When the Internal Revenue Service (IRS) initiates collection actions for unpaid taxes, it must first provide formal notice and an opportunity for the taxpayer to respond. This is where Collection Due Process (CDP) rights become critical. A CDP hearing allows you to challenge the IRS’s proposed enforcement actions—such as filing a federal tax lien or issuing a levy—before they are carried out. Acting promptly can protect your assets and preserve critical legal rights.
A CDP hearing is conducted by the IRS Independent Office of Appeals, ensuring your case receives an impartial review by an appeals officer without prior involvement. During the hearing, you may propose various collection alternatives, including a payment plan, an offer in compromise, or innocent spouse relief. You may also dispute an underlying tax liability or challenge the scope of the IRS’s collection actions. If you disagree with the determination, you retain the right to seek judicial review in the U.S. Tax Court or the appropriate District Court.
These rights are grounded in Internal Revenue Code (IRC) §§ 6320 and 6330, which govern federal tax liens and levies. A timely CDP request can halt IRS collection efforts, provide an opportunity to negotiate, and ensure all actions comply with applicable law. By understanding and exercising your CDP rights, you gain a crucial safeguard against aggressive enforcement and ensure that the IRS’s actions are reviewed for accuracy, fairness, and proper documentation.
A Collection Due Process (CDP) hearing formally protects your rights as a taxpayer under Internal Revenue Code (IRC) §§ 6320 and 6330. This hearing is triggered when the IRS issues a notice of federal tax lien or a notice of intent to levy. During the hearing, you can present collection alternatives, such as entering into an installment agreement, requesting innocent spouse relief, or raising valid spousal defenses.
The IRS Independent Office of Appeals conducts the CDP hearing, ensuring an impartial officer with no prior involvement reviews your case. This process also preserves your right to judicial review in the U.S. Tax Court or the appropriate District Court if you disagree with the final notice of determination. Using this process, taxpayers can delay or prevent enforcement actions while seeking a fair resolution to their tax issues.
Why These Rights Matter
Requesting a CDP hearing promptly is one of the most effective ways to protect your assets and preserve your legal rights during IRS collection efforts. A properly filed CDP request can temporarily stop levies, wage garnishments, and other enforcement actions, giving you time to arrange payment plans, submit supporting documentation, or challenge the tax period.
Exercising these rights ensures that the IRS bases its collection actions on accurate information and applicable law and that your case receives a thorough, impartial review. If you disagree with the appeal's determination, you can escalate the matter to court for final resolution. By understanding and using CDP protections, taxpayers can manage their tax liabilities proactively while preventing unnecessary financial hardship.
A collection due process hearing is not automatic—the Internal Revenue Service must notify you before your right to request one begins. The IRS issues several types of notices that activate your CDP rights, and knowing how to identify these is essential if you want to protect yourself from enforced collection actions like IRS levies or a federal tax lien filing.
When the IRS sends any of the following notices, you gain the right to request a CDP hearing:
You have 30 days from the date on the notice to submit your hearing request. A timely CDP hearing protects you from IRS collection efforts and allows for a full review by an impartial appeals officer under the IRS Independent Office of Appeals.
Always use certified or registered mail when sending your CDP hearing request to the correct IRS address listed on the notice. This ensures proof of timely filing under the applicable law governing due process.
A federal tax lien is a serious legal claim by the Internal Revenue Service against your property due to a tax debt you owe but have not paid. When you fail to pay your tax bill, the IRS may begin collection due by placing a lien on your real estate, personal property, or financial accounts. This lien establishes the government's legal right to your assets before other creditors.
The federal tax lien is filed after the IRS assesses your tax liability and sends you a notice of the federal tax due, and you either neglect or refuse to pay that amount. The filing protects the government's interest and serves as public notice to creditors and financial institutions. This action can severely affect your credit rating, disrupt refinancing or loan approvals, and limit your ability to sell or transfer property.
Under IRC § 6320, the IRS must notify you within five business days after the lien filing. This notification—commonly delivered through Letter 3172—includes your right to request a collection due process hearing.
Filing a hearing request after a federal tax lien filing allows you to dispute the IRS's claim or propose payment arrangements such as a payment plan. An impartial appeals officer from the IRS Independent Office of Appeals will review the case based on applicable law.
If the taxpayer disagrees with the determination letter, they may seek judicial review in the Tax Court or the District Court. Timely action ensures that your rights are protected and your voice is heard before enforced collection actions proceed.
Once the Internal Revenue Service issues a final notice, such as a notice of intent to levy or a federal tax lien filing, you can request a CDP hearing. This administrative process allows you to challenge the IRS's proposed collection actions, submit collection alternatives, and assert legal defenses—all before the IRS moves forward with enforced collection due.
Submitting a CDP hearing request on time activates your procedural protections, and ensures an impartial appeals officer from the IRS Independent Office of Appeals will review it.
