Collection due process hearings: Form 12153 and the 30-day window

Which notices give CDP rights

The Restructuring and Reform Act of 1998 created CDP rights for lien filings (IRC 6320) and levies (IRC 6330). IRM 5.1.9.3.1 describes the purpose: an independent review “to ensure that the levy action that has been proposed or the NFTL that has been filed is warranted and appropriate.” IRM 8.22.4.2.2 lists the notices that carry the right, including:

CP504 is not on the IRM's list; it is a notice of intent to levy that precedes the CDP notice (see CP504). The CDP right attaches once per tax period and type of tax: IRC 6330(b)(2) allows “only one hearing under this section with respect to the taxable period”, and IRM 8.22.4.2.2 applies the right to the first NFTL filed and the first levy notice for a liability. A later NFTL for the same period in another county does not reopen it, but a new NFTL that adds an assessment not shown before carries a hearing right for that assessment. Levies on state tax refunds, jeopardy levies, disqualified employment tax levies and federal contractor levies can be made first, with a post-levy hearing offered afterward (IRC 6330(f)).

The deadline

For liens, the IRS estimates the filing date by adding three business days to the date it mails the NFTL to the recording office, then adds five business days plus 30 calendar days to produce the “must file by” date printed on Letter 3172. A request made early is protected: “Any request filed during the five-business-day period (before the beginning of the 30-day period) will be deemed to be filed on the first day of the 30-day period.” The CDP deadline calculator computes both windows.

Timeliness is measured by receipt in the office listed on the notice, but a timely postmark, meter date, fax transmission date or electronic timestamp counts. If a revenue officer is assigned and the request goes to the officer, timeliness runs from the postmark or the officer's receipt (IRM 5.1.9.3.2.1). Talking to Collection does not stop the clock. IRM 5.1.9.3.2 tells employees: “Be sure to let taxpayers know that discussions with Collection do not suspend the running of (or otherwise extend) the 30-day period during which taxpayers may request a CDP hearing.”

Making the request

The request must be in writing. Form 12153 is the usual vehicle, but any signed written request works if it is dated and contains the items in Treas. Reg. 301.6330-1(c)(2), A-C1(ii), repeated in IRM 5.1.9.3.2(4): name, address, daytime phone and TIN; the type of tax; the periods; a statement requesting a hearing on the levy or the lien; the reasons for disagreement; and the signature of the taxpayer or authorized representative. The form adds a warning in line 8: “Your request will not be honored if you don't provide a reason for the dispute.” Read that with the regulation, which is more forgiving than the form suggests. Under A-C1(iii), when the IRS receives a timely written request that is missing one of the required items, “the IRS will make a reasonable attempt to contact the taxpayer and request that the taxpayer comply with the unsatisfied requirements,” and the taxpayer must then perfect the request within a reasonable time after that contact. IRM 5.1.9.3.3 tells Collection the same: try to perfect an incomplete request with the taxpayer. A missing reason is therefore a curable defect, not an automatic loss of the hearing, but only if the follow-up is answered. A timely request signed by a spouse or someone else without authority can likewise be affirmed by the taxpayer within a reasonable time after the IRS asks (A-C1(v)).

1. Send it to the hearing address on the CDP notice, not the payment address, with a copy of the notice. Form 12153 says the phone number on the notice can be used to confirm the address or fax the request.
2. Check line 1 for lien, levy, or both if both notices were received.
3. Check line 2, the equivalent hearing box. It costs nothing and preserves an equivalent hearing if the CDP request turns out to be late.
4. List the periods in line 7 or attach the notice. The request covers every period on the notice unless the taxpayer excludes one (IRM 5.1.9.3.2(6)).
5. State the reasons in line 8 and the proposed alternative in line 9. A financial statement (Form 433-A or 433-B) is not required with the request, but early submission speeds resolution; DATL offers and installment agreements available online are the stated exceptions.
6. Sign. Either the taxpayer or the representative signs, not both; a representative attaches Form 2848 unless one is on file. Both spouses sign a joint request.

