Challenging IRS decisions requires timely filing of appeals at each step. Missing a deadline interrupts the appeals process, forfeiting your right to contest the IRS action all the way to the Tax Court.

Filing appeals has several advantages. Appeals officers can settle cases more flexibly than revenue officers. Additionally, enforced collection activities like levies and wage garnishments are suspended during the appeal process, giving you an opportunity to resolve the case and address multiple issues simultaneously.

Before the IRS imposes levies on a tax debt, you will receive two letters. The first, CP504, demands payment or threatens asset seizure but does not offer appeal rights. Within 30 days, you must contact the IRS to arrange full payment, set up an installment agreement, or explore other collection options such as Offer in Compromise, Penalty Abatement, or Innocent Spouse relief.

The second letter, Letter 1058, Final Notice of Intent to Levy, informs you of the IRS’s intent to seize assets and details your appeal rights. It includes a Collection Due Process (CDP) hearing request form that must be completed and submitted to the IRS within 30 days.

Completing the CDP form notifies the IRS of your appeal. Include your personal details, the tax periods being appealed, and whether the information is handwritten or electronically typed. Submit the form along with a copy of the final notice letter to ensure the appeals office receives the necessary documentation.

The letter you are appealing (Final Notice of Intent to Levy) contains the information required to complete the CDP form. Typically, the letter lists the tax periods subject to the final notice, levy, and subsequent appeal. Indicate whether the letter pertains to a levy or a lien, and ensure the listed periods match those in the final notice letter. Remember to sign the appeal and file it within the designated timeframe.

To prepare for the hearing, compile a list of issues you want to discuss with the appeals officer, such as installment agreements, offers in compromise, penalty abatement, innocent spouse relief, and any other relevant matters. Gather all completed forms and supporting documents necessary for a thorough discussion of your case’s background facts. Start assembling this information promptly to allow sufficient time before the scheduled hearing or settlement conference.

If you are dissatisfied with the hearing’s outcome, you can appeal to the Tax Court, followed by the US Court of Appeals, and ultimately the US Supreme Court. Although this can be an expensive and time-consuming process, having these options provides negotiating power, known as the threat of litigation. However, it’s important to note that during the appeals process, the statute of limitations is tolled, meaning it stops running or expiring.