Collection Due Process Hearing
A Collection Due Process hearing gives you an opportunity to have the IRS Independent Office of Appeals review certain collection actions involving a federal tax lien or proposed levy.
You request the hearing with Form 12153.
The right to the hearing comes from a specific IRS notice, and the date on that notice matters.
Start with the notice.
Where a CDP Hearing Sits in the Process
The same proceeding can be reached two different ways.
Notice of Federal Tax Lien Filing > Collection Due Process Hearing > Notice of Determination > U.S. Tax Court
Final Notice of Intent to Levy > Collection Due Process Hearing > Notice of Determination > U.S. Tax Court
How Do You Get a CDP Hearing?
The IRS doesn’t offer a CDP hearing with every collection notice. The right comes with certain notices involving a proposed levy or the filing of a Notice of Federal Tax Lien.
The notices that commonly carry it include:
- Letter 1058, LT11, or CP90, the Final Notice of Intent to Levy and Notice of Your Right to a Hearing.
- Letter 3172, Notice of Federal Tax Lien Filing and Your Right to a Hearing.
If you aren’t sure which notice you have, the notice pages cover that.
What Does a Timely CDP Request Change?
A timely CDP request can affect more than the hearing itself.
For the tax periods covered by the notice, it generally:
- prevents the IRS from moving forward with the proposed levy while the CDP process is pending, subject to statutory exceptions;
- suspends the IRS collection period while the CDP matter and certain related court proceedings are pending; and
- preserves the ability to ask the U.S. Tax Court to review Appeals’ determination.
That second point matters. Time spent in the CDP process can extend the date through which the IRS is allowed to collect.
The IRS collection period is generally measured from the assessment date, but a number of events can suspend it. A CDP proceeding can be one of them.
What Can Be Discussed at a CDP Hearing?
A CDP hearing isn’t limited to arguing about whether the IRS followed the right procedure.
Depending on the case, issues can include:
- an installment agreement;
- an Offer in Compromise;
- Currently Not Collectible status or another collection alternative;
- whether the IRS followed the legal and administrative steps required for the collection action; and
- whether the proposed collection action appropriately balances efficient collection with the taxpayer’s legitimate concern that collection be no more intrusive than necessary.
Can You Dispute the Tax Itself?
Sometimes.
Whether you can challenge the underlying tax liability at a CDP hearing depends in part on whether you previously received a Notice of Deficiency or otherwise had an opportunity to dispute that liability.
In other words, a CDP hearing isn’t always a second chance to argue about the amount of tax.
IRS Notice of Deficiency
What Is the Hearing Actually Like?
A CDP hearing is handled through the IRS Independent Office of Appeals rather than by a judge.
Depending on the case, the hearing may be handled by telephone, correspondence, or another conference format.
The Appeals officer or settlement officer assigned to the case reviews the collection action, the issues properly raised, and any collection alternative being proposed. You or your authorized representative may need to provide financial information or other records depending on what is being requested.
CDP Hearing and Equivalent Hearing Are Not the Same Thing
Timely CDP Hearing | Equivalent Hearing | |
Appeals review | Yes | Yes |
Generally stops proposed levy while pending | Yes, subject to exceptions | No |
Suspends the IRS collection period | Yes | No |
Tax Court review of the resulting Appeals decision | Yes | No |
Request period | Generally 30 days | Generally up to one year, with the exact period depending on the notice |
An Equivalent Hearing may still provide an opportunity for Appeals review when a CDP request wasn’t timely, but it does not carry all of the same procedural protections.
The deadline for requesting an Equivalent Hearing depends on whether the case involves a levy notice or a federal tax lien filing. It is generally later than the 30-day CDP deadline and can extend to roughly one year. Both hearings are requested on the same Form 12153.
What Happens After Appeals Makes a Decision?
After a timely CDP hearing, Appeals issues a Notice of Determination. That notice states a period for petitioning the U.S. Tax Court if you disagree with it.
After an Equivalent Hearing, Appeals issues a decision letter instead, which does not carry the same Tax Court review.
IRS Notice of Determination
CDP Sits at the Intersection of Collection and Appeals
Collection Due Process sits at an unusual point in the IRS system. It starts with a collection action, moves through the IRS Independent Office of Appeals, and in certain cases can continue to U.S. Tax Court.
My first book, IRS Secrets Revealed: How to Survive IRS Audit, Collections & Appeals, grew out of the experience I had already accumulated representing taxpayers in IRS examinations, collection matters, and Appeals.
My later admission to practice before the U.S. Tax Court expanded where that representation can continue when a CDP matter reaches judicial review.
How I Approach a CDP Matter
I start with the notice and the IRS account history.
I want to know what collection action the IRS is proposing or has taken, which tax periods are involved, whether the CDP request is timely, and what issue we are asking Appeals to consider.
If the goal is a collection alternative, the financial facts need to support it. If the issue involves the underlying liability, I need to know what opportunities there were to dispute it earlier.
I can represent taxpayers before the IRS Independent Office of Appeals, and I am also admitted to practice before the United States Tax Court as a non-attorney practitioner. If a qualifying CDP matter later reaches Tax Court, that representation does not automatically have to be handed to someone new.
Frequently Asked Questions
Do I have to pay the balance to request a CDP hearing?
Does requesting a hearing stop everything the IRS is doing?
Do I have to handle the CDP hearing myself?
What if my 30 days already passed?
Received a Notice Offering a CDP Hearing?
Start with the notice.
Bring the notice and anything the IRS sent before it.
I’ll look at which collection action is involved, which tax periods it covers, the date shown for requesting the hearing, and what the account history shows.
General information only, not tax or legal advice. Individual situations vary.