Using the Collection Due Process Hearing to Halt Levies

Quick overview

A Collection Due Process (CDP) Hearing gives taxpayers a formal opportunity to dispute IRS collection actions—most commonly a Final Notice of Intent to Levy—before the IRS proceeds. CDP rights are rooted in the Internal Revenue Code (IRC §§6320 and 6330) and implemented by the IRS. When you file a timely CDP request, the IRS generally must suspend levy or lien enforcement while Appeals reviews the case, with limited exceptions (for example, jeopardy levies). IRS: Collection Due Process (CDP) and Publication 1660 explain the rules in detail.

When a CDP hearing applies

• The IRS sends a Final Notice of Intent to Levy and Notice of Your Right to a Hearing (commonly seen as an LT11 or similar notice). You have 30 days from the date of that notice to request a CDP Hearing. [IRS Pub. 1660]
• CDP rights also apply when the IRS files a Notice of Federal Tax Lien; that notice triggers separate §6320 CDP protections.

Note: If you miss the 30-day CDP window, you can still ask for an “equivalent hearing” with IRS Appeals. An equivalent hearing is discretionary and does not preserve the same independent judicial review rights in U.S. Tax Court that a timely CDP request does. [IRS Pub. 1660]

How a timely CDP request can halt a levy

Filing Form 12153 (Request for a Collection Due Process or Equivalent Hearing) within the 30‑day window typically pauses levy actions while Appeals considers your case. This pause can stop an impending bank levy, wage levy, or other seizure long enough to present hardship facts, request a collection alternative, or raise procedural errors. Exceptions include cases where the IRS determines collection is in jeopardy (jeopardy levies) or certain other limited circumstances—those can proceed even after a request.

Author’s note: In my practice, a timely CDP often buys the breathing room taxpayers need—sometimes the mere filing is enough to prompt more cooperative collection negotiations from the IRS.

Step-by-step: request, prepare, and present

1. Read the notice carefully. Confirm the exact date the 30‑day clock starts. The notice will include instructions and a mailing address for appeals.
2. File Form 12153. You can mail or fax the completed form to the address on the notice. Keep proof of mailing or delivery. [IRS Form 12153]
3. Assemble documentation. Typical items:

• Current bank statements and a recent paystub
• A completed Collection Information Statement (Form 433‑F), or if required, Form 433‑A or 433‑B (business)
• A proposed collection alternative (installment agreement terms, offer in compromise, or request for Currently Not Collectible status)
• Proof of essential monthly expenses (rent/mortgage, utilities, medical) and dependents

1. Consider whether to dispute the underlying liability. Under IRC §6330, you may challenge the underlying tax only if you did not receive a statutory notice of deficiency or otherwise had no prior opportunity to dispute the tax (Tax Court jurisdiction issues can be complex).
2. Participate in the hearing. The Appeals Officer will review IRS file notices and your documentation; you can present facts in writing and/or by phone or in person. The officer must verify the IRS followed required procedures and consider reasonable collection alternatives.
3. Receive the notice of determination. Appeals will issue a written decision that sustains or releases the levy, suggests alternatives, or modifies the action.

Issues you can raise at a CDP hearing

• Procedural defects (the IRS didn’t send required notices)
• Inaccuracies in the assessed tax (where you lacked prior opportunity to dispute)
• Economic hardship and inability to pay
• Requests for alternatives: installment agreement, Offer in Compromise (OIC), or Currently Not Collectible status
• Spousal defenses or innocent spouse issues

Be prepared to present specific dollar amounts and documentation—general statements of hardship without supporting records are less persuasive.

Outcomes and appeals

• Appeals may: release the levy, propose an installment agreement, allow an Offer in Compromise submission, or sustain the levy.
• If you file a timely CDP and Appeals issues an adverse “notice of determination,” you may petition the U.S. Tax Court within 30 days of that determination. That judicial review right is a major benefit of a timely CDP request. (IRC §6330(d); IRS Pub. 1660)
• If you miss the 30‑day window and receive only an equivalent hearing, you generally lose the direct right to seek review in Tax Court. You may pursue other courts later, but the process and remedies differ.

