Quick overview
Collection Due Process (CDP) is the formal process the IRS uses to give taxpayers a chance to contest collection actions—specifically a Notice of Intent to Levy and a Notice of Federal Tax Lien. CDP requests pause certain enforced collection actions and start an independent review by the IRS Office of Appeals. If you file timely, you also preserve the right to take an unfavorable Appeals decision to the U.S. Tax Court (see IRS guidance for procedures) IRS: How to Dispute a Tax Liability and IRS: Publication 594.
Why CDP matters
A levy can seize wages, bank accounts, or other property. A federal tax lien can attach to property and affect credit and selling or refinancing real estate. CDP is often the taxpayer’s best first line of defense because:
- It stops or delays certain collection actions while Appeals reviews your case.
- It gives you a formal chance to challenge liability, request collection alternatives (installment agreement, currently not collectible status, Offer in Compromise), or ask for lien withdrawal.
- A timely CDP preserves your right to go to U.S. Tax Court if Appeals declines relief.
Step-by-step: How to request CDP (practical checklist)
- Read the notice carefully. Look for language such as “Notice of Intent to Levy” or “Notice of Federal Tax Lien” and the deadline to request a CDP hearing. The deadline is generally 30 days from the date on the notice.
- Prepare your request. You can request a CDP hearing by:
- Following instructions on the IRS notice (often a checkbox or return envelope), or
- Submitting a written request to the address shown on the notice, clearly stating you want a Collection Due Process hearing.
- Include your identifying information: name, taxpayer identification number (SSN or EIN), the tax years at issue, and a daytime phone number.
- Assemble documentation to support your position: tax returns, receipts, bank statements, cancelled checks, bookkeeping records, contracts, and correspondence that prove your facts or show collection alternatives.
- If you authorize a representative (attorney, CPA, enrolled agent), file Form 2848, Power of Attorney and Declaration of Representative, or include a signed statement of authorization.
- Mail or fax the request promptly and keep proof of delivery. Date stamps, certified mail receipts, or tracking numbers matter.
In my practice I see many taxpayers delay because they assume they “owe” the levy or that appeals are only for large cases. Timely filing and clear documentation often change outcomes.
What happens after you request CDP
- Appeals assigns an Appeals officer who will contact you to schedule the hearing. The hearing can be in person, by phone, or by correspondence.
- The Appeals officer is separate from revenue officers who handled collections; the Appeals office reviews the case and any collection alternatives.
- If you requested CDP within the 30‑day window, the IRS generally suspends the proposed levy while Appeals considers the request. (See IRS guidance for details: How to Dispute a Tax Liability).
Key issues you can raise in a CDP hearing
- Doubt as to liability: You disagree that you owe the tax for the identified periods.
- Doubt as to collectibility: You cannot pay now and need relief such as Currently Not Collectible (CNC) status or an installment agreement.
- Alternate collection methods: Propose an installment agreement, Offer in Compromise, or lien withdrawal.
- Procedural errors: The IRS did not follow required procedures before issuing the notice.
Be specific. For example, if you claim certain expenses were deductible, provide supporting invoices, bank records, or client contracts. If arguing inability to pay, bring a current budget and proof of monthly income and unavoidable expenses.
Outcomes you can expect
- Full relief: Appeals determines the tax is not owed and the Notice is withdrawn.
- Partial relief: Liability is reduced or an alternate collection plan (installment agreement, OIC) is approved.
- No relief: Appeals upholds the collection action; you may receive a determination letter explaining your rights to petition the U.S. Tax Court.
- Lien withdrawal: In limited cases, Appeals may withdraw a tax lien.
If Appeals denies relief and you requested CDP timely, you generally have 30 days after the determination to file a petition with the U.S. Tax Court. If you missed CDP’s 30‑day window and later request an equivalent hearing, you usually do not get the right to go to Tax Court; your only further IRS remedy is an administrative appeal [IRS: Collection Due Process and Equivalent Hearing].
