IRS Admits That its Collection Due Process Program Has Deficiencies

Posted on January 20, 2015

Treasury Inspector General for Tax Administration

The Treasury Inspector General for Tax Administration recently conducted an audit of the IRS’ Collection Due Process program.

What is Collection Due Process?
A taxpayer can request a collection due process (CDP) or equivalent hearing on IRS Form 12153 if s/he has received IRS notice of a Federal Tax Lien or Intent to Levy. This CDP hearing is the taxpayer’s last and best chance to resolve tax discrepencies and controversy without tax litigation. Post CDP, the taxpayer can request an Installment Agreement or a Offer in Compromise (OIC).

Although the Treasury Inspector General’s audit was statutorily required, the Treasury Inspector General found deficiencies in the IRS Collection Due Process program. The Inspector General discovered that IRS Appeals improperly classified cases which resulted in taxpayers receiving the wrong type of hearing.

The IRS also failed to properly calculate the collection statute expiration date and the hearing officers did not always document their impartiality as required by law.

The Inspector General made written recommendations to the IRS for changes in the Collection Due Process program. However, it remains to be seen whether the IRS will accept these recommended changes and improve the Collection Due Process Program.

Do you have a Collection Due Process Appeal pending before the IRS?

Call us, we can help.