Taxpayer Rights During IRS Collection Actions

Understanding your rights is the single best tool when the IRS moves from assessment to collection. These rights limit how the IRS may act, create predictable timelines, and give you formal routes to dispute amounts or seek relief. This article explains those protections, how to use them, common pitfalls, and practical steps I’ve used in my practice to protect clients.

Why these rights matter

Collection actions can include levies on bank accounts or wages, filing a federal tax lien, garnishing income, or seizing property. When exercised properly, taxpayer rights slow or stop aggressive actions while you gather documentation, negotiate a plan, or appeal. The Taxpayer Bill of Rights (TBOR) and IRS guidance (see IRS Taxpayer Bill of Rights and Publication 1) give the legal and procedural framework for these protections (IRS: Taxpayer Bill of Rights, 2014; IRS Publication 1).

Key rights during collection (plain language)

  • Right to be informed: You must receive clear notices explaining the tax, penalties, interest, and the collection action the IRS intends to take. The IRS must tell you what you can do to resolve the issue, and where to go for help (IRS Taxpayer Bill of Rights).

  • Right to challenge the IRS’s position and be heard: You have a right to contest proposed collection actions. For many levies and liens you can request a Collection Due Process (CDP) hearing — usually within 30 days of the notice — or use the Collection Appeals Program (CAP) for certain collection disputes (IRS, Collection Due Process).

  • Right to pay no more than the correct amount: You can dispute the amount claimed and present documentation supporting adjustments or abatements.

  • Right to privacy and confidentiality: The IRS must protect your taxpayer information and generally cannot disclose it improperly.

  • Right to representation: You may have someone represent you (an attorney, CPA, or enrolled agent) and the IRS must deal with that representative once properly authorized.

  • Right to fair and just tax system: You may seek relief for financial hardship (currently not collectible status), penalty abatement for reasonable cause, offers in compromise, or installment agreements when appropriate.

  • Right to quality service and timely responses: The IRS must provide timely notices and explain options to resolve collection.

  • Right to assistance from the Taxpayer Advocate Service (TAS): If normal IRS channels fail or you face significant hardship, TAS provides independent help. You can request TAS assistance when problems persist (Taxpayer Advocate Service).

How these rights work in practice

  1. Notices start the clock. When the IRS plans a lien or levy, it sends specific notices explaining your rights and appeal deadlines. For example, a notice of intent to levy generally includes your right to request a CDP hearing, typically within 30 days of the notice date (IRS, Collection Due Process). Missing the deadline can limit your appeal rights, but other remedies may still be available.

  2. Choosing the right response. Common responses include:

  • Requesting a CDP hearing or filing an appeal (to challenge the underlying liability or collection action).
  • Applying for an installment agreement or a partial-pay agreement (see our guide on when an installment agreement is better than an offer in compromise).
  • Submitting an Offer in Compromise if you can demonstrate inability to pay in full (requires a complete financial disclosure and is evaluated under specific IRS criteria).
  • Asking for Currently Not Collectible (CNC) status if you cannot make payments due to financial hardship.

  1. Documentation matters. To assert rights or apply for relief you’ll usually need pay stubs, bank statements, a completed financial statement (Form 433-A/433-F for individuals), and correspondence records. In my practice I advise clients to create a single organized file with scanned copies of notices, proof of income and expenses, bank statements, and written notes of any phone calls (date, time, agent name, and summary).

  2. Representation and fees. If you use a representative, execute Form 2848 (Power of Attorney) so the IRS can speak directly with your authorized representative. Fee agreements vary — choose experienced representation and confirm fees in writing.

Collection appeals and timelines

  • Collection Due Process (CDP): If you get a Notice of Intent to Levy or Notice of Federal Tax Lien filing, you usually have 30 days to request a CDP hearing. CDP hearings permit challenge of the tax liability and consideration of collection alternatives (IRS Collection Due Process). If you lose a CDP hearing, you can still seek judicial review in U.S. Tax Court within 30 days of the Appeals Office decision.

