How Long Do I Have to Request an IRS Collection Due Process Hearing??

The IRS is required to give you a final notice of intent to levy before it can levy assets. It must also notify you when it files a tax lien. You get 30 days from the notice date to request a collection due process (CDP) hearing. A timely request stops the collection action. This is a strange business. For now, let’s just stick to the levy notice.

Equivalent Hearing

Okay, now for the strange stuff. If you miss the 30-day deadline, you miss the CDP hearing opportunity, but you can still ask for an Appeals “equivalent hearing,” if you do so within a year. The equivalent hearing results cannot be appealed to the U.S. Tax Court; timely CDP determinations can be appealed to Tax Court. So what does all this legalistic fine-tuning mean to you? Well, here’s one reason it matters. On a collection equivalent hearing, you still get to make your case at Appeals. The difference is, if you lose at Appeals, that’s the end of the road. With a timely CDP request, you could still get the determination reviewed by a court.

Notice of Intent to Levy

With the passage of the Restructuring and Reform Act, Congress created Section 6330. Now the IRS can’t levy your assets until 30 days after delivering its Notice of Intent to Levy. The notice is supposed to tell you that you have this 30 days. It is either delivered personally, left at your home or usual place of business, or sent certified/registered mail to your last known address. The IRS uses Letter 1058.

The 30-day time period is mandatory and the IRS cannot extend it. So, how does this all work out in practice? If you get Letter 1058, note the date. The 30 days are going to go by very fast when you are busy trying to keep your struggling business afloat.

There’s only one CDP hearing per tax and tax period. The request to have the hearing must be in writing and you have to do it within the 30 days. Use Form 12153.

Your CDP notice should have come with Form 12153. Completing and filing Form 12153 is how you make the timely request. Here’s what it asks for.

• (1) your name, address, daytime phone number, and SSN or TIN;
• (2) The type of tax involved;
• (3) The tax period;
• (4) A statement that you request Appeals to schedule a hearing regarding the proposed action.
• (5) An explanation of the reason(s) why you disagree with the proposed action.

Where do you send the written request? The Regulations tell you to send it to the IRS office specified in the Notice. The Notice tells you how to do that.

The hearing may be held via telephone, correspondence or in person.

Notice of Determination

If Appeals isn’t able to resolve the matter, it issues you a Notice of Determination. That’s its decision in letter form. It summarizes the decision and names the court to which you can appeal. It also must state if the IRS followed the law and its rules.

The Notice of Determination must also cover the issues the taxpayer “properly” raised about the unpaid tax. It also must cover spousal defenses; challenges to collection; collection alternatives that the taxpayer proposed; balancing efficient tax collection with the taxpayer’s “interest” in having no more intrustive collection than is necessary; agreements; relief; actions required; and the taxpayer’s 30 days from the date of the notice to petition the court. Note the last item: The Notice of Determination sets a new 30 day clock running from the date of the Notice, for the taxpayer to petition a court for review. Same lesson as above.

We have barely scratched the surface here on CDP hearings. There are a lot of other issues that come into play, as well. But, the bottom line for the most part is that when you receive a Notice of Intent to Levy, it is usually a good idea to request a CDP hearing. BUT, even if the 30 days has already passed, don’t give up hope just yet: you can still ask for an equivalent hearing within a year.