How CDP Hearings fit into IRS collection

Collection Due Process (CDP) Hearings are an administrative safety valve built into the IRS collection system. Congress added CDP rights under the Taxpayer Bill of Rights 2 and codified the process in Internal Revenue Code §6330. The goal is simple: before the IRS imposes a significant collection action—like a levy on wages or a bank account, or the public filing of a Notice of Federal Tax Lien (NFTL)—taxpayers get a neutral review by the IRS Office of Appeals.

The CDP process matters because it can stop or delay collection, produce alternatives (installment agreement, Currently Not Collectible, Offer in Compromise), or result in withdrawal of an improper lien. In my practice working with taxpayers for more than 15 years, I’ve seen timely CDP requests convert what looks like an inevitable levy into a workable payment plan or relief status—often saving money and protecting assets.

Sources: IRS Publication 1660 (Collection Appeal Rights) and IRC §6330 explain these rights and procedures (see IRS, Pub. 1660).

Who can request a CDP Hearing and when

  • Eligible taxpayers: Individuals, businesses, estates, and fiduciaries who receive an IRS notice of intent to levy or a notice of filing a federal tax lien.
  • Deadline: You must file Form 12153, Request for a Collection Due Process or Equivalent Hearing, within 30 days of the date on the IRS notice to secure CDP rights. That 30‑day window is strictly enforced for an automatic stay on collection activity. If you miss it, you may still seek an Equivalent Hearing or other remedies, but you lose the automatic CDP protections.

Remember: the 30-day clock runs from the date shown on the notice. When in doubt, file Form 12153 immediately and follow up with a certified mail return receipt or an e‑filed submission to preserve your record.

What happens after you file Form 12153

  1. Acknowledgment: The IRS will acknowledge receipt and forward the case to the Office of Appeals.
  2. Stay of collection: If the CDP request is timely, levies are generally stayed and the IRS must suspend certain collection actions while Appeals considers the case. A lien filing may be suspended if requested before the NFTL is filed (see IRS guidance in Pub. 1660).
  3. Appeals review: An Appeals officer will review the file, verify the amount owed (including penalties and interest), and confirm that the IRS followed legal procedures. Appeals looks at three primary areas:
  • Verification that the IRS followed all legal and procedural requirements.
  • Whether the taxpayer has valid challenges to the underlying tax liability (if the taxpayer didn’t get a prior opportunity to dispute liability).
  • Whether proposed collection alternatives are appropriate given the taxpayer’s financial situation.

  1. Hearing (telephone or written): The hearing may be conducted by phone or on a written record; in-person hearings are rare. Taxpayers or their authorized representatives (tax attorneys, CPAs, enrolled agents, or family members with a power of attorney using Form 2848) can present facts, documentation, and collection proposals.

  2. Appeals determination: The Appeals officer issues a written determination. If you disagree with Appeals’ decision, you generally have the right to seek judicial review in the U.S. Tax Court (per IRC §6330(d)).

What Appeals will (and will not) consider

  • Tax liability disputes: If you never had a prior opportunity to dispute the underlying tax liability (for example, you never petitioned the Tax Court for the tax year in question), Appeals may consider challenges to the amount owed. If you already had a forum to dispute liability, Appeals usually limits review to collection procedures and alternatives. (See IRC §6330.)
  • Collection alternatives: Appeals can accept reasonable alternatives including installment agreements, partial-payment plans, Currently Not Collectible (CNC) status, or refer Offers in Compromise to the Collection function. Appeals will evaluate the taxpayer’s financial disclosure to see what is affordable.
  • Procedural errors: Appeals will check that the IRS followed notice requirements and other procedures. If the IRS did not follow required procedures, Appeals may return the case for corrective action.

How to prepare — a practical checklist

Start preparing as soon as you receive the notice. The quality of your documentation shapes the hearing.

