Equivalent hearings: the one-year window after a missed CDP deadline

What an equivalent hearing is

An equivalent hearing (EH) is the administrative Appeals hearing the regulations give a taxpayer who did not timely request a CDP hearing. IRM 8.22.4.3 tells Appeals officers: “In an EH, follow the same procedures and consider the same issues as a CDP hearing.” The regulations say the same in Treas. Reg. 301.6330-1(i), A-I2: “In an equivalent hearing, Appeals will consider the same issues that it would have considered at a CDP hearing on the same matter.” That means collection alternatives, appropriateness of the lien or levy, spousal defenses and, where there was no prior opportunity, the underlying liability can all be raised. See collection due process hearings for the issues and how the hearing runs.

An EH exists only where a CDP notice was issued. A taxpayer who never received a Letter 3172 or a pre-levy CDP notice for the period, or who already had a CDP hearing on it, is not entitled to either, and IRM 5.1.9.3.2(6) directs Collection to explain other options such as the Collection Appeals Program.

The one-year deadline

Form 12153 states the windows in plain terms: lien notice, one year plus five business days from the filing date of the lien; levy notice, one year from the date of the CDP levy notice. The timeliness rules mirror CDP: timely mailing to the office on the notice is timely filing; when the postmark is illegible or the envelope is missing, Collection estimates normal mail time; a deadline falling on a weekend or federal holiday moves to the next business day; and fax or electronic transmission dates count as receipt (IRM 5.1.9.3.2.2(6) and (8)). The regulations apply IRC 7502 and 7503 (A-I8).

IRM 8.22.4.3 is blunt about the end point: “If a taxpayer does not request an EH within the prescribed time, the taxpayer forgoes the right to an EH.” Requests postmarked after the year go to Appeals for a separate timeliness determination, and if Appeals agrees they are late the taxpayer is pointed to CAP or the Taxpayer Advocate Service. The one exception is equitable tolling: IRM 8.22.5.3.2 says the one-year EH deadline, like the 30-day CDP deadline, is subject to equitable tolling where the taxpayer proves diligence and extraordinary circumstances beyond their control.

The CDP deadline calculator shows the CDP and EH dates side by side.

How to request it

A late CDP request does not become an EH by itself. IRM 5.1.9.3.2.2(4): “Late CDP hearing requests are not automatically treated as EH requests.” The taxpayer requests an EH in one of three ways:

1. Check the Equivalent Hearing box (line 2) on Form 12153. This is the cleanest route and should be checked on every request, timely or not, as a fallback.
2. Confirm verbally that an untimely CDP request should be treated as an EH when Collection calls about the late request.
3. Say so in writing on or with the request.

When a late request does not ask for an EH, Collection must contact the taxpayer and explain the option, including “That a CDP hearing and an EH are substantially the same, but there is no judicial review of an EH”, and that the taxpayer can challenge the untimeliness finding in the hearing (IRM 5.1.9.3.2.2(5)). If the original CDP request was mailed within the year, the EH request is timely even if the taxpayer's confirmation comes after the year ends, provided it is made within the time Collection specified (IRM 5.1.9.3.2.2(7)).

The written request has the same content requirements as a CDP request (Treas. Reg. 301.6330-1(i), A-I1): it must be dated and signed, identify the taxpayer, the tax and periods, contain “A statement that the taxpayer is requesting an equivalent hearing with Appeals concerning the levy” (or the lien), and state the reasons for disagreement. A request signed by a spouse or an unauthorized representative must be affirmed by the taxpayer within a reasonable time. Send it to the office and address on the CDP notice (A-I10); living abroad does not extend the year: “All taxpayers who want an equivalent hearing must request the hearing within the one-year period commencing the day after the date of the CDP Notice issued under section 6330.” (A-I9). See Form 12153 and our hearing request attachment.

How Collection and Appeals process the request

The request goes first to the Collection function that issued the notice, and that is where the timeliness call is made. IRM 5.1.9.3.2.2 has Collection compare the postmark or receipt date with the one-year window and, if the request is late but asks for an EH, forward it to Appeals as an EH. When a late request does not ask for an EH, IRM 8.22.5.3.1.2 is clear about what the taxpayer has to do: “The taxpayer must affirmatively respond to Collection in order to be entitled to an EH.” The response can be verbal, Collection documents it, and no second Form 12153 is needed. Under IRM 8.22.4.4, Collection may keep working the case with a willing taxpayer for up to 90 days before sending it on, so a representative who wants Appeals involved quickly should say so. The file goes to Appeals with a transmittal (Form 14461 from a revenue officer, Form 12153-B from ACS), the request and envelope, the CDP notice, the Form 2848, any financial statement and the correspondence. The transcript shows how Collection classified the request: a timely CDP request gets a TC 520 that suspends the statute, while “The CSED is not suspended during an EH case, so a TC 971 AC 278 is entered onto each EH tax period.”

