Updated April 2025
A CDP Hearing Lets You Protest Collections and Request Options
Taxpayers have the right to appeal certain IRS actions – if the IRS threatens to issue a tax lien, levy your assets, or take other collection actions, you can appeal by filing form 12153 to request a Collection Due Process hearing.
You only have 30 days to request a hearing. If you miss the deadline, the IRS may move forward with the collection action. However, you still have up to a year to request an equivalent hearing. This post outlines what you need to know about CDP hearings. To get help now, contact us at Wiggam Law today.
Key takeaways:
- CDP hearings let you protest liens and levies and request payment arrangements or hardship status.
- To apply, file Form 12153 and supporting documents if needed.
- You qualify for a CDP hearing for 30 days after receiving a Final Notice of Intent to Levy with Your Right to a Hearing or a Notice of Federal Tax Lien.
- If you miss the deadline, you can request an equivalent hearing.
- You can appeal to the U.S. Tax Court if you disagree with the results of the CDP hearing but not the equivalent hearing.
Why Request a Collection Due Process Hearing?
The primary reason for requesting a collection due process (CDP) hearing is to prevent an IRS tax levy or lien. These hearings are relatively informal and offered through the IRS Independent Office of Appeals. CDP hearings can occur in person or over the phone, but telephone conference hearings are more common.
One of the benefits of having a CDP hearing is to get an IRS employee (often a settlement officer) with no prior involvement in your case to examine your tax issue. This “fresh set of eyes” can sometimes make a positive difference in how the IRS continues its collection activities with you.
You’ll most likely make one of two arguments during the CDP hearing.
Appealing your tax liability due
The first argument relates to whether you should pay all or part of the tax debt. For example, you might contest the penalties that were added to your overall tax bill, or you might claim you already paid this particular tax debt, but the IRS didn’t apply your payments properly. Note you can generally only appeal the tax liability itself during the CDP hearing if you have not previously had a chance to do so.
You may also request innocent spouse relief if you feel the tax liability should be due exclusively to your spouse. This program requires strict application criteria.
Resolving your tax liability through payments or a settlement
The second argument concedes your tax liability and instead focuses on how or if you should pay your tax balance. This usually means outlining payment arrangements, such as the following:
- Installment agreement – make monthly payments on the tax debt for six years or even longer in select cases.
- Currently not collectible status – prove that you cannot afford to pay, so the IRS temporarily stops collection actions.
- Offer in compromise – establish that you can only afford to pay a portion of the bill and get the IRS to agree to a lump sum settlement or a settlement paid in 24 installments.
Another reason to request a CDP hearing is to use it to apply for a doubt-as-to-liability offer in compromise (OIC). Applying for this type of OIC along with a CDP hearing can offer slightly improved chances of success because you can appeal the CDP hearing decision to the U.S. Tax Court if the IRS denies your OIC request. No such appeal rights exist when applying for an OIC by itself.
Requesting an OIC based on doubt as to liability requires a strong understanding of tax law. Add the fact that there’s the additional legal strategy of when to request an OIC, and it’s easy to understand why hiring a tax professional well-versed in the tax code can be critical in these situations.
When to Request a Collection Due Process Hearing
You should request a CDP hearing if the IRS has threatened collection action against you and sent a Final Notice of Intent to Levy With Your Right to a Hearing. This letter explains the proposed collection actions and states that you have 30 days to request a hearing.
The IRS sends two notices that start the 30-day window to request a collection due process hearing: Letter 1058 (also known as an LT11 notice) and Letter 3172 (also known as a Notice of Federal Tax Lien).
If you have unpaid taxes, you will typically receive several letters, such as the CP14, CP501, CP503, and CP504, before you get the final notice. All of these notices mention the IRS’s ability to take your assets, but they do not mention your right to a hearing. The IRS will seize your state tax refund once it sends you CP504, but the agency must send you another notice before taking any other assets.