Required and recommended items to include with Form 12153 or to have ready for the hearing:

  • Completed Form 12153 (clear statement of facts and specific request).
  • Recent IRS account transcripts (IRS Form 4506‑T or transcripts accessed via IRS online tools).
  • Proof of identity and any power of attorney (Form 2848 if you want a representative to speak for you).
  • A proposed collection alternative (installment agreement terms, Offer in Compromise, or request CNC). If proposing an installment plan, include the monthly payment you can reasonably afford. (See finhelp article on IRS Installment Agreements: Types, Costs, and How to Apply.)
  • Financial documents: pay stubs, bank statements, recent tax returns, proof of regular expenses (rent/mortgage, utilities, child support), and a completed financial statement such as Form 433‑A (individual) or 433‑F.
  • Evidence of hardship or special circumstances (medical bills, unemployment records, divorce decree).
  • Any proof the assessed tax is incorrect: amended returns, records showing credit, or records that refute assessment.

In my practice, a clear, numbered exhibit packet that mirrors your statement to Appeals improves the odds of a successful outcome. Organize documents chronologically and include a one‑page summary for the Appeals officer.

Timing and what to expect during the hearing

  • Format: Most hearings are by phone or by written correspondence. Plan for 30–60 minutes if a telephonic hearing is scheduled.
  • Decision timing: Appeals aims to issue a determination within 30 days after the hearing, but complex cases may take longer. Expect follow-up requests for documentation.
  • Stay of collection: A timely CDP request usually halts levies; if Appeals rejects relief, the IRS may resume collection. If Appeals issues an unfavorable determination, you generally retain the right to judicial review in Tax Court.

Common mistakes and traps to avoid

  • Missing the 30‑day window. Failure to request CDP timely removes the automatic stay.
  • Submitting incomplete financial data. Appeals needs a realistic budget to evaluate CNC or an installment plan.
  • Waiting to consult a professional. Represented taxpayers are more likely to propose workable plans and to avoid procedural missteps.
  • Confusing CDP with other appeal routes. If you want to contest an audit adjustment, you may have separate appeal rights earlier in the process.

Alternatives and follow-ups after CDP

Even if Appeals denies your request, CDP can be a path into another collection solution:

Short, realistic timelines and expectations

  • File Form 12153 within 30 days to preserve CDP rights and get an administrative stay.
  • Expect a hearing scheduling window of 2–8 weeks depending on Appeals’ workload.
  • Typical Appeals determinations may arrive in 30–90 days after the hearing; complex cases or ones requiring financial verification may extend beyond that.

Sample language for Form 12153 (starter template)

Use plain language. Example opening sentence: “I request a Collection Due Process Hearing under IRC §6330 to contest the proposed levy/lien for tax year(s) XXXX because [state reason—e.g., financial hardship / incorrect assessment / pending amended return].” Then list exhibits and the relief requested (installment agreement, CNC, or lien withdrawal).

After the Appeals determination: judicial review

If the Appeals decision is adverse, you generally may petition the U.S. Tax Court for review of the determination under IRC §6330(d). Consult a tax attorney early if you plan to take a case to Tax Court—procedural deadlines are strict and the court’s review focuses on the administrative record.

Practical tips from experience

  • Be proactive: Contact a qualified tax professional as soon as you get the notice. In my experience, early engagement often prevents a bank levy or wage garnishment.
  • Use a financial summary: A concise budget that shows your disposable income simplifies Appeals’ evaluation.
  • Keep records of all communications: note dates, names, and reference numbers.
  • Consider low‑income taxpayer clinics if you qualify; they can provide representation for free or low cost and are familiar with CDP procedures (see Taxpayer Advocate Service resources).

Where to find authoritative guidance

  • IRS Publication 1660, Collection Appeal Rights (current guidance on CDP procedures): https://www.irs.gov/pub/irs-pdf/p1660.pdf
  • Internal Revenue Code §6330 (statutory basis for CDP)
  • Taxpayer Advocate Service resources and local Low Income Taxpayer Clinics for hands‑on assistance.

Professional disclaimer

This article is educational and does not constitute legal, tax, or accounting advice. Your facts matter: consult a qualified tax professional, enrolled agent, or tax attorney for guidance specific to your situation.

If you want, I can draft a one‑page Form 12153 cover letter tailored to your facts or review an exhibit list before you file.