How CDP differs from an Equivalent Hearing
An equivalent hearing is available if you miss the 30‑day CDP deadline. Appeals may still review the case, but you forfeit certain protections — most importantly, the right to seek review in U.S. Tax Court following Appeals’ decision.
When to involve a tax professional
- Complex factual disputes (e.g., large business deductions, related‑party transactions).
- High-dollar liability or liens that threaten real estate transactions.
- Negotiating Offers in Compromise (see internal guidance on offers in compromise and filing procedures).
Useful internal reads from FinHelp:
- Offers in Compromise: How to Settle Your Tax Debt for Less — https://finhelp.io/glossary/offers-in-compromise-how-to-settle-your-tax-debt-for-less/
- Filing an Offer in Compromise: Eligibility, Process, and Tips — https://finhelp.io/glossary/filing-an-offer-in-compromise-eligibility-process-and-tips/
In my experience over 15+ years, experienced representation often prevents avoidable errors (misfiled forms, missing supporting docs, awkward negotiation positions) that reduce the chance of a favorable settlement.
Documentation checklist (what to bring to a CDP hearing)
- IRS notices and correspondence.
- Signed copies of the tax returns at issue.
- Proof of income: pay stubs, 1099s, bank deposits.
- Proof of expenses: receipts, canceled checks, invoices.
- Current budget (monthly income and necessary living expenses).
- Statements showing assets and liabilities (bank statements, mortgage statements, vehicle titles).
- Form 2848, if you have a representative.
Common mistakes to avoid
- Missing the 30‑day deadline. If you miss it, file an equivalent hearing immediately and prepare for a narrower remedy.
- Failing to send proof of delivery. Keep records of certified mail or tracking numbers.
- Relying on vague statements instead of hard documentation. Say what supports each claim.
- Waiting until a levy has already removed funds. File and act early.
Real-world example (anonymized)
A freelance designer received a Notice of Intent to Levy for tax years with reported mismatches between bank deposits and 1099 income. We requested CDP within 20 days, supplied reconciled bank statements, invoices showing client payments, and copies of amended returns showing corrected deductions. Appeals accepted the reconciled records, reduced the alleged liability, and approved an affordable installment agreement for the remaining balance. The levy was released during the Appeals review.
After Appeals: Tax Court and next steps
If Appeals issues an adverse determination and you filed timely for CDP, you have a limited window (usually 30 days) to petition the U.S. Tax Court. The Tax Court is a specialized federal court that hears disputes between taxpayers and the IRS and can rule on both liability and collection matters arising from CDP cases.
When CDP may not be the right path
- Innocent spouse or relief from joint liability claims typically follow separate procedures.
- If you simply need installment relief and can negotiate directly with the collection division, consider speaking with a revenue officer — but be cautious: a formal CDP preserves broader rights.
Frequently asked practical questions
Q: Can I stop a levy once it has started?
A: A timely CDP request generally suspends the levy process. If the levy already occurred, you can seek release of levy if the levy is creating economic hardship or is abusive; documentation and fast action are required.
Q: How long does Appeals take?
A: Timing varies. Many simple cases resolve in weeks to a few months; complex cases can take longer. Keep records of all communications.
Q: Do I need to pay to request CDP?
A: No. Requesting a CDP hearing is free, though you may choose to hire paid representation.
Authorities and further reading
- IRS — How to Dispute a Tax Liability: https://www.irs.gov/individuals/how-to-dispute-a-tax-liability
- IRS — Publication 594, The IRS Collection Process: https://www.irs.gov/pub/irs-pdf/p594.pdf
- IRS — Collection Due Process (CDP) and Equivalent Hearing (search the IRS site for the latest procedural page)
Professional disclaimer
This article is educational and not individualized legal or tax advice. For help with a specific CDP case, consult a qualified tax attorney, CPA, or enrolled agent. If you want to authorize a professional to act on your behalf, use IRS Form 2848 or follow the authorization instructions on the IRS notice.
