Negotiating a Collection Hold While You Appeal

Overview

Filing an appeal of an IRS collection action and negotiating a collection hold can prevent immediate enforcement (wage garnishments, bank levies, or lien sales) while you pursue relief. The most common, formal path is filing for a Collection Due Process (CDP) hearing using Form 12153; a timely CDP request generally stops most levies and can prevent the filing of a Notice of Federal Tax Lien while Appeals reviews the case (IRS — Collection Due Process: https://www.irs.gov/appeals/collection-due-process). If you are negotiating directly with a revenue officer, Appeals examiner, or your local IRS office, you can also ask for an administrative hold based on hardship or pending documentation.

(Disclaimer: This information is educational and current as of 2025. It is not legal advice. For guidance specific to your situation, consult a CPA, enrolled agent, or tax attorney.)

Why a collection hold matters

• Stops or delays aggressive collection actions that can quickly and permanently damage finances (levies on bank accounts, wage garnishment, passport action in extreme cases).
• Buys time to gather records, prepare a thorough appeal, or negotiate alternative resolution (installment agreement, Offer in Compromise, or Currently Not Collectible status).
• Reduces the stress and urgency that often leads taxpayers to accept unfavorable terms.

Authoritative sources: IRS Collections general guidance (https://www.irs.gov/businesses/small-businesses-self-employed/collections) and IRS Appeals overview (https://www.irs.gov/appeals).

How the legal process typically works

1. Notice and timeline. Collection activity usually follows assessment and notice. For certain notices (Notice of Intent to Levy (NITL) or Notice of Federal Tax Lien), you have a 30-day window to file a CDP request using Form 12153 to preserve appeal rights and trigger protections (see Form 12153: https://www.irs.gov/forms-pubs/about-form-12153).

2. Filing Form 12153 (CDP or Equivalent). Submit Form 12153 within the deadline indicated on the collection notice. A timely CDP request generally halts levy actions and can prevent the IRS from filing a Notice of Federal Tax Lien while the appeal is pending. However, a lien already filed usually remains until Appeals issues a determination. (IRS — Collection Due Process: https://www.irs.gov/appeals/collection-due-process)

3. Administrative holds. If you are working directly with a revenue officer before or after filing Form 12153, explicitly request an administrative collection hold. Revenue officers have discretion to place short-term holds for documented hardship, pending review, or to allow time for Appeals to accept jurisdiction.

4. Appeals review and hearing. Appeals reviews the issues you raise (including spousal defenses, collection alternatives, and procedural errors). During review, Appeals can recommend release of levies, withdrawal of liens, or other remedies depending on findings.

5. Resolution or further appeal. If Appeals issues an adverse decision, other appeal avenues may exist (e.g., Tax Court petition in some cases), and collection actions may resume unless a further stay or injunction is obtained.

Practical steps to negotiate a hold (step-by-step)

1. Read the notice immediately. Identify the deadline for filing Form 12153 or the appeals request. Missing the deadline limits your CDP protections.

2. File Form 12153 on time. Include a concise cover letter that: states you are requesting a CDP or Equivalent hearing, identifies the notice number, summarizes the basis of your dispute, and requests a temporary suspension of collection actions while Appeals considers your case. (Form 12153: https://www.irs.gov/forms-pubs/about-form-12153)

3. Document financial hardship. If real hardship exists, complete and attach a current collection information statement (Form 433-A, 433-F, or 433-B as appropriate) showing income, expenses, and assets. Ask for Currently Not Collectible (CNC) status if you cannot pay without basic needs suffering.

4. Ask for an administrative hold by name. If a revenue officer contacts you, say explicitly: “I am submitting a Form 12153 and request an administrative hold on enforcement while Appeals considers this matter,” and follow up in writing.

5. Escalate if needed. If the revenue officer refuses an administrative hold and you filed timely for CDP, contact the Appeals office listed on your notice or consult a tax advocate (Taxpayer Advocate Service) for intervention.

6. Keep records and follow up frequently. Maintain written logs of calls, attach proof of submissions (certified mail, e-file confirmation), and send concise status inquiries every 10–14 days until resolved.

