The Collection Due Process hearing gets most of the attention, and it deserves it. But it has a 30-day fuse, and plenty of people find out about their levy long after that fuse burned out.
That is where the Collection Appeals Program comes in. CAP is an administrative appeal to the IRS Independent Office of Appeals that covers levies that have been or will be taken. It is quick, it has almost no paperwork, and it can be used by people who are not even the taxpayer. It also has hard limits. Know both.
What CAP covers
IRM 5.1.9.4 lists the actions a taxpayer, or a third party whose property is subject to the action, may appeal under CAP. For bank levies, the important ones are:
- A levy or seizure that has been or will be taken.
- Rejected, modified, or terminated installment agreements.
- Disallowance of a taxpayer's request to return levied property under IRC § 6343(d).
- Disallowance of a third-party owner's claim for return of wrongfully levied property under § 6343(b).
The IRM also says each levied asset can be appealed, because each may present different issues. Its example is directly on point: a different account than the one previously levied "may actually be the asset of the child of the taxpayer but the taxpayer's SSN is on the account." But subsequent levies on the same bank account within a reasonable time are not entitled to another CAP appeal unless there is a legal issue, changed circumstances, or a new issue.
What CAP does not cover
IRM 5.1.9.4.1 lists exclusions. The ones that matter in levy cases:
- Your liability. CAP cannot be used to decide whether you owe the tax.
- Jeopardy levies, which have their own review under IRC § 7429, with limited exceptions. See jeopardy levies.
- Rejected offers in compromise, which have their own appeal.
- Original requests for return of levied property. You make the request first; CAP reviews a denial.
- Frivolous or delay-only requests.
How a CAP appeal works for a bank levy
Step 1: Ask for a manager conference
For levies, CAP starts with Collection management. Requests can be made verbally or in writing (IRM 5.1.9.4.2). The group manager must call you back "in a timely manner not to exceed two business days." If you make yourself unavailable for that conversation, you can lose the CAP appeal.
Many levies are resolved right here. A manager can agree to a release or partial release, accept a payment arrangement, or ask the bank to hold the funds.
Step 2: File Form 9423 if the conference does not resolve it
If you do not reach agreement, you can take the issue to Appeals by filing Form 9423, Collection Appeal Request. The timing is tight. Per IRM 5.1.9.4.2:
- You need to tell the manager or revenue officer within two business days of the conference that you intend to submit Form 9423, or collection action may resume (except for installment agreement appeals).
- If you mail Form 9423, it must be postmarked within three business days after the conference to avoid collection action.
- The IRM suggests submitting the form at the conference, by fax, or electronically for that reason.
Late is not always fatal. The IRM says taxpayers are still entitled to a CAP appeal if the form is received within a reasonable time after the conference, giving ten business days as an example. But the stay of collection is no longer required after the three-day window.
Step 3: Ask about holding the funds
This is the single most useful sentence in the CAP section for a bank levy. When a taxpayer is appealing a levy, the IRM says "it may be appropriate to contact the levy source to ask them to hold the funds until after the decision regarding the levy is made in Appeals" (IRM 5.1.9.4.2). Ask for exactly that. Your 21-day hold under IRC § 6332(c) may not be long enough otherwise.
Step 4: Appeals decides
Collection sends a timely CAP request to Appeals within two business days (IRM 5.1.9.4.2). Appeals "tries to resolve CAP cases within five business days" of receiving the case and attempts to hold a conference with you within two business days of receipt, unless complexity requires more time (IRM 5.1.9.4.4).
Decisions by Appeals "are binding on the taxpayer and Collection" (IRM 5.1.9.4.4). If Appeals sustains the levy, enforcement may resume once the decision is received, unless something else prohibits it.
CAP for co-owners and third parties
CAP is one of the few appeal routes open to people who do not owe the tax. IRM 5.1.9.4 says third parties claiming property was wrongfully levied are entitled to CAP before the levy proceeds are turned over to the IRS. Once the money is turned over, the third party must file an administrative wrongful levy claim under Publication 4528, and can request CAP if that claim is denied.
If your mother's savings account was frozen because your name is on it as a convenience signer, that matters. See wrongful levy claims and joint accounts.
CAP vs. CDP
If you still have Collection Due Process rights, the IRM tells employees to explain the difference so you can decide, and notes that the decision belongs to you. You can request both on the same proposed levy, but an issue raised and decided in a completed CAP appeal in which you participated meaningfully may not be raised again in a CDP hearing (IRM 5.1.9.4).
| CAP | CDP | |
|---|---|---|
| Who can use it | Taxpayers and third parties | The taxpayer |
| Deadline | Generally none, but business-day windows after the manager conference | 30 days from the CDP notice |
| Liability issues | No | Sometimes |
| Result | Binding Appeals decision | Notice of determination, with Tax Court review under § 6330(d) |
| Speed | Days | Months |
See CDP hearings to stop a bank levy.
Making CAP work
- Know exactly what you want. A full release, a partial release for rent or payroll, a hold on the funds, or acceptance of a payment plan. Appeals decides discrete issues. Give it one.
- Bring the proof to the manager conference. A financial statement, bank statements, and documents showing the emergency. See economic hardship release.
- Have Form 9423 filled out before the call ends. The windows are two and three business days.
- Ask the IRS to ask your bank to hold the funds until Appeals decides.
- If your case is with ACS, ask the ACS employee for a manager and for CAP. ACS collection appeal procedures are in IRM 5.19.8.
CAP is a sprint. Show up with the paper, the ask, and the form already signed.
If CAP fails and you are facing economic harm, the Taxpayer Advocate Service is the next door to knock on. See the Taxpayer Advocate and bank levies. For more on the firm's approach to collection cases, see getirshelp.com.