  • Collection Appeals Program (CAP): CAP handles many collection disputes that are not eligible for CDP or when taxpayers prefer an appeals conference. Both appeal avenues are independent of the local collection office.

  • Offers in Compromise (OIC): The IRS evaluates OICs using a Reasonable Collection Potential (RCP) formula. Preparing a strong financial package increases the chance of acceptance; if denied, you can appeal the denial through the Office of Appeals.

Using the Taxpayer Advocate Service (TAS)

TAS helps when you’ve tried normal IRS remedies but still face significant hardship or systemic delays. You can request TAS directly (Form 911) or contact your local TAS office. See our guide on how to engage the Taxpayer Advocate Service for more detail and practical tips.

Practical checklist: what to do when you receive a collection notice

  1. Read every notice carefully — look for deadlines and check if it’s a levy, lien, or math error notice.
  2. Create a file and scan all notices and correspondence.
  3. Verify the tax years and amounts claimed against your records.
  4. If you disagree with the liability, consider requesting an audit reconsideration or CDP hearing depending on notice type.
  5. If you cannot pay, explore installment agreements, Offers in Compromise, or CNC status. See our article on qualifying for an IRS installment agreement for eligibility and application tips.
  6. If you can’t get timely help from the IRS or face hardship, contact TAS (Form 911) and consider professional representation.

Common mistakes I see (and how to avoid them)

  • Ignoring notices. Even a simple math error notice can escalate into collection if unaddressed. Respond promptly.

  • Missing appeal windows. If you don’t file for CDP within the stated time, your options change and some protections are lost.

  • Providing incomplete financial information. An Offer in Compromise or installment agreement request with missing documents is likely to be denied or delayed.

  • Falling for scams. The IRS will not call and demand immediate payment using unusual methods (gift cards/vendor payment services) or threaten arrest. Verify all contacts via IRS.gov and your notice numbers.

Real-world examples (anonymized)

  • Small business payroll case: A client behind on payroll taxes received a levy notice. By immediately requesting a CDP hearing and proposing a payroll-based installment agreement, we prevented asset seizure and kept the business operating.

  • Individual with wrong balance: One taxpayer received a notice for a tax year already paid with bank records. Documenting the proof and asking for an audit reconsideration corrected the account without escalation.

Frequently asked procedural questions

  • What if I miss the 30-day CDP deadline? You may still request an Equivalent Hearing under IRC 6330 or file other appeals; consult a tax professional to preserve rights and explore alternatives.

  • Can the IRS garnish wages without warning? The IRS typically sends a Notice of Intent to Levy before garnishing wages. Always read notices and act quickly to request hearings or negotiate.

  • When should I call the Taxpayer Advocate Service? If you’ve tried IRS channels for 30 days without resolution, or face imminent financial harm, TAS may intervene (Taxpayer Advocate Service).

Authoritative sources and further reading

For practical application and examples, FinHelp has in-depth guides on related topics: see When an Installment Agreement Is Better Than an Offer in Compromise (https://finhelp.io/glossary/when-an-installment-agreement-is-better-than-an-offer-in-compromise/) and our step-by-step How to Engage the Taxpayer Advocate Service: When and How to Ask for Help (https://finhelp.io/glossary/how-to-engage-the-taxpayer-advocate-service-when-and-how-to-ask-for-help/). For rules and eligibility when proposing monthly payment plans, see Qualifying for an IRS Installment Agreement: Eligibility, Costs, and Application Tips (https://finhelp.io/glossary/qualifying-for-an-irs-installment-agreement-eligibility-costs-and-application-tips/).

Professional disclaimer

This article is educational and based on general rules and my experience in tax resolution. It does not replace personalized legal or tax advice. If you face IRS collection actions, consult a qualified tax professional or the Taxpayer Advocate Service for immediate, case-specific guidance.

If you want, I can convert this into a printable checklist or a short letter template to send to the IRS or TAS.