What a collection hold does — and doesn’t — do

• Typical protections: A timely CDP request usually prevents most levies and prevents the IRS from filing a Notice of Federal Tax Lien while the appeal is pending (IRS — Collection Due Process). It also preserves your right to an independent Appeals review.

• Limits: A collection hold may not remove an already-filed lien; it often doesn’t stop offset of federal payments (e.g., Social Security offset) in all situations; it won’t erase penalties or interest while the dispute proceeds. The IRS can sometimes proceed in urgent cases or where statutes require immediate action.

Alternatives and parallel options

• Currently Not Collectible (CNC): If you can’t pay now, request CNC status by submitting Form 433-F or 433-A and requesting the revenue officer place your account in CNC. CNC suspends enforced collection but interest and penalties accrue (IRS Collections guidance).

• Installment Agreement: Negotiate a payment plan. You can request the IRS pause aggressive enforcement while evaluating a reasonable installment offer.

• Offer in Compromise (OIC): If you qualify, an OIC can settle tax liabilities for less than the full amount. The OIC process has its own rules and timelines; submit Form 656 and the necessary financial statements.

• Taxpayer Advocate Service (TAS): If you face immediate hardship or the IRS isn’t following procedures, TAS may help secure a temporary hold or faster review.

Common mistakes and pitfalls

• Assuming an appeal automatically stops all collection. You must file timely and usually provide documentation—mere notice of appeal is not enough.
• Missing deadlines. The 30-day window for CDP is strict; late submissions often forfeit the automatic protections.
• Poor documentation. Weak or incomplete financial statements reduce the chance of a hold for hardship.
• Ignoring alternatives. Negotiating a reasonable installment agreement or CNC can be faster than a protracted appeals win.

Tips from practice

• Be concise and organized. Appeals examiners and revenue officers want clear facts and a paper trail. In my practice, clients who submitted a one-page summary plus a complete Form 433 saw faster administrative holds than those sending mountains of unsorted documents.
• Use certified mail or e-file and keep confirmations. If the IRS disputes timeliness, proof of mailing or electronic receipt is often decisive.
• Consider professional representation. A CPA, enrolled agent, or tax attorney familiar with local revenue officers can speed negotiations and reduce sampling errors.

If the request is denied

• Continue the appeal. Filing Form 12153 preserves appellate options; if Appeals denies the stay, you may still pursue other administrative remedies or litigation where appropriate.
• Negotiate alternatives quickly. If a hold is denied, propose an installment agreement or request CNC to prevent seizures while you litigate.

Frequently asked practical questions

• How long will a hold last? Duration varies. A CDP stay lasts while Appeals has jurisdiction—typically until Appeals issues a determination. Administrative holds can be shorter and are discretionary.
• Can I get a refund of seized funds? If the IRS levied improperly and Appeals later rules for you, you can request a refund or restoration of funds.
• Is counsel required? No, but representation improves outcomes in complex cases.

Related FinHelp resources

• Read our guide on working with the IRS collections department for best practices: Working with the IRS Collections Department: Best Practices.

• For context about how levies and liens are prioritized, see: How IRS Collections Prioritize Liens, Levies, and Seizures.

• Review time limits that matter to collections: Statute of Limitations on IRS Collections.

Closing notes

Negotiating a collection hold while you appeal is a practical way to reduce immediate financial harm and buy time to prepare a strong challenge. The most reliable route is filing Form 12153 on time and supporting your request with accurate financial documentation. If you feel overwhelmed, reach out to a qualified tax professional or the Taxpayer Advocate Service for individualized help.

(Author’s note: In over 15 years advising taxpayers, I’ve found timely, well-documented CDP requests—paired with clear, organized financial statements—are the single biggest factor that persuades the IRS to pause collection while Appeals reviews the matter.)

Sources: IRS — Collection Due Process (https://www.irs.gov/appeals/collection-due-process); IRS Collections (https://www.irs.gov/businesses/small-businesses-self-employed/collections); About Form 12153 (https://www.irs.gov/forms-pubs/about-form-12153).