Phillip Colasanto authors article in Tax Notes Federal on strengthening procedural protections for third parties in IRS collections

New York-based Tax Partner Phillip Colasanto has authored an article for Tax Notes Federal examining the collection due process (CDP) framework and proposing reforms to better protect third parties whose property may be subject to IRS collection action.

The article argues that current Treasury regulations unnecessarily restrict CDP rights to taxpayers, leaving third parties, including transferees, nominees, alter egos and individuals affected by estate tax liens, without advance notice or a meaningful opportunity to challenge IRS collection actions before their property is seized. It contends that this approach is inconsistent with the language and purpose of the relevant legislation and raises significant due process concerns.

The article proposes amendments to Treasury regulations that would require the IRS to provide notice and access to a CDP hearing to all persons whose property is targeted for levy, regardless of whether they are the taxpayer originally liable for the debt. It further suggests that such reforms would improve procedural fairness, reduce costly post-collection litigation and better align the rules with congressional intent.

Read the full article in Tax Notes Federal (subscription required).