A taxpayer may request a Collection Due Process (CDP) hearing; however, they must meet the following requirements:
- Only the taxpayer may request a CDP hearing, which is based only on the first filing of the Notice of Federal Tax Lien (NFTL) or the first issuance of notice of intent to levy for a tax period;
- The taxpayer must request a CDP hearing within thirty days after the issuance of the CDP Notice;
- The request must be in writing;
- The request must bear:
- the taxpayer’s (or representative’s) signature and the date of the signature;
- the taxpayer’s name, address, daytime phone number, and Tax ID number;
- the type of tax at issue; and
- the tax period(s) at issue;
- The request must state:
- that the CDP request comes as a result of an NFTL or notice of intent to levy; and
- the reason the taxpayer disagrees with the filing of the NFTL or the proposed levy.
The taxpayer must use Form 12153 for the CDP request.
If the taxpayer fails to include all the required information, the IRS can contact him and offer the chance to correct the CDP request. The written request must also include arguments that the taxpayer intends to raise during the CDP hearing. Failure to do so may preclude him from raising it in Tax Court.
Timing of a CDP Request
If the taxpayer submits a CDP request during the five (5)-day period after filing a notice of federal tax lien (NFTL), it will be treated as having been filed on the first day of the thirty-day period.
Note – this page contains general information, not legal advice.
The “timely mailing rule” (26 U.S. Code Section 7502) applies to CDP request mailings. The taxpayer must file the CDP request on or before the due date, complying with the provision. If the due date falls on weekends (Saturday or Sunday) or a legal holiday, the filing on the succeeding day that is not a weekend or legal holiday is considered timely (26 U.S. Code Section 7503).
The taxpayer should send the CDP request to the IRS office listed on the CDP notice.
Suppose the taxpayer sends the CDP request to an incorrect IRS office. In that case, the IRS can object to the timeliness of the request and argue that it fails to meet the criteria provided under the regulation. However, this is not a sufficient basis for denial of CDP relief, provided that the CDP request meets the timeliness rules.
The thirty-day period for filing a CDP request is not extendable for taxpayers outside the United States. The period provided by the regulations seeks to expedite the process of making a determination to get the case back in the collection stream as quickly as possible. Taxpayers outside the United States at the time of the CDP notice may send their requests to the Philadelphia Submissions Compliance Center.
The Effects of Requesting a CDP Hearing
The filing of a CDP hearing request has the effect of suspending the statute of limitations for collection, criminal prosecutions, and the filing of other suits. The suspension starts on the date that the IRS received the CDP request. However, the suspension ends when one of the following events occurs:
- withdrawal of the CDP request by the taxpayer;
- non-filing of a Tax Court petition by the taxpayer in response to the determination letter and the time to file the petition expires; and
- expiration of the time for appellate review or exhaustion of such review by the taxpayer.
When the suspension of the statute of limitations ends, the IRS has the remaining time to pursue the action of not less than ninety days (IRC Section 6330 (e)(1)).
Impact of CDP Request
The filing of a CDP request has a different impact on an NFTL and a notice for a levy. Its effect is more on the movement of the CDP hearing process. Filing a CDP request in response to the notice and opportunity for hearing before levy (under IRC Section 6330) suspends a levy action, which is not the case for NFTL. For NFTL, a request for a CDP hearing does not stop a lien; it continues in full force.
Taxpayers seeking to stop a levy have little incentive for speed since the CDP hearing provides protection from levy. In a way, they have already received what they are seeking, even for a short time. On the other hand, CDP requests following an NFTL filing produce a reverse outcome. Here, the taxpayer wants the NFTL withdrawn as quickly as possible, while the IRS has no incentive for speed since the NFTL provides its full measure of protection when the case awaits resolution.
If the IRS levies the taxpayer’s property pending a CDP hearing, the taxpayer can obtain an injunction to stop the levy. As an exception (IRC Section 6330(e)(1)) under the Anti-Injunction Act, if the taxpayer files a CDP request in response to an NFTL, the IRS may continue with the levy action if it otherwise has the right to levy.