Taxpayers have their right to appeal an IRS Installment Agreement if the request for the installment agreement is rejected.
To be considered, you should appeal an IRS installment agreement within 30 days. And this means the IRS cannot levy your property, garnish your wages, or do any serious action until the appeal ended and the IRS come up with a decision.
How to Appeal to the IRS for a Rejected IRS Installment Agreement
A Revenue Officer may contact you directly through mail or phone call once the IRS rejects your Installment Agreement.
Here are the steps you need to do if the IRS notified you but a Revenue Officer is not involved:
- Contact the IRS using the phone number found on your letter
- Explain why the IRS should accept your Installment Agreement
- If the agent refuses your request, you need to speak with a Revenue Officer or IRS manager
- Tell them you would appeal if they are not willing to work with you
- Do step 3 below
If an IRS Revenue Officer notified you of your rejection, here’s how to appeal an IRS installment agreement:
- Contact the IRS using the phone number on the notice and explain why you disagree with the decision and you’d like to appeal
- If the Revenue Officer didn’t accept your Installment Agreement, you should ask him or her to direct you to the manager
- If there’s still no success in speaking with the Revenue Officer’s manager, you may ask to speak to a Collections Manager
- Explain your side to the Collections Manager
- Accomplish Form 9423 (Collection Appeal Request)
- Have a written explanation of your appeal and send this along with Form 9423
- Postmark Form 9423 at least 30 days from the date in rejection letter
- Wait for the decision
Keep in mind that the decision of the Office of Appeals is final. You cannot appeal again once the Office of Appeals rejects your appeal. You should consider hiring a tax professional to increase your chances to appeal an IRS Installment Agreement
Why an Installment Agreement Gets Rejected?
There are common reasons for the rejection of an Installment Agreement:
- There were inaccuracies on Form 433 (Collection Information Statement)
- The IRS believes you are living beyond any normal or deprived person can. For instance, you send your kids to private schools or own expensive cars and luxury items.
- Form 433 was incomplete
- You neglected your responsibilities with Installment Agreement in the past
- You have outstanding past tax returns
How to Appeal the Termination of an Installment Agreement or Reinstate It
You will receive a mail, or a CP 523 notice, from the IRS once the latter plans to cancel your Installment Agreement.
The CP 523 notice tells you the reasons for the termination of an Installment Agreement and it’s also warning that the IRS is going to levy your assets.
You have up to 76 days to request an appeal for the termination of an Installment Agreement. But you must appeal within 30 days after the notice was issued or else the agreement will be terminated on the 46th day. If you appeal within the timeframe, then the agreement will be reinstated once your appeal gets accepted.
Take note that you can only appeal a termination of Installment Agreement notice within the 76-day period. So you should not let your agreement lapse twice in such a short time period.
Here are the things you should do once an IRS Revenue Officer notifies you of the termination of Installment Agreement:
- Contact the IRS and explain to them why you’d like to appeal the termination. Remember that you only have 30 days to appeal or maximum of 76 days.
- If the IRS Revenue Officer rejects your request to reinstate your Installment Agreement, you’d better speak to their manager
- Better yet speak to the Collections Manager if there’s still no success with the Revenue Officer’s manager
- Explain your case to the Collections Manager
The rejection letter may also come into writing. Here are the things you should do to appeal:
- Fill out Form 9423 or the Collection Appeal Request
- Include a written letter of your request for appeal with Form 9423
- Mail Form 9423 and have this postmarked at least 30 days from the date on your CP523 notice
What Triggers the Termination of an IRS Installment Agreement?
Below are some of the reasons why an IRS Installment Agreement termination happens:
- You have missed payments. The IRS will give you 30 days before terminating your agreement if it is just your first or second missed payment
- The information you put on Form 433 was incorrect or untruthful
- You did not file a current return
- You did not make payments on the current tax bill
Appealing for the denial or termination of an Installment Agreement will never be easy. This is why hiring a tax professional is the best option to get you through the right process.
Forms 433 (Collection Information Statement) and 9423 (Collection Appeal Request) can be really difficult to understand for an ordinary person, so it’s better to have a tax professional helping you get through this and have your appeal for an IRS Installment Agreement accepted.
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