A written attachment that lays out the issues, the alternative proposed and the documents enclosed helps the hearing officer and builds the record the Tax Court will review. Our CDP hearing request attachment template follows the IRM elements. Frivolous positions on the IRS's published list, or requests meant only to delay, can be disregarded in whole or in part (IRM 5.1.9.3.2(4) note). For the line-by-line form, see Form 12153.

What a timely request does

• Levy stops on the CDP periods during the hearing and any court review (IRC 6330(e)). IRM 5.1.9.3.5.1 lists the exceptions: disqualified employment tax levies, state income tax refund levies, federal contractor levies, jeopardy, and levies the court permits during an appeal where the underlying tax is not at issue. Where only one spouse requests a hearing on a joint liability, levy can continue against the other spouse.
• The collection statute is suspended. IRC 6330(e)(1) suspends the levy and the limitations periods under IRC 6502, 6531 and 6532 “for the period during which such hearing, and appeals therein, are pending” and adds the floor: “In no event shall any such period expire before the 90th day after the day on which there is a final determination in such hearing.” Treas. Reg. 301.6330-1(g)(2), A-G1, fixes the start as the date the IRS receives the written request and the end as the date the IRS receives a written withdrawal or the determination becomes final after any judicial review. IRM 5.1.9.3.2.1(4) puts it in plain terms: “A timely filed request for a hearing suspends the statutory period of limitations on collection, criminal prosecutions, and certain suits for the period that is being appealed.” Equivalent hearings do not suspend it (Treas. Reg. 301.6330-1(i)(2), A-I3).
• A lien can still be filed. Form 12153 says a levy hearing request “does not prohibit the IRS from filing a notice of federal tax lien.”

The statute suspension cuts both ways. A request filed to buy time also adds that time to the CSED; see the CSED page before filing near the end of the statute.

Issues you can raise

IRC 6330(c)(2)(A) allows any relevant issue relating to the unpaid tax or the proposed levy, including spousal defenses, challenges to the appropriateness of collection action, and collection alternatives such as a bond, substitution of assets, an installment agreement or an offer in compromise. For lien hearings the same list applies through IRC 6320(c), and NFTL withdrawal is a standard request (Form 12153 line 8).

The underlying liability is narrower. IRC 6330(c)(2)(B): “The person may also raise at the hearing challenges to the existence or amount of the underlying tax liability for any tax period if the person did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability.” Treas. Reg. 301.6330-1(e)(3), A-E2, defines both halves of that rule. Receipt of a notice of deficiency “means receipt in time to petition the Tax Court for a redetermination of the deficiency,” and an opportunity to dispute “includes a prior opportunity for a conference with Appeals that was offered either before or after the assessment of the liability,” except that a pre-assessment Appeals conference on a tax subject to deficiency procedures does not count. In the regulation's Example 3, a TFRP assessee who declined an offered Appeals conference is precluded; A-E7 adds that a taxpayer who received an earlier lien CDP notice for the same period and did not request a hearing has had a prior opportunity. The opportunity must be real: in Mason v. Commissioner, 132 T.C. 301 (2009), the Tax Court held that a responsible person who never received the Letter 1153 offering an Appeals conference had not otherwise had an opportunity to dispute the trust fund penalty and could challenge it in the CDP hearing. Issues raised and considered at a prior hearing or proceeding in which the taxpayer participated meaningfully are precluded (IRC 6330(c)(4)). Penalty relief for reasonable cause can be raised; see reasonable cause.

Raise every issue with Appeals, because the Tax Court will not hear one for the first time on review. In Giamelli v. Commissioner, 129 T.C. 107 (2007), the taxpayer had requested a lien hearing on an unpaid 2001 liability, proposed only an installment agreement, and died while the case was pending; his estate then tried to challenge the underlying liability. The court, relying on IRC 6330(d) and Treas. Reg. 301.6320-1(f)(2), A-F5, held: “We hold today that we do not have authority to consider section 6330(c)(2) issues that were not raised before the Appeals Office.” The rule applies to liability challenges, spousal defenses and collection alternatives alike, so a proposed alternative that was never put to the settlement officer cannot be the basis of a petition.

