COLLECTION DUE PROCESS

 

Collection Due Process (CDP) is available if you receive one of the following notices:

• Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320
• Final Notice – Notice of Intent to Levy and Notice of Your Right to a Hearing
• Notice of Jeopardy Levy and Right of Appeal
• Notice of Levy on Your State Tax Refund – Notice of Your Right to a Hearing
• Post Levy Collection Due Process (CDP) Notice

IRS Code Sections: §6320 and §6330

Treasury Regulations: §301.6320-1 and §301.6330-1

Internal Revenue Manual §5.1.9 and §8.24.1

Usually Final Notice of Intent to Levy is received after Notice CP504 by Letter 1058

 

Prior to the IRS levying upon taxpayer’s income or assets, the IRS is required to give the taxpayer the notice of its intent to
levy and the right to a hearing called a Collection Due Process Hearing. The IRS provides this
notice by sending the taxpayer a “Final Notice of Intent to Levy-Notice of Right to Hearing” via
certified mail. The purpose of this notice is to provide the taxpayer with the right to request a
hearing with an IRS Appeals Officer to discuss collection alternatives other than a levy upon the
client’s assets. The client has 30 days from the date of this notice to request his/her Collection
Due Process (CDP) Hearing. We recommend submitting requests for CDP Hearings via certified
mail with return receipt requested to verify that the hearing request was submitted timely.
Taxpayers, or their authorized representatives, request a CDP Hearing by completing IRS
Form 12153, and filing it with the IRS Automated Collection Service (ACS) at the address
provided on the final notice. The request for a CDP hearing should contain the tax years in
question and what collection alternative you believe would be more appropriate in the taxpayer’s
situation, i.e., an offer in compromise, an installment agreement or placement of the taxpayer’s
account into currently not collectible status. Once the taxpayer requests a CDP hearing, the IRS
will assign the matter to a CDP associate, who will contact the taxpayer for information. If the
taxpayer does not respond, or cannot resolve the issue with the CDP associate, the case is
transferred to an Appeals Officer. The Appeals Officer will then contact you to begin
discussions as to what collection option is most appropriate for the taxpayer.
You should be aware that the CDP process requires patience; it may take several months
to resolve the matter. The Appeals Offices throughout the U.S. are experiencing an incredible
backlog of cases because of the dramatic number of hearing requests currently pending. Cases
are usually assigned to an Appeals Office within a reasonable distance from the taxpayer.
However, if your local office is overwhelmed, the IRS may transfer the case to a less busy office
in another region. If this happens, the hearing will take place via telephone conversations as
opposed to in person.
However, the taxpayer is entitled to an in person hearing, but it should be requested in the
initial request for hearing on the Form 12153. If you determine after you have made the request
for CDP hearing that your client would be better served by an in person hearing due to the
complexity of the case or the need to have the client at the hearing, you may simply request that
the Appeals Office assigned transfer your client’s case to a location where your client can be
present. Note that the IRS will not allow you to have a telephone conference and then allow you
to request an in person conference. You must request the in person conference prior to any
hearing taking place.
If you agree to a telephonic hearing the Appeals Officer will request information via
facsimile and U.S. mail. The CDP hearing process requires substantial documentation that
corroborates all of the taxpayer’s income and expenses. Thus, the client should begin gathering
this information immediately for submission to the IRS. You will want to review I.R.C. § 6330
and the accompanying Treasury Regulations that govern the procedures for a Collection Due
Process Hearing.