If you don’t settle a tax debt, the IRS has systems in place to legally lay claim to your assets in order to satisfy repayment. One such method is placing a tax lien or levy on your property or other assets. To do so, the IRS must formally notify you through registered mail with proof of receipt the notice was delivered. To appeal this decision, you can fill out IRS Form 12153 to ask for a Collection Due Process hearing where you can make alternative payment plans or provide a legitimate defense against the IRS.
Below, you’ll find common questions surrounding Form 12153.
What is a tax lien versus a tax levy? What can I do about it?
- Tax lien: A tax lien can vary, but in general it means the government is making a claim against all or part of your assets because you failed to pay a tax debt on time. If a lien is placed against your home, it may have serious negative consequences, making it more difficult to refinance or sell your home. It may also damage your credit and impact your future financial health.
- Tax levy: An IRS tax levy means that the IRS can legally seize funds from your bank account or property to settle a tax debt. Once a levy has been made against your bank account, the IRS is able to take as much money as you have in the account to repay your debt. The IRS may also garnish your wages or sell your car(s) and various other assets.
- IRS Letter 3172: Notice of Federal Tax Lien File and Your Rights to a Hearing
- IRS Letter 1058: Notice of Intent to Levy and Notice of Your Right to a Hearing
What is Form 12153?
Form 12153 is an IRS document also known as a Request for a Collection Due Process or Equivalent Hearing. You can file this form in response to an IRS notice of intent to levy or notice of intent to file a lien on your assets.
What is a collection due process request hearing?
Once you receive a collection notice from the IRS, you must file Form 12153, Request for a Collection Due Process or Equivalent Hearing, within 30 days of receiving it if you plan on appealing. You may only file this appeal form for legitimate reasons, such as:
- You cannot pay back your debt due to financial hardship. (Note: the parameters to qualify for this designation are very strict.)
- You have a serious illness and medical bills prevent repayment.
- You’re living on unemployment or Social Security benefits.
- You want to formally request an alternative payment such as a payment plan.
To use the request form, follow the instructions below:
- Fill out the form with the appropriate information
- ID number
- Phone number(s)
- Best time to be contacted
- Information from your tax lien or levy notice
- Check box for innocent spouse relief, if applicable
- Otherwise, write the reason for defense against levy or lien
Once the IRS receives the form, IRS collections stop until the hearing is over. Note: You must have your Form 12153 postmarked within thirty days of the date marked on the levy or lien notice if you do not want to risk the IRS taking your assets while you wait for a hearing.
If you don’t submit the form within that 30 days, you can still ask for an equivalent hearing within a year and five days of the date on your notice. However, debt collection activities will not stop in the meantime. If the hearing determines that the levy or lien was filed in error or another agreement is reached, the IRS will cease its debt collection efforts.
What happens at a collection due process hearing?
A collection due process hearing is informal, so you won’t have to swear in and no transcripts are recorded. It occurs over the phone or in person.
The hearing decides whether or not the appeal is justified and takes into consideration pertinent details such as medical bills related to serious health issues or debts originating from a spouse or ex-spouse. At the hearing, you can argue for innocent spouse relief, which is a defense that claims your partner was the individual actually responsible for the debt.
At the end of a CDP hearing, the IRS writes a Notice of Determination which answers the following:
- Did the IRS deliver the lien or levy correctly via registered mail with a receipt?
- Will the lien or levy will be placed?
- What are the details of a payment arrangement, if one was made?
- Did the IRS accept innocent spouse relief or any other defense?
- Was relief offered?
After getting the Notice of Determination, you have exactly 30 days to appeal to the Tax Court of the US District Court.
How and where do I mail form 12153?
To find out where to send in your Official IRS Form 12153, you will need to contact the correct IRS department directly. You will find an address specified on the official IRS notice for a tax lien or levy. Before submitting the form, it’s imperative you contact the specified IRS department to confirm who you should address the request form to. You may also want to request a copy of the department’s fax number so you can fax the application as well.’
For help with your tax resolution, contact a member of the Community Tax team who can help settle your outstanding IRS debt.