The IRS sends a notice, such as Letter 3172 or LT-11, informing you of the tax period covered, the tax liability, and your right to a hearing.
You must file the proper IRS form—Form 12153—to initiate your collection due process hearing. Send your hearing request to the IRS address specified in the notice using certified or registered mail to obtain proof of mailing.
While the hearing is pending, filing a timely CDP hearing request suspends the IRS's ability to levy your assets, such as wages or a state tax refund.
The hearing may be held by phone, mail, or in person. The appeals officer must have had no prior involvement in your case and must consider all supporting documents and relevant applicable law.
After the review, the IRS issues a notice of determination summarizing the decision and next steps.
If the taxpayer disagrees with the determination letter, they may seek judicial review by petitioning the U.S. Tax Court within 30 days. In some instances, the taxpayer may also pursue review in the District Court, which is particularly important if the case involves a tax controversy regarding the underlying tax liability.
You may still be eligible for an equivalent hearing if you miss the 30-day deadline to request a CDP hearing after receiving a notice of intent to levy or notice of federal tax lien. This alternative process allows you to present your case to the IRS's Independent Office of Appeals, even though certain legal protections are limited compared to a timely CDP hearing.
You must request an equivalent hearing within a year of the IRS's final notice date. You still use Form 12153, and your hearing request must be mailed to the correct IRS address using certified or registered mail to ensure proof of delivery.
While the structure of an equivalent hearing is similar to a collection due process hearing, there are several important distinctions:
Despite its limitations, an equivalent hearing can still be helpful in several circumstances:
While not as powerful as a due process CDP hearing, an equivalent hearing can be a valuable last resort for addressing IRS collection efforts after deadlines have passed.
The Collection Due Process (CDP) framework is grounded in the principle of due process, a constitutional protection that ensures taxpayers are treated fairly before the government seizes property or takes other collection actions. When the Internal Revenue Service initiates collection due to an unpaid tax, it must first inform you of your rights through a proper legal notice and provide a fair opportunity to respond.
Key protections under a collection due process hearing include the following for taxpayers:
Before initiating enforced collection, such as IRS levies, the IRS must:
The Taxpayer Bill of Rights guarantees transparency and fairness, supporting your ability to challenge the IRS. Key principles include
Filing a timely CDP hearing request typically suspends collection actions during the hearing process. This pause allows you to present your case, submit supporting documents, and explore collection alternatives without immediate threat to your income or assets.
The Collection Due Process (CDP) framework is one of the most effective legal tools for taxpayers facing IRS collection efforts. Enacted under the tax code to preserve due process, CDP ensures that taxpayers are notified of pending enforcement actions and can respond before the Internal Revenue Service can seize property, garnish wages, or file a federal tax lien.
By filing a CDP hearing request on time, you trigger a formal review by an impartial appeals officer from the IRS Independent Office of Appeals, allowing you to protect your rights and propose solutions.
Requesting a collections due process hearing can provide several meaningful protections and opportunities:
A timely CDP hearing stops the IRS from issuing levy notices, garnishing wages, or seizing bank accounts during the hearing process period.
You can present payment alternatives, such as a payment plan, monthly payments, or other collection options for financial hardship.
CDP allows you to challenge underlying tax liability, dispute the amount of tax debt, and present supporting documents like financial records or spousal defenses raised.
While your case is under CDP review, the 10-year statute of limitations on IRS collection is temporarily paused. This feature gives you time to resolve the matter without pressure.
A CDP hearing may prevent or delay the filing of a tax lien or the execution of a tax levy, allowing you to address the issue before the IRS takes assets or files damaging public records.
The collection protections create an equitable environment for both the IRS and taxpayers. By understanding and using these rights, you can reduce the impact of enforced collections, resolve your tax controversy, and pursue fair treatment under applicable law.
To protect your rights under the Collection Due Process (CDP) framework, you must submit a formal CDP hearing request by filing IRS Form 12153—Request for a Collection Due Process or Equivalent Hearing. This form initiates your case before the IRS Independent Office of Appeals and must be submitted within the required timeframe to activate your due process protections.
Completing IRS Form 12153 accurately is critical. Your submission must include:
You must also check whether you're requesting a collection due process hearing or an equivalent hearing, depending on the timing of your request.
Send Form 12153 to the IRS address listed on the notice, not the payment address. Using certified or registered mail to confirm delivery is strongly recommended. Attaching a copy of the notice of federal tax lien or final notice helps the IRS match your request with the appropriate file and supports compliance with applicable law.
Along with your CDP hearing request, include relevant supporting documents:
Proper preparation strengthens your case and enables an impartial appeals officer to evaluate your situation relative to the tax code.
A collection due process hearing offers more than just the chance to dispute a tax liability—it also allows you to pursue payment arrangements that reflect your ability to pay. Whether you are facing a tax levy, federal tax lien, or other IRS collection efforts, this hearing allows you to resolve your tax debt fairly, based on your financial condition and supported by proper documentation.