Appeals then makes its own timeliness determination. When the CDP request was late and no EH was requested, or the EH request itself was late, the case is carded as a CDP timeliness determination (CDPTD) rather than a hearing, and IRM 8.22.5.9 says an “Appeals Account Resolution Specialist (AARS) works and closes CDPTD requests within five workdays of assignment.” A tolling argument changes the track: the case is reassigned to a settlement officer, and the taxpayer does not need the right words. IRM 8.22.5.9: “Any reasons given to support the CDP request being considered timely or that the request should be entitled to judicial review constitutes raising equitable tolling.” If Appeals finds the CDP request was in fact timely, the EH feature code is removed and a TC 520 is input as of the submission date; if only the EH is timely, the TC 971 AC 278 stays (IRM 8.22.5.3.2.2). The substantive contact letter in an EH tells the taxpayer that they “may appeal to the appropriate court if you disagree with our decision that your hearing request was late” (IRM 8.22.5.3.1.2), which is the hook for the third judicial exception described below.

Levy is where the process differs from CDP. Because the statute keeps running, IRM 8.22.4.4 lets Collection levy during an EH when collection is at risk, only frivolous issues are raised, or an agreement is requested solely to delay, but it must first check with Appeals: “In such instances, Collection contacts the hearing officer's ATM by secure e-mail to advise levy action is planned and asks whether Appeals has information that may affect the decision to levy.” The Appeals team manager answers within five days, and a hardship finding or a legal bar to levy stops it, so give the settlement officer the hardship facts early.

The closing document is a Decision Letter. Treas. Reg. 301.6330-1(i), A-I5, says it “will generally contain the same information as a Notice of Determination,” and A-E8 lists that content: verification of legal and administrative requirements, the issues raised, any spousal defense, the appropriateness of the collection action, the balancing test, and “it will respond to any offers by the taxpayer for collection alternatives”. The closing paragraph says the taxpayer may not seek judicial review of most issues. When timeliness is disputed, Exhibit 8.22.5-1 has Appeals retain the paper files used in the decision with the case, because that record is what a court would review.

How it differs from a CDP hearing

On levy, Treas. Reg. 301.6330-1(i), A-I4 says: “Collection action is not required to be suspended.” In practice, IRM 8.22.4.3(4) says levy is generally suspended as a matter of policy on the EH periods and on certain related periods, but because the statute keeps running Collection may decide to levy anyway, particularly when collection is at risk, the taxpayer is pyramiding or dissipating assets, the issues are frivolous, or an alternative is being requested solely to delay (IRM 5.1.9.3.5.1(3)). A lien can be filed during an EH.

The statute difference is the one practitioners most often miss, and it can help the taxpayer. IRM 5.1.9.3.2.2(1): “CSED's are not suspended during an EH.” An EH filed near the end of the collection period does not extend it unless the request also includes another basis for suspension, such as an innocent spouse claim under IRC 6015 (IRM 5.1.9.3.6(2)). The IRM's own example shows a request covering two Form 941 quarters getting a CDP hearing with suspension on the newer quarter and an EH with no suspension on the older one. Check the CSED with the statute date calculator and read what suspends the CSED.

An EH also counts as prior involvement. IRM 8.22.5.4.1(3) treats an EH as a non-CDP matter, so an Appeals officer who handled an EH on a period cannot hear a later CDP hearing on the same period without a waiver on Form 14041.

When a court can still review it

Treas. Reg. 301.6330-1(i), A-I6: “Section 6330 does not authorize a taxpayer to appeal the decision of Appeals with respect to an equivalent hearing.” IRM 8.22.4.3(5) and IRM 5.1.9.3.9(3) identify three exceptions:

• Spousal relief under IRC 6015, if a petition is filed within 90 days of the denial (see innocent spouse relief).
• Interest abatement under IRC 6404(h), within 180 days of the denial (see interest abatement).
• Timeliness: the taxpayer disagrees with Appeals' finding that the CDP request was untimely, or claims the deadline should be extended by equitable tolling.

The Tax Court drew the line early. In Kennedy v. Commissioner, 116 T.C. 255 (2001), the taxpayer requested a hearing late, Appeals granted an equivalent hearing and issued a decision letter, and the taxpayer petitioned anyway. The court dismissed for lack of jurisdiction because the decision letter “was not, and did not purport to be, a determination letter pursuant to section 6320 or 6330,” and it rejected the argument that holding the EH waived the deadline: “we hold that the decision to conduct an equivalent hearing did not result in a waiver by respondent of the time restrictions within which petitioner was required to request an Appeals Office hearing under section 6330.” So an EH, however thorough, does not create a route to court on the merits.

The label does not control when the request was actually timely. In Craig v. Commissioner, 119 T.C. 252 (2002), the taxpayer's CDP request was timely but Appeals mistakenly held an equivalent hearing and issued a decision letter. The court held it had jurisdiction, reasoning that “the different names which are assigned to these documents are merely a distinction without a difference when it comes to our jurisdiction over this case, where a Hearing was timely requested,” and it then reviewed the decision as a determination under IRC 6330(d)(1). That is why the third exception gives weight to the timeliness record. If there is any argument that the original request was timely (a postmark, a fax confirmation, a request sent to an assigned revenue officer) or that tolling applies, raise it in writing at the start so it is in the administrative record, and petition within 30 days of the decision letter if you intend to contest timeliness.

Choosing between an EH, CAP and a direct request

Once the CDP window has closed, the realistic options are an EH, a CAP appeal, or a direct request to Collection for an alternative.

An offer in compromise or installment agreement proposal can be made in an EH, and the Decision Letter will describe any agreement and the consequences of not complying (IRM 5.1.9.3.9(4)). For a client already in Appeals on an EH, keep filing and payment compliance current: Appeals applies the same rule as in CDP, and missing returns or financial information will defeat an alternative.

Questions practitioners ask