Collection Due Process Hearings: Deadlines and Rights Before IRS Levy or After a Lien Filing

IRC §§6320 and 6330 provide Collection Due Process rights after specified lien filings and before most administrative levies. A timely request can preserve independent Appeals review and, after a determination, the right to petition the United States Tax Court.

Which Notices Create CDP Rights

Lien CDP rights generally arise after the IRS files a Notice of Federal Tax Lien and issues the required notice of filing and hearing rights. Levy CDP rights generally arise from a final notice of intent to levy and notice of the right to a hearing, such as Letter 1058, LT11, CP90, or an equivalent notice.

Not every collection notice creates a CDP right, and emergency, state-refund, federal-contractor, and certain other levies follow special rules. The actual notice and tax periods must be reviewed.

Use the Deadline Printed on the Notice

Form 12153 generally must be submitted within the statutory 30-day period. The notice ordinarily states the deadline. Because mailing, address, weekend, holiday, and timeliness rules can become disputed, the safer practice is to use the printed date, submit early, use an approved delivery method, and retain proof.

A request should identify the notice, tax periods, collection action, issues raised, and requested alternative. A premature, late, unsigned, misdirected, or incomplete submission can create procedural problems, although correction or perfection rules may sometimes help.

What Appeals Reviews

The settlement officer verifies that legal and procedural requirements were satisfied, considers properly raised issues, evaluates collection alternatives, and balances efficient collection against the taxpayer's concern that the action be no more intrusive than necessary.

The Appeals employee generally must have had no prior involvement with the unpaid tax, unless the taxpayer waives that restriction. The hearing is often conducted by telephone, correspondence, or video rather than as a formal courtroom proceeding.

Challenging the Underlying Liability

A taxpayer may generally challenge the existence or amount of the underlying liability only when the taxpayer did not receive a statutory notice of deficiency and did not otherwise have a prior opportunity to dispute it. A prior Appeals opportunity, self-reported liability, assessable penalty, or other procedural history can change the answer.

Collection Alternatives Require Compliance and Evidence

Installment agreements, offers in compromise, Currently Not Collectible status, lien withdrawal, discharge, subordination, or another alternative may be raised when available. Appeals can require current returns, estimated-tax payments, employment-tax deposits, financial statements, bank records, asset information, and supporting documents.

Effect on Collection and the Statute

A timely levy CDP request generally prohibits the levy action for the covered periods while the hearing and permitted judicial review are pending, subject to statutory exceptions. A lien filing is not automatically withdrawn while a lien hearing is pending, and other collection actions may be governed by separate rules.

The collection statute is generally suspended during the statutory period. Requesting a hearing can therefore extend the time the IRS has to collect.

Determination and Tax Court Petition

Appeals issues a Notice of Determination in a timely CDP case. A petition generally must be filed with the United States Tax Court within 30 days after the determination. The filing deadline is jurisdictionally important and should be calculated from the notice and current law, not from the date the taxpayer happens to open the mail.

Equivalent Hearings Are Different

A late request may qualify for an equivalent hearing if submitted within the applicable one-year period. An equivalent hearing can provide Appeals review but generally does not suspend the collection statute, does not statutorily prohibit collection, and results in a decision letter rather than a CDP determination carrying the same Tax Court rights.

CDP rights are notice- and deadline-specific. This information is educational and is not a conclusion that a particular notice is valid, timely, or eligible for a hearing.