of Intent to Levy
If the IRS denies your request to have levied property returned to you, you can appeal this decision using the CAP procedure. You generally also have CDP rights before a levy occurs, but you need to request a CDP hearing within 30 days of receiving the Notice of Intent to Levy.
If you make your request before the levy takes place, the IRS typically won’t seize your property while your appeal is pending, unless the collection of the tax is at risk.
Installment Agreement Termination
The IRS can terminate your installment agreement if you miss a payment or violate other terms of your agreement. You can appeal this termination before or after it occurs using the CAP procedure.
The IRS can’t seize your assets until 30 days have passed after the termination of your installment agreement. If you request an appeal within these 30 days, the IRS will generally wait until the appeal is completed to issue a levy.
Installment Agreement Rejection
The IRS may reject your installment agreement request if your proposed monthly payment is too low. For example, the debt will not be paid off by the time the statutes expire. You can use the CAP procedure to appeal this decision.
The IRS won’t seize your assets until 30 days after the rejection occurs or until appeals complete their review.
The IRS can modify the terms of your payment plan if your financial situation changes. If your income increases, the IRS may ask you to pay more towards your tax debt each month. You can use the CAP procedure to appeal this decision if you don’t agree with the proposed modification or modification of your installment agreement.
Difference Between CAP and CDP
The CAP procedure can be used to appeal a wide-ranging list of IRS collection actions. For many of these actions, you can’t request a CDP hearing. However, some issues can be appealed using either the CAP procedure or a CDP hearing.
The major benefits of a CDP hearing are:
- You can appeal the decision to Tax Court.
- You can dispute the amount of your tax liability if you haven’t already had the opportunity to do so.
If you request the CAP procedure before you receive a CDP notice, you might lose the ability to appeal this decision again in a CDP hearing. Consult a tax professional if you need assistance choosing which type of IRS appeals procedure to use.
When to Request the CAP Procedure
The CAP procedure can be used in a variety of situations. If you want to appeal an IRS decision and don’t have CDP rights, the CAP procedure may be your only option.
You may want to request an appeal using the CAP procedure in any of the following circumstances:
- The IRS failed to follow correct procedures when filing an NFTL.
- The IRS filed a NFTL against alter ego or nominee property. You won’t have CDP rights in these cases.
- Your request for a lien certificate of subordination, discharge, or withdrawal was denied. Each lien certificate has its requirements, so your appeal request should explain why you meet these conditions.
- The IRS has already seized your property, and your CDP rights have expired. You may also be able to request an equivalent hearing in these cases.
- You want to appeal a proposed levy before the IRS sends a CDP notice. Be aware that you may not be able to use the CDP hearing to appeal decisions made during the CAP procedure.
- The IRS wrongfully seized your property to satisfy someone else’s tax debt. You generally have two years to request a return of the property.
- The IRS has rejected your installment agreement request because your payments are too low. Be prepared to provide detailed financial information to show why the IRS should accept your request.
- Your installment agreement is going to be terminated or modified. You may need to cure any defaults and provide financial information to support your appeal.
How to Request an Appeal Using the CAP
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You may be able to request an appeal using the CAP by phone or by submitting Form 9423, Collection Appeal Request. The way you request the CAP depends on the type of action you are appealing and what contact you have previously had with the IRS.
If Collection Action Limited to Notice in Mail or From Phone Call
First, you should call the number listed on the notice or given to you by an IRS employee. If you can’t work out a resolution with an IRS employee, you can ask to appeal their decision.
Next, the IRS employee will forward you to the Collection manager. If you don’t agree with the manager’s decision, the IRS will send your case to Appeals. You won’t have to request the appeal in writing.
If You’ve Been Contacted by a Revenue Officer
Tell the Revenue Officer you want to have a conference with the Collection manager. If you don’t agree with the manager’s decision, you can request an appeal by submitting Form 9423 to the Collection office that is handling your case. You must appeal a seizure within ten days after the IRS sends a Notice of Seizure.
You should tell the Revenue Officer or manager that you are requesting an appeal within two days of your conference so that the IRS doesn’t begin taking any enforced collection actions. You should postmark your Form 9423 within three days of your conference.
What If A Collections Manager (or Designee) Fails to Contact You?
If a manager fails to contact the taxpayer after a request for a conference within two business days, the taxpayer can submit Form 9423 or contact Collections again. If the taxpayer submits Form 9423, they must indicate their request for conference date on the form in Block 15 and state that an IRS manager did not contact them.
The taxpayer needs to ensure that the IRS receives Form 9423 within four business days (or be postmarked within four business days) of their request for the conference; otherwise, the resumption of collection activity will take place.
What About Appealing a Rejected, Modified, or Terminated Installment Agreement?
You can appeal an installment agreement rejection by sending in Form 9423 within 30 days after the date on the installment agreement rejection letter. If someone other than a Revenue Officer sent the rejection letter, you could also request your appeal over the phone by calling the number on the letter.
If you want to appeal a terminated or modified installment agreement, call the number on the notice and appeal without using Form 9423 unless the IRS assigned a revenue officer to your case. You have 30 days from the date on the intent to terminate letter to request an appeal and prevent the termination.
If the installment agreement was terminated or modified already by the IRS, you 30 days to request a tax appeal. Lastly, you appeal a proposed termination letter, and the IRS terminates the installment agreement, you can’t appeal this decision.
The IRS cannot levy a taxpayer until 30 days after the rejection or termination of an installment agreement. Levies will also not be issued during the appeals process unless the collection of the tax is at risk.
How to File Form 9423: Collection Appeal Request
Check the appropriate box on line 14 to choose the type of collection action you are appealing. Explain the reason for your appeal on line 15, and attach additional pages or supporting documents if needed.
You should send your completed Form 9423 to the collection office or Revenue Officer that took the action you are appealing. They will then forward your case to IRS Appeals.
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What to Expect After Filing Form 9423
The IRS will typically not take any enforced collection actions—such as bank levies—until the Appeals office decides on your case. However, collection actions may proceed if the IRS believes the collection of the tax is at risk.
The CAP procedure generally moves fairly quickly when compared to the CDP hearing process. Once Appeals make a final decision, Appeals will notify you of the decision.
If you need help with the CAP, the following individuals can represent you:
- Certified Public Accounts
- Enrolled Agents
- Member of your immediate family
- For a business taxpayer—any full-time employee, general partner, or bona fide officer
Contact a tax professional for assistance requesting a CAP procedure and appealing an IRS collection action.