How to Request a Collection Due Process Hearing
To request a CDP hearing, file IRS Form 12153, Request for a Collection Due Process or Equivalent Hearing. The form itself is fairly basic as far as IRS forms go, but you need to be aware that you may need to include additional information along with it.
To complete the form, you need basic information about yourself (name, tax ID, current address, phone number, etc) and the tax due (type of tax, tax form number, and tax period). At the top, note if you’re requesting a hearing due to a federal tax lien, a levy, or both. Then, in the middle of the form, select one of the following reasons to explain why you’re requesting a hearing:
- You’re not liable for the tax.
- You want to claim innocent spouse relief
- The taxes were discharged in bankruptcy
- You made payments that weren’t credited
- You want the tax lien withdrawn.
- You can’t pay due to financial hardship.
- You’d like to discuss a collection alternative.
You can also write in your own reason or attach sheets with more information. If you’re proposing a collection alternative, you should tick which option you’d like after paragraph 9 of this form. The main options, as detailed above, include installment agreement (payment plan), offer in compromise (settlement), or currently unable to pay (hardship).
Which documents should you include with Form 12153?
If you’re applying for a collection alternative, such as a payment plan or an offer in compromise, you should attach Form 433-A for individuals and Form 433-B for businesses if applicable. You do not need to include these forms if you qualify for a streamlined payment plan or if you’re applying for an offer in compromise based on doubt as to liability.
To qualify for a streamlined installment agreement, you must owe less than $50,000, be able to pay off the balance within six years (or by the collection expiration date if sooner), be up to date on tax returns and estimated quarterly taxes, and have not defaulted on any payment plans in the last two years.
How do you apply for innocent spouse relief with a CDP hearing?
If you believe the tax lien or levy should be removed or withdrawn because you’re an innocent spouse, then you’ll have to also complete Form 8857, Request for Innocent Spouse Relief. There may also be subtle and/or complicated factual and legal arguments that you need to make. Hiring a tax professional to guide you through this process can ensure you are making the best case for yourself.
Where to send Form 12153
After completing Form 12153 and gathering any additional forms or documents, you can mail your request to the IRS address listed on whatever lien or levy notice the IRS sent you. If there’s no address given or you aren’t sure which address to use, there should be a telephone number on the IRS notice that you can call to obtain the address.
Alternatively, you can call 1-800-829-1040 to get this address. You can also fax your CDP hearing request, but you’ll have to call the IRS at either of the above-referenced telephone numbers to get the appropriate fax number.
What if you miss the 30-day deadline to request a CDP hearing?
If you miss the deadline, you can request an equivalent hearing. There is a spot at the top of the 12153 form to note that you’re requesting an equivalent hearing. Keep reading for a look at the details.
CDP Hearing Vs. Equivalent Hearing
A collection due process and equivalent hearing are the same in that you can negotiate payment alternatives and assert the same arguments against the IRS’s proposed collection actions.
However, there are two main disadvantages to equivalent hearings:
- An equivalent hearing doesn’t pause the IRS levy. On the other hand, if you request a CDP hearing, the IRS will temporarily stop any attempts to collect your tax debt with a levy.
- If you disagree with the results from an equivalent hearing, the decision is final. However, if you disagree with how your CDP hearing turned out, you can ask the U.S. Tax Court to review the CDP hearing decision.
While you almost always want a CDP hearing and not an equivalent hearing, two small benefits come with equivalent hearings:
- During the equivalent hearing process, the 10-year statute of limitations for IRS tax collections will continue to run. In contrast, it pauses during the CDP hearing process. This rule allows the IRS to continue collection actions during the hearing, but it also limits the amount of time they have to collect the debt after the hearing.
- You have a lot more time to request an equivalent hearing. Instead of the 30-day deadline, you get with a CDP hearing, you have one year (if requesting one relating to a tax levy) or one year plus five business days (if requesting one relating to a tax lien) to request an equivalent hearing.
What Happens After Requesting a CDP Hearing?
