Collection Due Process & Equivalent Hearings
A Collection Due Process (CDP) Hearing is available if you get one of the following notices from the Internal Revenue Service (IRS):
- Notice of Federal Tax Lien Filing and Your Right to a Hearing
- 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.
Upon receipt of one of these notices, you have 30 days to file a request for a CDP Hearing protesting the IRS’s collection action. (Even after the 30 day period has expired, it is often possible to file a request for a similar appeal, called an “Equivalent Hearing.”) The IRS is prohibited from taking collection action after a CDP hearing has been timely requested. After a timely request for a CDP hearing, the 10-year statutory limitation on IRS collection activity is suspended until the date the determination becomes final or the date the taxpayer withdraws its request for a hearing in writing (the law does not require the suspension of collection activity in the case of a request for an Equivalent Hearing).
At the hearing, you can propose other ways to resolve the tax or contest your liability for the underlying tax. Alternatives or reasons a taxpayer may disagree with the lien filing or levy action may include:
- Collection alternatives, such as an Offer in Compromise or an Installment Agreement
- Subordination or discharge of the Federal Tax Lien
- Withdrawal of Notice of Federal Tax Lien
- Innocent Spouse Relief
- The existence of the amount of tax (only if taxpayer did not receive a notice of deficiency or otherwise was not afforded an opportunity to dispute the tax liability)
At the hearing, the taxpayer may not raise an issue that was raised and considered at an earlier hearing, if the taxpayer meaningfully participated in the earlier hearing. After the hearing, the IRS Appeals Officer will issue a written determination letter. If you disagree with the decision, you can contest the CDP determination in the United States Tax Court.
