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The IRS Collection Appeals Program (CAP)
The following publications are to inform taxpayers about the CAP program:
Publication 594, The IRS Collection Process
Publication 1660, Collection Appeal Rights
IRS Enforced Collection Action:
A taxpayer, or a third party whose property is subject to a collection action, may appeal the following actions under CAP:
Levy or seizure action that has been or will be taken.
A Notice of Federal Tax Lien that will be or has been filed.
The filing of a notice of lien against an alter-ego or nominee’s property.
Denials of requests to issue lien certificates, such as subordination, withdrawal, discharge or non-attachment.
Rejected, proposed for termination or terminated installment agreements.
Dis-allowance of taxpayer’s request to return levied property under IRC 6343(d).
Dis-allowance of property owner’s claim for return of property under IRC 6343.
A taxpayer may appeal in CAP:
A levy or seizure on each asset or even the same asset previously levied if a newly discovered legal defect is the issue. The reason for this is that each levied or to be levied asset may have different issues.
For example, a bank account in a different bank than previously levied on may actually be the asset of the child of the taxpayer but the taxpayer’s SSN is on the account. Subsequent levies on the same asset, e.g., the same bank account, are not entitled to another CAP appeal unless there is a legal issue on the subsequent levy.
A NFTL filed in each subsequent location.
Each rejection or termination of an installment agreement.
Appeals has a goal to complete CAP cases as soon as possible with the Appeals technical employee normally resolving the CAP within 5 business days from the date the case is assigned to them.
Lien withdrawals or discharges, installment agreement, seizure, and claim issues may be quite complicated or require verification and will generally take longer than 5 business days to resolve.
These cases should normally be resolved within 15 business days.
Third parties may appeal an IRC 6325(b)(4)”right of substitution of value” discharge. Under IRC 7426(a)(4) however, the third party has only 120 days after the discharge to file an action in federal district court challenging the Service’s determination of the government’s lien interest.
Before a taxpayer requests a CAP appeal, he or she must discuss the problem with the Collection manager. Taxpayers or representatives who make themselves unavailable to the manager for the mandatory discussion will not be entitled to a CAP appeal unless it is apparent the IRS manager did not offer a “reasonable” opportunity for such discussion to occur.
The discussion with the group manager on proposed termination, terminated or rejected installment agreements is not mandatory due to statutory right to appeal these actions. See IRC 7122(e)(2).
CAP cases should only be closed on ACDS as a premature referral, cc 20, in the following instances:
When the taxpayer appealed before entitlement to a CAP hearing. IRM 8.22 – Collection Due Process.
The taxpayer or the representative did not have the mandatory meeting with the manager (exception is installment agreement CAP requests).
CAP requests with excluded issues. IRM 8.22 – Collection Due Process.
The CAP appeal is not timely. The appeal was submitted later than allowed under the Collection Appeals Program time frames. For time frames for filing a CAP appeal for installment agreements, see IRM 8.24.1.2.3(6). For other Field Collection CAP appeals see IRM 8.24.1.2.4(3). Time frames do not apply to non installment agreement ACS and Customer Service CAP cases as the CAP request is made prior to the managerial conference
By policy, collection action is suspended while the case is in Appeals for lien, levy, and seizure CAP appeals. The Collection function may continue enforcement action, however, if it believes withholding the action would put collection of the tax liability at risk. Examples:
Evidence that the taxpayer is dissipating assets.
Pyramiding additional tax liabilities, including unpaid Federal Tax Deposits (FTD) and delinquent tax returns.
Appeals should be notified immediately if Collection determines that enforcement should continue.
For installment agreement rejections and terminations, levy action is prohibited by statute.
The prohibition of levy does not apply if the taxpayer waives the levy suspension. Levy prohibition also does not apply on a proposed installment agreement if the installment agreement is requested solely to delay collection.
