A taxpayer may appeal a Notice of Federal Tax Lien by filing a Form 12153 within 30 days.1 Grounds for appeal include:
- IRS noncompliance with law or administrative procedures2
- Spousal defenses, such as innocent spouse relief
- Challenges to the appropriateness of collection actions
- Collection alternatives such as an installment agreement or an Offer in Compromise (OIC)3
- Assessment of tax or filing of lien while a bankruptcy stay was in effect
- Expiration of the time to collect the tax prior to the lien
- Taxpayer’s opportunity to dispute the asserted liability
- Full payment of taxes before the lien was filed
Lien appeal decisions by the IRS Appeals Officer are reviewed by the Tax Court under an abuse of discretion standard. The petition for judicial review must be filed within 30 days.4
- 1See 26 C.F.R. § 301.6320-1.
- 2In a “CDP” appeal, check for compliance with all applicable I.R.M. procedures. See Murphy v. Comm’r, 125 T.C. 301, 307 (2005).
- 3If a taxpayer appealing a lien seeks an OIC, the IRS Appeals agent will then transfer the case to the IRS office that processes OICs. Unlike with a “standalone” OIC, the denial of an OIC as part of a lien appeal can be judicially reviewed by the Tax Court. For a complete discussion of Offers in Compromise, see Section 7.3.
- 4I.R.C. §§ 6320(c), 6330(c)–(e). Joint Comm. on Taxation, Summary of the Conference Agreement on H.R. 2676, No. JCX-50-98R, at 132 (June 24, 1998).