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.
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.
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.
The CAP procedure can also be used when the IRS denies your request for a lien withdrawal, discharge, or subordination.
The Notice of Intent to Levy informs you that the IRS is about to seize your property. You can use the CAP procedure before or after the IRS levies your property or garnishes your wages.
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.
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.
The IRS may reject your installment agreement request if your proposed monthly payment is too low. For example, the liability 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 taxes owed 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.
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:
Neither of these benefits applies to the CAP procedure. However, the CAP procedure may result in a faster resolution of your case.
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.
You may want to request an appeal using the CAP procedure in any of the following circumstances:
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.
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.
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.
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.
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.
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.
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:
Contact a tax professional for assistance requesting a CAP procedure and appealing an IRS collection action.