How the hearing runs

The hearing is held by the Independent Office of Appeals and must be conducted by an officer with no prior involvement with the unpaid tax (IRC 6330(b)(3)). Prior involvement means the same taxpayer, tax and period in a prior non-CDP matter in which the officer actually participated; a prior equivalent hearing or CAP hearing on the same period counts, and the taxpayer can waive the restriction on Form 14041 (IRM 8.22.5.4.1). Contacts between Collection and Appeals are limited by the ex parte rules.

Most hearings are by phone or correspondence after a substantive contact letter sets deadlines. IRM 8.22.5.8.1 tells hearing officers to allow at least 14 calendar days to provide information and at least 21 calendar days to file or amend a return, and warns: “A taxpayer's failure to provide information requested precludes Appeals from considering collection alternatives.” Unfiled returns are the most common reason an alternative is refused. An in-person conference is not offered to taxpayers who are not eligible for the alternative they seek or who keep a frivolous argument (IRM 8.22.5.6.1). If the taxpayer does not participate, a review of the file is the hearing.

Compliance is a precondition for most alternatives. Treas. Reg. 301.6330-1(e)(3), A-E6: “A collection alternative is not available unless the alternative would be available to other taxpayers in similar circumstances.” The regulation's own example (A-D8) is that no offer in compromise will be considered from a taxpayer who has not filed required returns or made required deposits of tax, as Form 656 requires. IRM 8.22.5.6.1.1 carries a table of what each alternative needs: installment agreements and offers require unfiled returns to be filed and current estimated tax payments and federal tax deposits to be made, and the taxpayer is given a chance to become eligible. The exception is hardship: IRM 8.22.5.2.6 notes that a taxpayer “may be eligible to have the case placed in Currently Not Collectible (CNC) status despite compliance issues”; see currently not collectible status.

The determination must address three things under IRC 6330(c)(3): verification that legal and administrative requirements were met, the issues raised, and “whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection action be no more intrusive than necessary.”

Withdrawing the request

A request can be withdrawn at any point before the Notice of Determination or Decision Letter issues, usually because Collection has already granted the alternative; Appeals solicits a withdrawal with Letter 4388 when the only issue was an alternative Collection granted (IRM 8.22.5.2.6). Form 12256, Withdrawal of Request for Collection Due Process or Equivalent Hearing (Rev. 5-2020), is the preferred vehicle, though any clear written request is honored and an equivalent hearing request may be withdrawn verbally. The form spells out what the taxpayer gives up: the hearing, Appeals' verification that legal and administrative requirements were met, the Notice of Determination and with it Tax Court review, and retained jurisdiction. It also states that “The suspension of levy action and the suspension of the statute of limitations on the period of collection, as required under the provisions of IRC Sections 6320 and 6330, are no longer in effect upon the receipt by the IRS of this withdrawal.” CAP rights survive. Two consequences matter in practice: once withdrawn, the taxpayer may not request another CDP hearing on the same tax and periods, and the 90-day floor in IRC 6330(e)(1) still runs from the IRS's receipt of the withdrawal (Treas. Reg. 301.6330-1(g)(1)). A withdrawal can be rescinded orally or in writing before Appeals issues its closing letter.

Determination, Tax Court and retained jurisdiction

Appeals issues a Notice of Determination. Under IRC 6330(d)(1) the taxpayer may petition the Tax Court within 30 days of the determination (see Tax Court petitions); IRM 5.1.9.3.9 notes longer periods where the hearing included innocent spouse relief or interest abatement. A taxpayer who agrees with Appeals can sign Form 12257, which waives judicial review and the levy suspension (IRM 5.1.9.3.10).

The 30-day petition deadline is firm but not jurisdictional. In Boechler, P.C. v. Commissioner, 596 U.S. 199 (2022), a petition filed one day late, the Supreme Court held that the IRC 6330(d)(1) time limit “is a nonjurisdictional deadline subject to equitable tolling,” reversing the Eighth Circuit. Whether tolling is warranted on particular facts is decided case by case, so the holding rescues the rare case, not routine lateness. IRM 8.22.5.3.2 now applies equitable tolling to the 30-day hearing request and the one-year equivalent hearing request as well, requiring diligence and extraordinary circumstances beyond the taxpayer's control.

