The official meaning of this notice is “IRS Notice CP77 – Intent to Seize Your Assets and Notice of Your Right to a Hearing”. This means that the IRS is preparing to issue a levy against Alaska Permanent Fund Dividends owed to you. The IRS also has the right to file a lien. This type of notice falls under the category of “unpaid balance”. The intent to levy certain assets is for unpaid taxes. You have the right to a Collection Due Process hearing. The IRS notice CP77 is a very urgent notice. The IRS often levies against bank accounts because they are the easiest to prey on. They may levy against life insurance policies, or a 401(k) or pension plan.

 

REASONS FOR RECEIVING THIS PARTICULAR NOTICE

 

There are some reasons why taxpayers would receive the CP77 notice, they are:

  • The taxpayer filed an individual tax return.
  • The tax return filed by the taxpayer resulted in a balance due.
  • The taxpayer has not responded to previous attempts by the IRS to collect the balance due.
  • The taxpayer is eligible for the Alaska Permanent Fund Dividends.
  • The IRS sent the CP77 notice as the final notice prior to filing a levy against the Alaska Permanent Fund Dividend payments owed to you and prior to filing a lien. You have the right to appeal the proposed levy/lien with a hearing.

NEXT STEP – The next step is to determine if the notice was sent in error. You have to confirm if you have an outstanding tax liability. You can also check for unfiled or incomplete returns as well.

There is a time limit given by the IRS, each letter or notice from the IRS will indicate a date that you must to contact them by.  If you need more time, you can call the number on the notice or letter and request for an extension but do not allow the time given to expire without contacting them or hiring a tax representative to contact them for you.

It is not advisable to do nothing when you receive the CP77 notice as your tax problems will only worsen if you ignore the IRS. The day of reckoning is inevitable. If you cannot pay the amount you owe, there are other solutions available to taxpayers who are otherwise in compliance with the IRS. Being in compliance simply means that taxpayers must have all tax returns filed and any balances paid or must be on a payment plan.  If you have outstanding debts or unfiled returns, you need to get hire a Certified Tax Resolution Specialist. You can also make use of “Offer in Compromise” to enable you pay less than the usual amount if you are lucky. If you wish to set up a payment plan after reading the notice, you can contact the IRS by calling the number provided on the top right hand corner of the notice that you received to talk about payment options.

If you don’t know how to address the issue, you have unfiled return you have unpaid balances or just done feel confident enough to handle the IRS on your own, let the tax experts represent you. You don’t even have to talk to the IRS. They can speak on your behalf. If you wish to let someone represent you, then you will need to fill out and send the IRS a Form 2848 – Power of Attorney and Declaration of Representative, to allow someone (such as a certified accountant) to contact the IRS  on your behalf.

If you disagree with the notice sent by the IRS, you will need to request a Collection Due Process (CDP) hearing on IRS Form 12153 or any other related hearing. The reason for requesting a Collection Due Process hearing is so that you can appeal the intent to levy and other disagreements you might have at the hearing.

COLLECTION DUE PROCESS (CDP) HEARING

According to the IRS, a Collection Due Process (CDP) is available if taxpayers receive one of the following notices:

  • Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320 (Lien Notice)
  • A Final Notice – Notice of Intent to Levy and Notice of Your Right to A Hearing
  • Notice of Jeopardy Levy and Right of Appeal
  • Notice of Levy on Your State Tax Refund – Notice of Your Right to a Hearing (Levy Notices)
  • Notice of Levy and Notice of Your Right to a Hearing.

If you disagree with the Appeals decision, you may be able to take your case to court. If you disagree with specific IRS collection actions, you may have the right to request a Collection Due Process (CDP) hearing. During the hearing, you or your authorized representative will state your case and provide documentation to support your position.

You can request a Collection Due Process hearing when:

  • The IRS files a tax lien – According to the IRS, a tax lien is the government’s legal claim against the property of United States taxpayers when they neglect or fail to pay a tax debt. The lien protects the government’s interest in all their properties, including real estate, personal property and financial assets. A federal tax lien exists after the IRS puts your balance due on the books, sends you a bill that explains how much you owe (Notice and Demand for Payment). It also exists when you neglect or refuse to fully pay the debt in time.
  • You receive a Final Notice of intent to levy.
  • You receive a notice explaining that the IRS levied your state tax refund or federal contractor payments.
  • You receive a Notice of Jeopardy Levy.

If you disagree with the appeals officer’s decision at the end of a Collection Due Process hearing, you have the right to file a petition with the United States Tax Court.

NOTICE DEADLINE – The deadline is 30days from the day the IRS sends the notice to taxpayers. If taxpayers miss the deadline, The IRS will issue a levy against their Alaska Permanent Fund Dividend payments and may also issue a notice of federal tax lien.