After you request a CDP hearing, the IRS worker assigned to your collection case may choose to continue trying to resolve your tax matter with you. You can continue communicating with this person for up to 90 days, or you can tell them to stop trying to collect the tax debt immediately and instead forward your case to the IRS Independent Office of Appeals for further processing.
The IRS will let you know when it’s time to schedule the meeting. This is not a fast process. Although the actual timing varies, it can take around two months for the IRS to respond to your request, and the entire appeals process may take several months or even close to a year in some cases.
The Decision from the Collection Due Process Hearing
After the CDP hearing, the settlement or appeals officer who handled the hearing will issue a decision called a Notice of Determination. If you had an equivalent hearing, you would receive a decision letter.
Depending on what you requested and the information provided, you may receive the following types of determinations:
- Acknowledgment that the tax liability was incorrect and a determination to change the liability – For example, if you had discharged some of the taxes in bankruptcy or if the liability was incorrect in other ways.
- Relief from the federal tax lien – This may be a release, a withdrawal, a discharge, or a subordination of the lien, depending on your financial needs and the details of the case.
- Penalty abatement – You may get penalties abated as well as having one of the other results in the list.
- Approval of a payment plan or settlement – The purpose of the CDP hearing is to help you avoid collection actions by making suitable arrangements with the IRS.
- Approval for innocent spouse relief – If you get approved, you will generally only be responsible for your portion of the tax debt shown on a joint return.
- Stopping the levy – By setting up payments or other arrangements, you can avoid wage garnishments, bank seizures, and other IRS levies.
However, if you cannot negotiate payment arrangements with the IRS or prove that the levy is causing financial hardship, the decision may be to preserve the tax lien and proceed with the levy.
What if I Disagree with the Notice of Determination?
If you disagree with the decision made during your CDP hearing, you have 30 days to appeal the Notice of Determination to the U.S. Tax Court.
FAQs About CDP Hearings
I just received Notice CP504, should I request a CDP hearing?
You cannot request a CDP hearing after receiving CP504. However, if you want to prevent the IRS from sending additional notices or pursuing collection actions, you should contact the agency to make payment arrangements or apply for a settlement.
What if I want to appeal but haven’t received a notice about my right to appeal with a CDP hearing?
If you don’t have the right to request a CDP hearing, you may be able to appeal through the Collection Appeals Program. You can request a CAP appeal in the following situations:
- Before or after the IRS files a federal tax lien.
- Before or after the IRS levies your property.
- If the IRS terminates or proposes to terminate your installment agreement.
- If the IRS rejects your request for an installment agreement.
- If the IRS proposes unwanted changes to your installment agreement.
As you can see, some but not all of these issues overlap with your right to request a CDP hearing, and if you have the option to choose between the two, you may want to consult with a tax attorney. A CAP appeal is less formal than a CDP hearing, but you cannot appeal the results in Tax Court.
What if I’m not allowed to appeal my tax liability in a CDP hearing?
You are generally only allowed to dispute tax liabilities in a CDP hearing if you have not had the chance to do so before. If the IRS notifies you that you cannot appeal your tax due in this setting, you have the following options:
- Pay in full and request a refund – Then, if the IRS disallows the refund, you have appeal rights.
- Request an audit reconsideration – You must have new information that was not considered during the original audit.
- Look into an offer in compromise based on doubt as to liability.
Need Help With an IRS Collection Due Process Hearing?
IRS tax liens and levies can have a dramatic financial effect on your life. If you’re losing sleep over the thought of the IRS levying your bank account, garnishing your wages, or placing a lien on your home and property, then contact the experienced tax attorneys at Wiggam Law today.
Our team is here to take the burden of tax issues off your shoulders and deal with the IRS on your behalf. We focus on providing our clients peace of mind while our experienced tax attorneys work towards the best possible resolution for your case.
Don’t wait to get help. Call us today at (404) 609-1300 or fill out our online form to schedule a consultation today.