Collection due process rights, part 2: why they are needed

In the first part of this post, we began discussing collection due process (CDP) rights.

Those rights and required procedures are important in establishing the rules that the IRS has to play by when seeking to collect back taxes.

In this part of the post, let's look at some of the reasons why people can get behind on taxes and find themselves needing to use their CDP rights.

If you are facing tax debt, keep in mind that you have plenty of company.
The number of accounts that the IRS considers delinquent on federal taxes was 13.4 million last year, up from 12.4 million the year before.

The IRS is also collecting a lot. In Fiscal Year 2015, it was $35.6 billion, up from $34.2 in the previous fiscal year.

Why are there so many people with tax debt?

There is no one single reason. But part of the problem is the slow response time that the IRS has to good faith attempts to resolve tax matters.

For example, there are many documented cases of the IRS failing to load installment agreement applications into its system in a timely manner. When that happens, an account can get thrown into delinquency even when the taxpayer has made an honest effort to resolve the issue.

There are also taxpayers who are experiencing genuine financial hardship and have not paid their taxes for that reason.

And of course there are some taxpayers who refuse to pay taxes as a protest, as well as those who are trying to evade taxes.

But whatever the reason for tax noncompliance, a taxpayer has collection due process rights.

 

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