Practical tips and common pitfalls

• Act fast. The 30‑day clock is strict. If you receive a Final Notice of Intent to Levy, calendar the deadline immediately and file Form 12153 even if you are still collecting documents.
• File a Collection Information Statement (Form 433‑F) early. It helps Appeals evaluate whether you qualify for a feasible installment plan or Currently Not Collectible status.
• Propose a realistic solution. If you suggest an installment plan, include a clear payment amount and supporting cash‑flow statements—Appeals favors concrete proposals.
• Don’t conflate an OIC with a CDP request. You can request CDP and concurrently prepare an Offer in Compromise, but OICs require a separate submission and documentation. See our guide on preparing the financial package for an Offer in Compromise for details. (Preparing the Financial Statement for an Offer in Compromise: https://finhelp.io/glossary/preparing-the-financial-statement-for-an-offer-in-compromise/)
• If you have a small business, use Form 433‑B as appropriate and be ready to show business cash flow. For guidance on whether an installment agreement or an OIC makes more sense, see When an Installment Agreement Is Better Than an Offer in Compromise. (https://finhelp.io/glossary/when-an-installment-agreement-is-better-than-an-offer-in-compromise/)

Sample documentation checklist

• Copy of Final Notice of Intent to Levy
• Form 12153 (completed and proof of filing)
• Completed Form 433‑F (or 433‑A/433‑B if instructed)
• Three months of bank statements
• Two months of paystubs or profit/loss statements for a business
• Documentation of monthly living expenses and medical costs
• Any prior IRS correspondence or proof that you lacked opportunity to dispute liability

Timing considerations

There’s no guaranteed clock for Appeals decisions, but many cases are resolved in 30–90 days depending on complexity. While the Appeals process is pending, levies are generally suspended if you filed timely—this can provide crucial short‑term relief. If Appeals issues a decision you disagree with, you must act quickly to preserve judicial review rights.

Real-world example (illustrative)

A small retail owner received a Final Notice of Intent to Levy after a payroll tax assessment. We filed Form 12153 the same week, submitted a completed Form 433‑B with cash‑flow projections, and proposed a short‑term installment plan that matched expected seasonal revenue. Appeals placed the levy on hold, negotiated a six‑month payment plan based on realistic collections, and ultimately released the bank levy while the business recovered.

When a CDP request may not stop a levy

• Jeopardy levies (where collection is in jeopardy) and certain court‑ordered collections can proceed despite a CDP request.
• If the levy has already attached and funds were seized prior to your request, filing CDP may still enable recovery or release, but outcomes depend on timing and facts.

Where to find official guidance

• IRS Collection Due Process (CDP) information: https://www.irs.gov/businesses/small-businesses-self-employed/collection-due-process-cdps
• IRS Publication 1660, Collection Appeal Rights: https://www.irs.gov/pub/irs-pdf/p1660.pdf
• IRS Publication 594, The IRS Collection Process: https://www.irs.gov/pub/irs-pdf/p594.pdf

Final practical checklist (action now)

1. Confirm the deadline on your Final Notice of Intent to Levy. 2. File Form 12153 immediately (keep proof). 3. Start assembling Form 433‑F and supporting documents. 4. Decide whether to dispute the liability or propose a collection alternative. 5. Consider hiring an experienced tax professional—representation can materially improve outcomes in complex cases.

Professional disclaimer
This article is educational and does not constitute legal or tax advice. Rules and procedures can change; consult an enrolled agent, certified public accountant, or tax attorney for case‑specific guidance.

Authoritative sources

• Internal Revenue Service, Collection Due Process (CDP) information and Publication 1660. [irs.gov]
• IRC §§6320 and 6330 (statutory basis for CDP hearings).