What is a Collection Due Process Hearing?
Have you ever received a collection notice from the IRS? Would you know what to do if you did? Do you know what one is? A collection due process hearing is a hearing you request to secure the right to a hearing matter, preserve your right to go to court and offer an alternative to forced collection regarding the notice from the IRS. By law you have the ability to request a CDP hearing when you receive a notice advising you of this right. The most common notices that give you a right to a CDP hearing include (1) Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320; (2) Final Notice - Notice of Intent to Levy and Notice of Your Right to a Hearing; (3) Notice of Jeopardy Levy and Right of Appeal; (4) Notice of Levy on Your State Tax Refund - Notice of Your Right to a Hearing; and Post Levy Collection Due Process (CDP) Notice.
How to Request a CDP hearing?
To request a CDP hearing, you must complete Form 12153, Request for a Collection Due Process or Equivalent Hearing, or other written request with the same information and send it to the address shown on your lien or levy notice. You want to explain why you disagree with the levy or lien and provide alternatives such as an installment agreement or an offer in compromise or propose an appropriate spousal defense. This information must be provided to the IRS within 30 days of the date of the notice. If the CDP hearing request is not timely, you may request an equivalent hearing and lose valuable rights.
What Happens After a CDP Hearing is Requested?
Once you have requested a CDP hearing, you or your representative may still discuss resolution with the IRS Collection office in certain situations. Often it is sent to the IRS Office of Appeals. If you are able to resolve the matter, you may withdraw your CDP hearing request. However, if you still disagree with the notice and you are unable to resolve it at this level, your case will be forwarded to Appeals. During the CDP hearing process levy action is not permitted if the request is filed timely.
Appeals will contact you to arrange a conference to discuss your matter. In the Appeals stage you are allowed to request a face-to-face conference. Often times if you or your representatives are proposing a collection alternative, Appeals may request that you provide financial information. If you timely request a CDP hearing, the 10 year statute of limitations the IRS has to collect your taxes will be suspended until Appeals makes a final determination on your case or you withdraw your request for a hearing.
Many of the elements of tax liens, seizure of assets and obtaining relief are subject to critical and strictly enforced time deadlines. If you miss some of these deadlines, you may lose any chance of disputing a tax debt or reversing a tax lien or seizure.