What the letter means
IRM 5.12.6.3.5: “Letter 3172, Notice of Federal Tax Lien Filing and Your Rights to a Hearing Under IRC 6320, is used to notify taxpayers of their CDP rights regarding NFTL filings.” The statutory lien arises from the unpaid assessment (IRM 5.12.6.3 refers to these as IRC 6321 assessment liens); the Notice of Federal Tax Lien (NFTL) gives public notice to creditors. The letter lists the tax periods, types of tax, assessment dates and unpaid balances shown on the NFTL, and encloses a copy of the NFTL (Form 668(Y)(c)), Publication 594, Publication 1450 (how to request a certificate of release), Publication 1660 and Form 12153.
The CDP right attaches to each tax period the first time it appears on a filed NFTL, and again for any additional assessment not shown on an earlier NFTL. IRM 5.12.6.3.5 says no Letter 3172 issues for refiled NFTLs, for new interest and penalty accruals on periods already noticed, or for an NFTL in another jurisdiction covering periods already noticed.
Why the client got it
An assessed balance stayed unpaid after notice and demand, and the IRS decided to file an NFTL with the local recording office. Lien filings often follow the balance due notice stream (CP14, CP504 or CP504B) or a revenue officer's determination. See federal tax liens for filing criteria and the routes to withdrawal, discharge and subordination.
IRC 6320(a)(2) requires the notice to be given in person, left at the home or business, or sent by certified or registered mail to the last known address “not more than 5 business days after the day of the filing of the notice of lien.” For a joint liability, IRM 5.1.9.3.1 says each spouse is sent a separate letter, in separate envelopes, even at the same address.
Deadlines and what happens if they pass
The hearing request window is defined by IRC 6320(a)(3)(B): “the 30-day period beginning on the day after the 5-day period described in paragraph (2).” Because the five days are business days counted from the filing date, the deadline is not 30 days from the letter date. The IRM gives a sense of the mechanics: the NFTL is treated as filed on the date it should reach the recording office, and in its example an NFTL mailed to the recorder on Friday, September 6, 2024 requires the CDP notice by Wednesday, September 18, 2024. Use the deadline printed on the letter and do not count from the date it arrived.
| Request | Deadline | Result |
|---|---|---|
| Timely CDP hearing | The date on Letter 3172 (30-day period after the five-business-day period) | Appeals hearing; Tax Court review of the determination; collection statute suspended |
| Equivalent hearing | “Within the one-year period commencing the day after the end of the five-business-day period following the filing of the NFTL” (IRM 5.1.9.3.2.2) | Appeals hearing with a decision letter; generally no Tax Court review |
| Collection Appeals Program | Available for lien actions; see Publication 1660 | Faster Appeals review, no judicial review |
A late request is not automatically an equivalent hearing; IRM 5.1.9.3.2.2 says the taxpayer can check the equivalent hearing box on Form 12153, confirm verbally, or ask in writing. Checking the box on the original request protects the fallback. The CDP deadline calculator and equivalent hearings page cover both clocks.
How to respond
- Authorization. A Form 2848 for each tax period on the letter.
- Find the deadline on the letter and calendar it. If the letter is missing, IRM 5.1.9.3.1 says Collection can provide a duplicate from the Automated Lien System marked “duplicate.”
- File Form 12153 with the office on the letter, by the deadline, with proof of mailing. State the issues: collection alternatives (installment agreement, offer in compromise, currently not collectible), lien withdrawal, subordination or discharge, and spousal defenses. IRM 5.12.6.3.1 says the taxpayer “may raise any non-frivolous issue relating to the unpaid tax.” See the CDP request attachment template.
- Check the equivalent hearing box in case the request is found untimely.
- Prepare the collection alternative. Appeals will want current financial information: Form 433-A or 433-F, filed returns and current estimated payments or deposits.
- Separately, consider whether the client needs a lien release, discharge or withdrawal for a pending transaction; those requests can run alongside the hearing.
What the IRS does next
A timely request goes to the Independent Office of Appeals, which must verify that the legal and procedural requirements for the NFTL filing were met and consider the issues raised. IRM 5.12.6.3.4 says that for a timely request, the collection statute is suspended from the date the request is received until the determination becomes final, and “the period of limitation for collection will not expire before 90 days after a determination becomes final.” Under IRM 5.12.6.3.3, “the taxpayer has 30 calendar days from the date of the notice of determination by the appeals officer to file a petition with the U. S. Tax Court.” If no hearing is requested, the lien stays of record until the balance is paid, the collection period ends or the IRS releases it. See CDP hearings.
Related notices
| Notice | CDP right |
|---|---|
| Letter 3172 | Lien filing (IRC 6320) |
| LT11 / Letter 1058 | Proposed levy (IRC 6330) |
| CP90 / CP297 | Final notice of intent to levy (IRC 6330) |
| CP92 / CP242 | Post-levy notice after a state refund levy |
Questions practitioners ask
Is the deadline 30 days from the date on the letter?
No. It is the 30-day period beginning the day after the fifth business day after the lien was filed. The letter prints the date; use it.
We missed the CDP date. What is left?
An equivalent hearing within one year after the end of the five-business-day period, the Collection Appeals Program, and direct requests for withdrawal, discharge or subordination. An equivalent hearing generally has no Tax Court review.
Can the CDP hearing get the lien withdrawn?
Withdrawal can be raised in the hearing. Whether Appeals grants it depends on the IRC 6323(j) grounds; see the federal tax liens page.
Does a CDP request release the lien?
Requesting a hearing does not by itself release the NFTL; release, withdrawal or subordination are separate outcomes the hearing can address. A timely request does suspend the collection statute.
Both spouses got a letter. Do they each need to file?
Each spouse has a separate CDP right and should file a request if both want a hearing.