Overview

Collection Due Process (CDP) hearings are a statutory protection that gives taxpayers a formal chance to contest certain IRS collection actions—most commonly the filing of a Notice of Federal Tax Lien (NFTL) and the IRS’s intent to levy. Congress created this remedy as part of reforms to strengthen taxpayer protections; the rules are found in Internal Revenue Code sections 6320 (liens) and 6330 (levies) and implemented by the IRS (see IRS CDP page and Form 12153).

Why CDP matters

  • Preserves important procedural and substantive rights when the IRS moves to take or secure assets.
  • When timely requested, it generally suspends levy activity and gives a clear administrative record useful if you later seek court review.
  • Lets you propose alternatives (installment agreements, Offers in Compromise) and raise legal defenses (including spousal defenses and other relevant issues).

Who is eligible

Any individual or business served with a statutory notice that triggers CDP rights can request a hearing. Typical triggers include:

  • A Notice of Federal Tax Lien (NFTL) filing (IRC §6320).
  • A Final Notice of Intent to Levy and Notice of Your Right to a Hearing (IRC §6330).

How to request a CDP hearing (practical steps)

  1. Act fast — 30-day deadline

You must request a CDP hearing within 30 days of the date shown on the NFTL or the Final Notice of Intent to Levy. This deadline is strict: a late request forfeits the statutory CDP protections (the IRS may still offer appeals under other programs, but you lose the expedited CDP route). (See IRS Form 12153 information: https://www.irs.gov/forms-pubs/about-form-12153)

  1. Use Form 12153

Complete and submit Form 12153 (Request for a Collection Due Process or Equivalent Hearing). If you are represented, include Form 2848 (Power of Attorney). Keep copies and get proof of mailing or use electronic submission options where available. (IRS Form 12153 page: https://www.irs.gov/forms-pubs/about-form-12153)

  1. Prepare a financial package

Gather pay stubs, bank statements, recent tax returns, a completed Collection Information Statement (Form 433‑A, 433‑B, or the appropriate substitute), and documentation supporting any hardship claims. If you plan to propose an Offer in Compromise (OIC), use a clear financial statement — see our guide on Preparing the Financial Statement for an Offer in Compromise for practical documentation tips.

What happens at the hearing

An independent IRS Appeals officer conducts the CDP hearing. By law the officer must:

  • Verify that the IRS followed all applicable legal and procedural requirements (verification of non-duplication of payments, proper notices, assessment correctness is usually presumed but can be challenged).
  • Consider any issues the taxpayer raised, including spousal defenses and collection alternatives.
  • Consider whether the proposed collection action is appropriate under the circumstances.

The officer can propose or approve collection alternatives such as an installment agreement or refer an offer in compromise for acceptance. If the officer upholds the IRS action, the taxpayer will receive a written determination explaining the decision and options for judicial review.

Judicial review: U.S. Tax Court

If you receive an adverse CDP determination, you generally have 30 days to petition the U.S. Tax Court for review under IRC §6330(d). Tax Court review is limited to the issues raised in the CDP hearing, and the court will review the Appeals officer’s factual determinations for abuse of discretion (with some legal questions reviewed de novo). Petitioning Tax Court preserves judicial review rights; if you do not timely file a petition you may lose that option.

How CDP interacts with common collection alternatives

  • Installment agreements: You can propose an installment plan during CDP; if appropriate, Appeals may approve a monthly payment schedule. For general guidance on when an installment agreement is more practical than an OIC, see our article When an Installment Agreement Is Better Than an Offer in Compromise.

  • Offer in Compromise (OIC): An OIC can be proposed during a CDP hearing; you should present a strong financial package. See Preparing the Financial Statement for an Offer in Compromise and Preparing a Strong Financial Package for an Offer in Compromise for documentation templates and evaluation tips.

Real-world examples (practice-based insights)

In my practice, a timely CDP request often changes outcomes by creating a formal record and forcing the IRS to review alternatives. For example:

  • Case A: A self-employed taxpayer facing a levy used a CDP hearing to show temporary cash-flow issues and proposed a short-term installment plan. Appeals approved a manageable payment arrangement and halted the levy, avoiding wage garnishment.

  • Case B: A taxpayer missed the 30-day window and later tried to raise the same issues. Without the CDP record, the taxpayer lost the expedited right to stay collection and had to rely on less predictable IRS collection appeal channels.

Common mistakes and how to avoid them

  • Missing the 30‑day deadline: Treat the date on the notice as a legal deadline, not a suggestion. File Form 12153 immediately and confirm receipt.

  • Underpreparing documentation: Appeals officers expect specific financial detail. Bring a completed collection information statement and supporting documents.

  • Not using representation smartly: A tax attorney or CPA experienced in collections can streamline the hearing, ensure relevant issues are raised, and prepare the strongest package for alternatives like an OIC.

What the Appeals officer will not do

  • Re-decide the underlying tax liability if the tax was not previously assessed or if the taxpayer previously had a full Tax Court hearing on the same tax period. In many cases the existence of a prior valid assessment is presumed; your ability to litigate liability at CDP is limited, except to the extent you did not previously have a chance to challenge the underlying liability.

Practical CDP checklist

  • Check the notice date and mark the 30-day deadline.
  • Complete and file Form 12153 (include Form 2848 if represented).
  • Prepare a Collection Information Statement (Form 433‑A, 433‑B, or equivalent).
  • Compile pay stubs, bank statements, recent tax returns, and documentation of unavoidable expenses.
  • Identify preferred collection alternatives (installment agreement, OIC, currently not collectible) and be ready to explain why they are appropriate.
  • Request written confirmation of receipt and keep all correspondence.

Frequently asked questions

1) Does filing a CDP request stop the IRS from levying my bank account right away?
Filing a timely CDP request generally prevents the IRS from levying while the CDP hearing is pending. However, exceptions and procedural nuances can apply. Always confirm the immediate effect with the Appeals office and your representative. (IRS CDP overview: https://www.irs.gov/collections/collection-due-process-cdp)

2) Can I raise an Offer in Compromise during a CDP hearing?
Yes. An OIC can be proposed and the Appeals officer may consider it. Providing a complete financial package improves the chance that Appeals will accept or at least recommend acceptance. See Preparing the Financial Statement for an Offer in Compromise for details.

3) Can someone else represent me at the CDP hearing?
Yes. You can be represented by an attorney, CPA, or an enrolled agent. File Form 2848 to give formal authority and ensure Appeals communicates with the representative.

Authoritative sources and further reading

Internal resources (examples and templates)

Professional disclaimer

This article explains the Collection Due Process procedures and related taxpayer rights for educational purposes only. It is not legal or tax advice for a specific situation. For case-specific guidance, consult a licensed tax professional (CPA, enrolled agent, or tax attorney) and consider representation for CDP hearings.

Final note

CDP hearings can be the difference between losing property and negotiating a workable repayment plan. The rules are technical and deadlines are strict — if you receive a lien or levy notice, act promptly, gather full documentation, and consider professional representation to preserve your rights.