Disputing IRS Tax Collections: It Can Be Done & You Do Have Options
UPDATED: December 12, 2019
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Can you fight the Internal Revenue Service (IRS) if you believe that you don't owe what the IRS claims? Absolutely, encourages Justin Hein, Managing Attorney for Roni Deutch, a Professional Tax Corporation – a law firm that has been resolving IRS tax debts for American taxpayers for nearly 20 years. Hein says that you not only have the ability to dispute the collection action being proposed by the IRS, but that you also have several options for resolving your IRS tax debt.
As part of the tax collection process, the IRS is required to send taxpayers a series of letters. The final letter states that if the IRS tax debt isn’t paid in the next 30 days, the IRS has the right to take collection actions such as a bank levy or wage garnishment.
If you don’t agree with the amount the IRS says you owe, you can dispute tax liability with the IRS department of appeals. This is known as a public collection due process hearing. Hein cautions that most of the time, the individual actually does owe the money that the IRS claims they owe and the IRS has met all of its procedural requirements. If this is the case, the individual must resolve their IRS tax debt through one of the options available.
Resolving IRS back taxes
Hein describes several options available to taxpayers seeking to resolve IRS tax debts:
- Installment Agreement. This is a way for a taxpayer to pay their IRS tax debt over a period of time through monthly payments or installments. Most Installment Agreements are monthly payments based on an individual’s ability to pay.
- Currently Not Collectible Status. If you can prove to the IRS that you have no ability to pay your IRS tax debt, you may be eligible for placement into Currently Not Collectible status, which means that the IRS cannot attempt to collect on your IRS tax debt unless your financial situation significantly changes. You will continue to accrue penalties and interest while your IRS tax debt is in Currently Not Collectible status. However, you will end up owing nothing to the IRS if you remain in Currently Not Collectible status until the time for it to collect on your IRS tax debt expires.
- Offer in Compromise. In this settlement program, the IRS will settle IRS tax debt for an amount less than what the taxpayer owes. The IRS requires an in-depth, complicated analysis for this program, in which the taxpayer must prove that there is no way he or she will be able to pay their IRS debt before the time for the IRS to collect expires.