How to Stop IRS Collections with IRS Form 9423: Collection Appeal Request

IRS Form 9423 lets you put IRS collections on hold. Even if you owe the IRS money, they have to respect your due process rights. Form 9423 lets you appeal when the IRS didn’t properly follow the collections process.

This post is provided for general information only. Please confirm the details and circumstances of your unique situation with your tax accountant or other appropriate advisor before taking action.

What is IRS Form 9423: Collection Appeal Request?

IRS Form 9423 is a way to challenge the IRS collections process. For example, you might have gotten a notice to terminate your installment agreement or been denied an installment agreement altogether. Another common situation is when the IRS sends a notice of intent to levy your assets.

If the IRS doesn’t follow their own due process rules and takes a collection action when they shouldn’t, a Collection Appeal Request asks someone higher up to take another look and stop the wrongful action. This is known in the IRS as the Collection Appeal Program (CAP).

Here is a sample of Form 9423.

When can you file a Collection Appeal Request?

The following IRS collections actions can be appealed with IRS Form 9423.

  • Notice of a federal tax lien that has been filed or will be filed.
  • Wage garnishments where the IRS is having your employer deduct money from your paycheck or has sent you a notice of their intent to do so.
  • Bank account levies or garnishments where the IRS has or will take money out of your bank account.
  • Property levies such as the IRS taking or threatening to take your car or other assets.
  • Refusing to release liens when warranted.
  • Denials, terminations, or changes to installment agreements.

What is the difference between Collection Due Process (CDP) and Collection Appeals Program (CAP)?

Both CDP and CAP are independent parts of the IRS from the collection office that initiated collections against you.

Collection Due Process (CDP) is available if you receive one of the following notices:

  • Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320
  • Final Notice – Notice of Intent to Levy and Notice of Your Right to a Hearing
  • Notice of Jeopardy Levy and Right of Appeal
  • Notice of Levy on Your State Tax Refund – Notice of Your Right to a Hearing
  • Post Levy Collection Due Process (CDP) Notice

Collection Appeals Program (CAP) is available for the following actions:

  • Before or after the IRS files a Notice of Federal Tax Lien
  • Before or after the IRS levies or seizes your property
  • Termination, or proposed termination, of an installment agreement
  • Rejection of an installment agreement
  • Modification, or proposed modification, of an installment agreement

See IRS Publication 1660, Collection Appeal Rights, for more information.

How do you use tax Form 9423?

When you receive notice of a collections action, notice of federal tax lien, or other decision by the IRS, the first step is usually to contact the Revenue Officer who issued the notice. You will discuss the situation with them and ask them to change their decision. If you can’t come to an agreement, the next step is to request an informal conference with their collection manager.

If you don’t get what you want from the manager, you need to do two things.

  • Tell the manager at the end of the conversation that you will file IRS Form 9423.
  • Fill out the form and submit it within three business days.

For installment agreements, you may not need to request an informal conference and may be able to file Form 9423 within 30 days of being denied for an installment agreement or 76 days of the IRS telling you they will terminate your installment agreement.

A Collection Appeal Request does not appeal the amount you owe to the IRS. It challenges whether the IRS followed the collection rules and procedures. The only exception is when you’re saying it’s not your debt and the IRS is trying to collect from the wrong person. If you want to challenge your tax liability, you need to challenge your original notice or letter.

What happens when you file a Collection Appeal Request?

The first thing submitting an appeal does is buy you more time. The IRS will usually stop collections until they review your appeal. So if you’re trying to find another way to pay off your tax debt, appealing might give you the extra time that you need.

Of course, the IRS is also going to review your appeal. If you have a good reason to appeal and aren’t just stalling for time, the IRS may agree with you and stop collections or even give you your money back.

Should you use Form 9423 just to buy more time?

There are three things you need to know if you’re trying to stall collections by filing an appeal.

  • First, you submit your appeal request under penalties of perjury. So you need to actually have a valid basis for appealing.
  • Second, the rules are very technical. There is usually some sort of reason you can use to file an honest appeal.
  • Third, collection appeals move quickly. They are normally resolved within days or a few weeks at most. This isn’t something you can drag out for months on its own. It may give you just enough time if you’re waiting for an answer on your appeal of your tax liability or if you’re trying to get a private loan to pay off your tax debt.

What happens when you appeal?

The IRS usually schedules a phone conference after reviewing your written reason for appeal. This gives you a chance to further explain your appeal and why the IRS should take the action you’re requesting. You have the right to have an attorney, CPA, or Enrolled Agent represent you at this conference. You will need to submit a Form 2848 Power of Attorney before the conference to allow someone to represent you. You can also represent yourself if you want to.

Who can help you with IRS Form 9423?

If IRS collections will leave you unable to pay your bills or you believe the amount the IRS is taking is wrong, it’s a good idea to get professional tax help. Once the IRS starts collections, it means they already think they’re right, and it’s hard to change their minds. If you’re not familiar with the Internal Revenue Service’s technical rules for collections and appeals, it’s likely in your best interests to find an attorney, CPA, or EA who can help you.

The following providers offer tax resolution services.

Should you get a loan to pay off your tax debt?

If you have tax debt, a personal loan may save you money compared to letting IRS collections take your money. You may get a better interest rate than IRS installment agreements depending on your credit. In addition, IRS collections often come with IRS administrative fees, continuing IRS interest and penalties, and fees from your bank when the IRS issues a garnishment or levy. Having tax debt on your record can also make you ineligible for future IRS tax relief.

With a personal loan, your tax debt is paid in full as far as the IRS is concerned. The IRS won’t charge any more interest, penalties, or fees, and you only pay the interest rate on your loan.

Conclusion

Whether the IRS has gotten it wrong on collections or you need to buy a little more time, IRS Form 9423 may be the answer you need. Since this is a complex issue, you may want to consult with a tax attorney or Enrolled Agent. If you’re not able to stop IRS collections, taking out a personal loan to pay off your tax debt may save you money compared to the additional fees that can come with IRS collections.

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