Collection Due Process Hearing

A Collection Due Process hearing, usually shortened to CDP, is a chance to be heard by the IRS Independent Office of Appeals before the IRS takes certain collection actions, or soon after it files a lien. It is time-sensitive. The deadline is short, it is printed on the letter, and missing it changes your options. This page explains who gets a CDP hearing, how to ask for one and what you can discuss.

Which notices carry CDP rights

• Levy. The Final Notice of Intent to Levy and Notice of Your Right to a Hearing: LT11, Letter 1058, CP90 or CP297. The IRS says you have 30 days from the letter date. See LT11 and Letter 1058.
• Lien. Letter 3172, Notice of Federal Tax Lien Filing and Your Right to a Hearing. It also gives you 30 days to request a hearing, and the exact date is stated on the letter. See Letter 3172.

A CP504 notice is not enough on its own to let the IRS levy. The IRS CDP FAQs say the next step is the final notice. A letter that demands money without describing hearing rights may offer other appeal paths, so read it carefully.

What you can raise at the hearing

The hearing is held by Appeals, which is separate from the collection function that sent the notice. You can discuss:

• Collection alternatives. An installment agreement, an offer in compromise, or currently not collectible status. Appeals will want financial information, usually Form 433-A for individuals or Form 433-B for businesses, with supporting documents. Submitting them with the request shortens the time Appeals needs.
• Whether the lien or levy is appropriate. Appeals checks that the IRS followed the required procedures and weighs whether the proposed action balances efficient collection against being no more intrusive than necessary.
• The underlying tax, but only in limited circumstances, such as if you never received a notice of deficiency and never had another chance to dispute the tax. Otherwise, the IRS says you can pursue the issue by paying and claiming a refund, asking for an audit reconsideration with new information, or filing a doubt-as-to-liability offer.
• Claims connected to a joint return, such as a request for innocent spouse relief.

What a timely request does

The IRS suspends levy action for the periods covered in a timely CDP request in most cases, and the 10-year collection period is paused from the date the IRS receives the request until the request is withdrawn or Appeals' decision becomes final, including any litigation. If fewer than 90 days remain on the collection period when the decision becomes final, the IRS extends it to 90 days after that date. For more on timing, see statute of limitations.

Some actions are excluded from CDP, so read your notice and IRS Publication 1660, Collection Appeal Rights, for the details of your case.

After the hearing

Appeals issues a notice of determination explaining what it decided. If you disagree, you can petition the U.S. Tax Court within 30 days of the date the notice was mailed. The Tax Court says the petition should be filed within that 30 days, so do not count on a late petition being accepted. The filing fee is $60 unless the Court waives it. If you agree, the outcome might be an installment agreement, a withdrawn lien, or another arrangement. Collection alternatives carry their own conditions, such as being current on filing and payments.

If you miss the 30 days

You can still ask for an equivalent hearing if you do so within one year of the date of the CDP notice. It is held by Appeals too, but you cannot take the decision to Tax Court, and the IRS manual says the collection clock is not suspended during an equivalent hearing. A different option, the Collection Appeals Program (CAP), covers certain actions such as a lien, levy, seizure, or termination of an installment agreement. A CAP request on Form 9423 goes to the collection office after a conference with a collection manager, generally within three business days of that conference. The IRS warns that using one type of hearing can limit which issues can be raised in the other, and Publication 1660 helps in choosing.

Common mistakes

• Waiting for a payment plan response while the 30 days run.
• Mailing the request to the wrong address.
• Raising only general fairness arguments instead of a specific alternative such as a payment proposal.

How we can help

We can calendar the deadline from your notice, prepare and send Form 12153, assemble the financial statement, and represent you at the Appeals conference with a signed power of attorney. We can also advise on whether a CDP request, an equivalent hearing or CAP is the better fit. No result is guaranteed, and the first step is acting within the stated date.

See IRS liens and levies for the background, or contact us as soon as you receive a final notice.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.