Do you owe back taxes and face collection actions by the Internal Revenue Service (IRS)? If you’re in a financial bind and can’t pay in full, the notices in the mail that outline the potential consequences can be frightening. And if the IRS has already taken collection action, you’re likely overwhelmed and unsure of what to do next.
The good news is you may be able to remedy your situation through the Collection Appeals Program (CAP). Keep reading to learn how it works, if the collection action taken against you is covered under the program and how to get professional tax help if you need it.
What is the Purpose of Tax Form 9423?
Tax Form 9423 (Collection Appeal Request) is used to appeal a collection action taken by the IRS against you.
What is the Collection Appeals Program (CAP)?
Taxpayers use the Collection Appeals Program (CAP) to appeal IRS collection actions. It’s also available for select taxpayers ineligible for a Collection Due Process (CDP) hearing. More on that shortly.
What Collection Actions is the Program Available For?
The CAP is available for these collection actions:
- Installment agreement: the IRS has rejected your request for an installment agreement, modified your current installment agreement or terminated your installment agreement
- Notice of Federal Tax Lien: this applies to liens that are already filed with the IRS or will be filed soon
- Bank account garnishment: the IRS has already levied your bank account or plans to unless you pay back taxes or reach another solution with the IRS
- Wage garnishment: the IRS has already levied your wages and started deducting money from your paycheck or will attach to your wages soon if you fail to remedy the issue
- Property seizure: the IRS has seized the property or is in the process of doing so; (Quick note: you must appeal the seizure prior before the IRS sells the property)
- Request to issue lien certificate: the IRS has denied your request to issue lien certificates (includes discharge, withdrawal, non-attachment and subordination)
What is the CAP Process?
The CAP process varies depending on the reason for your appeal and the status of your tax debt with the IRS.
If your case has not yet made it over to the Collections Division:
- Step 1: Start by reaching out to the IRS and notifying your designated Revenue Officer of your intent to file an appeal. You could have success with the initial conversation and get the decision overturned.
- Step 2: If the Revenue Officer rejects your request, the conversation will be escalated to the Revenue Officer’s Manager. You’ll have a second opportunity to plead your case and receive a decision.
- Step 3: If they side with you, the appeal process ends there. Otherwise, you’ll have 48 hours to file Form 9423 (Collection Appeal Request) with the IRS to receive a decision.
If your case is already with the Collection Division:
- Step 1: Retrieve your written notice from the IRS and call the number listed on the form. You’ll speak to a representative regarding your intent to file an appeal and explain your reasoning. This individual will either approve or deny your request.
- Step 2: If your request is denied, the next step is to call the Collections Manager, let them know you’re planning to file Form 9423 (Collection Appeal Request).
- Step 3: Fill out the form and mail it within three business days to the IRS.
If you’re requesting an appeal for an action related to an installment agreement:
- Rejected installment agreement applications: File Form 9423 (Collection Appeal Request) within 30 days of the date listed on the rejection notice.
- Terminated installment agreements: File Form 9423 (Collection Appeal Request) within 76 days of the initial termination date.
What is the Difference Between Collection Appeal Request (CAP) and Collection Due Process (CDP) Programs?
Here are some key differences between CAPs and CDPs:
- CDPs are only reserved for current collection actions, but CAPs can be used to appeal both proposed and current collection actions
- CDPs will not halt collection activity, but CAPs will until a decision has been made or the IRS has reason to believe collection of the unpaid tax debt is at risk
- CDPs are not an effective remedy for installment agreement rejections, modifications and terminations as they are not covered under this program
- CAP requests are reviewed and processed relatively quickly, but the CDP process is much longer
How to Fill Out and Send Form 9423
Below is detailed guidance on how to complete and file Form 9423 (Collection Appeal Request):
- Line 1: Taxpayer’s name
- Line 2: Name of representative (be sure to complete and attach a copy of Form 2848 (Power of Attorney) if you plan to have a representative present during the telephone conference)
- Line 3: Social Security Number (SSN) or Employer Identification Number (EIN)
- Line 4: Taxpayer’s business phone number
- Line 5: Taxpayer’s home phone number
- Line 6: Representative’s phone number
- Line 7: Taxpayer’s street address
- Line 8: City
- Line 9: State
- Line 10: ZIP code
- Line 11: Type of tax (refers to the tax form)
- Line 12: Tax periods being appealed
- Line 13: Tax due
- Line 14: Collection action(s) being appealed (Available options: Federal Tax Lien, Levy or Proposed Levy, Seizure, Rejection of Installment Agreement, Termination of Installment Agreement, Modification of Installment Agreement)
- Line 15: Explanation of reason for appeal (include supporting documentation if needed)
- Line 16: Signature (indicate if it belongs to the taxpayer or authorized representative by checking the appropriate box)
- Line 17: Signature date
Send the completed form to your Revenue Officer (if they provided you with an address) or the appropriate IRS Collection Office.
What to Expect After You Send the Form 9423
Once the IRS is in receipt of Form 9423 (Collection Appeal Request), it will immediately cease collection activity until:
- The request is reviewed, and a decision is made.
- The IRS believes collecting what’s owed could be at risk due to actions taken by the taxpayer.
The IRS will contact the taxpayer following the initial review to schedule a telephone conference. The taxpayer is allowed to include a Certified Public Accountant (CPA), Enrolled Agent (EA) or tax attorney on the conference call for additional support or representation, but they’ll need to file Form 2848 (Power of Attorney) in advance.
Once a final decision is made, it cannot be contested or taken to court.