During your CDP hearing, you may propose several collection alternatives depending on your situation:
You may request a standard or streamlined payment plan that allows you to make monthly payments toward your unpaid tax over time. A Partial Payment Installment Agreement (PPIA) may be available for larger balances, where only part of the tax debt is paid before the collection statute expires.
If you cannot pay the full amount and meet strict eligibility criteria, an Offer in Compromise allows you to settle your tax liability for less than the full amount owed. Submitting an OIC requires financial disclosures through Form 433-A or Form 433-B, supporting documents, and fees.
Taxpayers experiencing financial hardship may qualify for CNC status, temporarily halting IRS collection activity. This status does not eliminate tax debt but suspends IRS collection actions such as wage garnishment or asset seizure.
Taxpayers can request spousal defenses raised or apply for innocent spouse relief when appropriate, especially if they were unaware of tax filing errors or omissions by a spouse.
Choosing the right solution depends on your income, assets, tax period, and total tax debt. The appeals officer will consider your eligibility, ability to pay, and any claims of financial hardship under the applicable law. Presenting the right collection alternatives can lead to a favorable resolution without further enforcement by the IRS.
Understanding how taxpayers have successfully used Collection Due Process (CDP) hearings to resolve IRS issues provides valuable insight. These examples demonstrate how timely action, proper documentation, and knowledge of available programs can protect assets and prevent aggressive collection measures.
Example 1: Small Business Owner Avoiding a Payroll Levy
A small catering business owner fell behind on payroll tax deposits and received an LT-11 Final Notice of Intent to Levy for more than $45,000 in unpaid employment taxes.
CDP Action: The owner submitted a timely CDP hearing request using Form 12153, indicating an intent to apply for a Partial Payment Installment Agreement, and supporting documents included Form 433-B, recent bank statements, and detailed monthly expense records.
Outcome: The IRS Independent Office of Appeals approved a payment plan based on the business’s revenue. This resolution allowed the taxpayer to make manageable monthly payments, keep the business operational, and avoid asset seizure.
A taxpayer received Letter 3172, a Notice of Federal Tax Lien, despite not having a filing requirement for that year. The lien was based on a Substitute for Return (SFR) that the IRS created without the taxpayer’s input.
CDP Action: The taxpayer filed a CDP hearing request disputing the underlying liability, attached proof of non-filing obligation, and included supporting IRS correspondence.
Outcome: The appeals officer determined that the lien was invalid. A determination letter was issued in the taxpayer’s favor, and the tax lien was released, eliminating the assessed liability.
A 75-year-old taxpayer received a levy notice for $8,000 in unpaid taxes from prior years, with Social Security benefits as their only income source.
CDP Action: A CDP hearing request was filed, citing financial hardship. The taxpayer submitted Form 433-A, Social Security pay stubs, and documents showing minimal assets and living expenses.
Outcome: The appeals officer placed the account in Currently Not Collectible (CNC) status, suspending all IRS collection actions and protecting the taxpayer’s only source of income.
Collection due process is the legal right that allows a taxpayer to challenge IRS collection actions, such as liens or levies, before they are enforced. It ensures the IRS follows proper procedures and provides official notice before action. During a hearing, taxpayers can propose payment solutions or raise defenses, including spousal defenses or disputes regarding the underlying tax liability, allowing them to resolve issues before enforcement.
A collection due process hearing allows taxpayers to challenge the appropriateness of proposed collection actions and, in some cases, the underlying tax liability if they have not had a prior opportunity. Taxpayers can also address denials or modifications of payment plans, request consideration of collection alternatives like installment agreements or Offers in Compromise, and raise procedural errors made by the IRS. This hearing provides a fair forum for resolving disputes.
A collection due process hearing is an administrative review conducted by the IRS Independent Office of Appeals where a taxpayer can dispute planned collection actions. During this hearing, the taxpayer may propose payment arrangements, request relief programs, or provide documentation supporting financial hardship. The appeals officer reviews the case impartially and issues a determination letter. This process allows taxpayers to seek a resolution without going to court or facing immediate enforcement.
When the IRS sends a tax debt to collections, it may begin taking enforcement measures such as filing a federal tax lien, issuing a levy, or garnishing wages. Before these actions occur, the IRS sends a notice informing the taxpayer of their right to a collection due process hearing. If the notice is ignored, the IRS can proceed with enforcement. Responding promptly can help avoid aggressive collection actions and preserve financial stability.
The IRS generally has ten years from the date a tax is assessed to collect the balance due, which is known as the expiration date for the collection statute. This period can be temporarily extended if a taxpayer requests a collection due process hearing, applies for an Offer in Compromise, or enters the Collection Appeals Program. IRS enforcement is typically paused during such reviews until the administrative or judicial process concludes.
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