- 1 Form 9423: IRS Collection Appeal (CAP)
- 2 Taxpayer Background (Form 9423: Step 1)
- 3 Collection Action Appealed (Form 9423: Step 2)
- 4 Explanation (Form 9423: Step 3)
- 5 Penalty of Perjury
- 6 What Happens Next with the Collection Appeal?
- 7 Collection Appeal Process (CAP) Has Pros and Cons
- 8 Golding & Golding: About our International Tax Law Firm
Form 9423: IRS Collection Appeal (CAP)
Form 9423: After an IRS tax and/or penalty has been issued/assessed — and is still unpaid — the IRS will begin enforcement procedures. This is true, even if the penalty is being evaluated or considered at the IRS Office of Appeals. In other words, since the tax or penalty is still outstanding, the IRS will continue to seek to enforce the amount due. In order to try to eliminate the enforcement or at least modify the procedures the IRS is using, a taxpayer may be able to file an IRS Form 9423 — which is a Collection Appeal Request. We will explain the basics of the Collection Appeal Request (CAP), but one thing to consider from the outset is that if a taxpayer selects the CAP process then it may prevent or limit them from pursuing the Collection Due Process (CDP) at a later time on the same issue (although sometimes informal workarounds are possible).
Taxpayer Background (Form 9423: Step 1)
The first part of the form preparation involves the taxpayer providing personal information such as:
- Representatives Name And 2848 POA
- Telephone Numbers
- Street Address
- City, State, Zip Code
- Type of Tax
- Tax Period Being Appealed
- Tax Amount Due
Collection Action Appealed (Form 9423: Step 2)
The idea behind form 9423 Collection Appeal Request is as an opportunity halt (and modify) an IRS collection that is currently in process. Therefore, the IRS wants the taxpayer to identify the reason for filing the form 9423.
The Taxpayer must identify the action at issue:
- Federal Tax Lien
- Levy or Proposed Levy
- Rejection of Installment Agreement
- Termination of Installment Agreement
- Modification of Installment Agreement
Explanation (Form 9423: Step 3)
The purpose of the explanation portion is to give the taxpayer an opportunity to explain why the collection appeal request is proper — and more specifically the basis for modifying the enforcement procedures being used by the IRS currently for the particular debt.
Specifically, the form asked the taxpayer to:
Explain why you disagree with the collection action(s) you checked above and explain how you would resolve your tax problem. Attach additional pages if needed. Attach copies of any documents that you think will support your position.
Generally, the Internal Revenue Service Independent Office of Appeals will ask the Collection Function to review, verify and provide their opinion on any new information you submit. We will share their comments with you and give you the opportunity to respond
Penalty of Perjury
Before submitting the form, the Taxpayer must submit the form under penalty of perjury. since it is being signed under penalty of perjury, it is important that the taxpayer is not making any intentional or reckless untruthful statements — omissions or misrepresentations.
Under penalties of perjury, I declare that I have examined this request and any accompanying documents, and to the best of my knowledge and belief, they are true, correct and complete.
A submission by a representative, other than the taxpayer, is based on all information of which the representative has any knowledge.
What Happens Next with the Collection Appeal?
Once it is filed, it is in the hands of appeals to determine the fate of your request. as provided by the form instructions:
What Will Happen When You Appeal Your Case
Normally, we will stop the collection action(s) you disagree with until your appeal is settled, unless we have reason to believe that collection or the amount owed is at risk.
You May Have a Representative
You may represent yourself at your Appeals conference or you may be represented by an attorney, certified public accountant or a person enrolled to practice before the IRS. If you want your representative to appear without you, you must provide a properly completed Form 2848, Power of Attorney and Declaration of Representative.
You can obtain Form 2848 from your local IRS office, by calling 1-800-829-3676, or by going to www.irs.gov.
Decision on the Appeal
Once Appeals makes a decision regarding your case, that decision is binding on both you and the IRS. You cannot obtain a judicial review of Appeals’ decision following a CAP.
However, there may be other opportunities to obtain administrative or judicial review of the issue raised in the CAP hearing
For example, a third party may contest a wrongful levy by filing an action in district court. See Publication 4528, Making an Administrative Wrongful Levy Claim Under Internal Revenue Code (IRC) Section 6343(b).
Collection Appeal Process (CAP) Has Pros and Cons
In conclusion, for some Taxpayers the filing an IRS Form 9423 is an effective method for avoiding or modifying the enforcement of the collection certain taxes that are due and owing. In addition, wall falling in the form may be beneficial, there are some inherent detriments including the impact on filing a CDP request on Form 12153.
Golding & Golding: About our International Tax Law Firm
Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure and compliance.
Contact our firm today for assistance.