The Truth Behind Collection Due Process (CDP)
The IRS restructuring act added Section 6320 of the U.S. Tax Code. It gives you the right to request a hearing when the IRS has filed a tax lien against you or has issued you a notice that it intends to file a levy. As an expert in the field, Christopher G Carmona CPA, APC, wants to help you understand the truth behind how a Collection Due Process (CDP) hearing works.
Purpose of a CDP hearing
A CDP hearing allows taxpayers and their representatives the opportunity to present collection alternatives to the settlement officer that include installment agreements, proposing an offer in compromise that would settle the issue for less than you currently owe, or requesting currently not collectible status. If the taxpayers have a CDP (Collection Due Process) hearing, they are able to raise the underlying liability. However, they must do it at the first opportunity. What this means is that the taxpayer must raise the issue of the liability when they are allowed their first CDP hearing, whether that notice is for the threat to levy or the filing of the NFTL (Notice of Federal Tax Liens). The taxpayers can raise the issue when they file Form 12153 by checking “Other” at the bottom of Box 8 and writing in the explanation that they don’t believe they owe the money the IRS believes they do. When the taxpayers do hear back from Appeals, they should submit their documentation to the Settlement Officer for consideration and attempt to have the liability reduced.
Takeaway
Filing a request for a CDP hearing forces the IRS to suspend its collection efforts against you. Suspending IRS collection efforts gives you the time to gather the documentation you need to offer an alternative for collecting the tax due if you believe that an offer in compromise would benefit the IRS more than simply seizing your assets.
If you’ve received an IRS letter, or other tax correspondence from the IRS, a state agency, or a local agency, it can be difficult to know what to do next. I, Christopher G Carmona CPA, APC, represent clients who owe IRS penalties, interest, and taxes. I offer my services across Diamond Bar, Los Angeles, Oceanside, Orange County, Riverside County, San Diego County, and the surrounding areas.
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If you are looking for a CPA firm in Diamond Bar, CA, reach out to me by calling me on my toll-free numbers
(800) 227-2891 or (323) 707-6148, or send me an email at Christopher@SettleMyTaxDebts.com or ChristopherCarmona@hotmail.com.
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