Standard of review and the record. The Tax Court reviews a properly raised challenge to the underlying liability de novo; Mason, above, is an example, where the trust fund penalty was tried on the merits. Everything else, including the refusal of a collection alternative and the balancing determination, is reviewed for abuse of discretion. Robinette v. Commissioner, 439 F.3d 455 (8th Cir. 2006), reversing 123 T.C. 85, describes both standards from the conference report to the 1998 Act and then holds that abuse of discretion review of a CDP determination is confined to the administrative record made before Appeals, so the Tax Court should not have received new evidence at trial. The Tax Court majority in Robinette had held that it could take new evidence, which is why the question is framed as a circuit-by-circuit one. The Ninth Circuit sides with the Eighth: in Keller v. Commissioner, 568 F.3d 710 (9th Cir. 2009), a consolidated appeal by Hoyt partnership investors whose offers had been rejected, the court refused to consider evidence that was not before Appeals because “our review is confined to the record at the time the Commissioner's decision was rendered,” and it found no abuse of discretion where each offer “was substantially lower than what the RCP calculation showed the Taxpayer could afford to pay,” where the IRS relied on present rather than projected medical expenses, and where computational errors did not change the result. The practical lesson is the same everywhere: put every document and argument in front of the settlement officer before the determination issues, because a court may refuse to look at anything added later.

What abuse of discretion means for a rejected offer. The court does not price the offer itself. In Murphy v. Commissioner, 125 T.C. 301 (2005), aff'd, 469 F.3d 27 (1st Cir. 2006), the settlement officer rejected a $10,000 offer against a liability of $275,777 after computing reasonable collection potential of $82,164 and refused effective tax administration treatment because the taxpayer could not pay in full. The Tax Court sustained her: “We do not conduct an independent review of what would be an acceptable offer in compromise.” Its review “is to determine whether the Appeals officer's decision to reject the offer in compromise actually submitted by the taxpayer was arbitrary, capricious, or without sound basis in fact or law.” The same opinion held that an Appeals officer may both negotiate the offer and rule on it, and that there is no minimum time a hearing must stay open when the taxpayer keeps missing deadlines. A petition that asks the court to accept a better offer than the one Appeals saw, or argues only that the IRS should have been more generous, will fail; the record has to show a mistake of fact, a misapplication of the IRM or regulations, or a refusal to consider what was submitted. See offers in compromise and reasonable collection potential.

Appeals keeps jurisdiction over its determination (IRC 6330(d)(3)). A taxpayer can return to Appeals if Collection does not carry out the determination, or, after exhausting administrative remedies, for a change in circumstances affecting it. The collection statute is not suspended during a retained jurisdiction proceeding (IRM 5.1.9.3.12).

When no CDP right exists or the window is gone, the Collection Appeals Program remains available for liens, levies, seizures and installment agreement actions; CAP cannot be used to determine liability, and its decisions bind both the taxpayer and Collection (IRM 5.1.9.4.1, 5.1.9.4.4).

Equivalent hearings

A taxpayer who misses the 30 days can still ask Appeals for an equivalent hearing under Treas. Reg. 301.6330-1(i). The request must be in writing and made within one year beginning the day after the date of the levy CDP notice; for a lien notice, within one year beginning the day after the end of the five-business-day period following the NFTL filing (A-I7). Form 12153 summarizes it as one year plus five business days from the lien filing date, and its line 2 box asks for the equivalent hearing if the CDP request turns out to be late. Appeals considers the same issues it would have considered in a CDP hearing (A-I2) but closes with a Decision Letter rather than a Notice of Determination. The differences are what the taxpayer loses:

An incomplete equivalent hearing request must also be perfected within a reasonable time after the IRS asks, or it is denied (A-I1(iii)). For the full procedure, see equivalent hearings and the deadline calculator.

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