Form 12153: IRS Collection Due Process Hearing

Form 12153: IRS Collection Due Process Hearing

Form 12153 is the form you file to request a Collection Due Process (CDP) or Equivalent Hearing after receiving a qualifying notice, such as an IRS lien or levy notice. Filed timely, a CDP hearing can stop wage garnishments, bank levies, and asset seizures while the IRS reviews your case.

When you submit Form 12153 by the 30-day deadline on your notice, the agency must suspend collections until the hearing is complete. It’s an opportunity to challenge the IRS’s actions, dispute the amount you owe if you did not previously receive a statutory notice of deficiency or otherwise have an opportunity to dispute it, or request relief such as innocent spouse relief or penalty abatement.

If you’ve just received a lien or levy notice and fail to act, the IRS will enforce that collection action if you don't request a hearing or take other actions. Schedule a consultation with our attorneys to get help with IRS collections, and let’s resolve the tax you owe on your terms.

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 within a year.
• You can appeal to the U.S. Tax Court if you disagree with the results of the CDP hearing, but not the equivalent hearing.

Which IRS Notices Give You CDP Rights?

You can use Form 12153 to request a CDP or equivalent hearing with the IRS Office of Appeals if you’ve received any of the following lien or levy notices:

• Notice of Federal Tax Lien (NFTL) and your right to a hearing under IRC 6320 (Letter 3172).  This is the notice the IRS sends you to notify you that it has filed a federal tax lien against your property.
• Notice of Intent to Levy and Notice of Your Right to a Hearing (Such as Notice LT11 or Letter 1058): The IRS is required to send you a notice before it levies you, whether it’s a bank levy or wage garnishment. It sends you this final notice and gives you 30 days to file a CDP before it enforces a levy.
• Notice of Jeopardy Levy and Right to Appeal. If the IRS determines that tax collection will be jeopardized by following the standard procedure, the IRS levies without sending a notice of its intent to levy. When this happens (and it's very rare), the IRS sends you a notice of its levy action, and you have 30 days to request a CDP hearing to protest its actions.
• Notice of Levy of Your State Tax Refund - Notice of Your Right to a Hearing. After levying your state refund, the IRS may send you a post-levy notice within 30 days, with the right to request a CDP hearing. Before taking your refund, the IRS typically sends you a Notice CP504, but this notice doesn’t provide you with the right to a CDP hearing.

If you have unpaid taxes, you will typically receive several letters, such as the CP14, CP501, CP503, and CP504, before you get final notices. All of these notices mention the IRS’s ability to take your assets, but they do not mention your right to a hearing.

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 an alternative collection.

You can also write 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 8 of this form. The main options, as detailed above, include an installment agreement (payment plan), an offer in compromise (settlement), or a currently unable to pay (hardship) status.

Where to send Form 12153

Mail your request to the IRS address listed on whatever lien or levy notice the IRS sent you (not the payment address). Include a copy of your CDP notice for proper handling of your request.

If you’re not sure of the correct address or want to fax a hearing request, call the phone number on the CDP notice or 1-800-829-1040.

Always mail your form with certified mail or another trackable service and keep proof of mailing to create a paper trail showing you filed the notice on time.

How Long Does a CDP Hearing Take?

While you must file your CDP request within 30 days of your notice, the IRS has no specified deadline for making its final decision; it may take several months, depending on the agency's workload and the complexity of your appeal.

If you’re seeking an Offer in Compromise, installment agreement, currently not collectible status, or another tax resolution option, providing complete financial information (when required) can help reduce the time appeals needs to make a decision, but consider talking with a tax attorney before disclosing financial information to the IRS.

What Can You Raise at the Hearing?

A CDP hearing is an opportunity to challenge the proposed action and discuss alternatives for resolving your tax debt. Depending on the circumstances, these may include:

• Collection alternatives: You can propose an OIC, installment agreement, or currently not collectible (CNC) status if you’re eligible.
• Financial hardship: You can prove that the IRS levying your bank account or wages can cause financial hardship (as per the IRS standards).
• Notice of Federal Tax liens issues: You can request the IRS to withdraw, subordinate, or discharge a tax lien if you meet the necessary requirements or if it would help you to pay the tax.
• Innocent spouse relief: You can request relief from the tax liability in question if it resulted from a joint filed tax return, and you don’t believe the tax debt was assessed correctly or fairly.
• Underlying tax liability: You can also challenge the existence or amount of a tax liability if you did not have a meaningful opportunity to dispute it.
• Collection action: This could include a proposed bank-account levy, wage levy, or other property levy

If you’re requesting a collection alternative, be ready to provide financial information, including Form 433-A and/or Form 433-B, and any other required supporting documents. This is when consulting with a tax professional can be critical to ensure a proposal is well prepared, and your financial disclosure doesn’t lead to even more aggressive tax collection actions from the IRS.

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. One of the major differences is the timing; you have 30 days after receiving a notice with CDP appeal rights to appeal, while you have one year from the date of the CDP levy notice or one year plus five business days from the filing date of the tax lien to file for an equivalent hearing.

However, there are two main disadvantages to equivalent hearings:

• Unlike a CDP hearing, an equivalent hearing doesn’t prohibit the IRS from levying when reviewing your request.
• You also can’t go to court to contest Appeals’ decisions about your disagreement.

An equivalent hearing has one pro, though: when you request one, the IRS's 10-year statute of limitations for IRS tax collections will continue to run, which limits the time the IRS can collect the debt. The clock will, however, pause if you request an installment agreement or an offer in compromise.

CDP vs the Collection Appeals Program (CAP)

One of the major differences between a CAP and a CDP is the timing; the CAP is an option earlier in the collection action, while a CDP hearing is only available when the IRS sends you notice of specific collection actions.

Another major difference is that with a CAP process, taxpayers can’t seek judicial review if they disagree with the decision.

The CDP also offers a broader review and more rights, but it takes longer to resolve, while the CAP is faster and narrower.

So which one should you choose? Choose the CDP when you want the maximum legal protection possible and need to keep the door open for additional appeals. Consider a CAP if you need a decision immediately, like when you need to prevent a seizure from happening in 24 hours, and you’re confident the appeal officer will see things from your point of view without needing a court’s intervention. Note that the right choice depends on your situation, and you should consult with a tax attorney for personalized guidance.

To apply for a CDP, use Form 12153 and Form 9423 to apply for a CAP.

What a Timely CDP Request Can Do

Here’s what a timely CDP does:

• Pauses levies: This stops the IRS from freezing your bank account and seizing wages or property.
• Lets you propose collection alternatives: It allows you to negotiate alternative payment methods such as monthly payments or settlements.
• Protects your passport: A timely CDP can stop the IRS from certifying your tax debt to the State Department, which can lead to a revoked passport or denial of your application for another one.
• Secures the right to appeal: A CDP request secures your legal right to challenge the IRS Independent Office of Appeals decision if you disagree with the verdict in U.S. Tax Court.
• Freezes the collection statute: The IRS pauses the collection statute of limitations clock when you file for a CDP, giving it more time to collect the tax debt.                                                                                                                                                                                                          

Get Help With IRS Collections

At Wiggam Law, we help resolve all kinds of tax problems, so it doesn’t matter the stage you’re at. We can help if you have just received a final notice to levy, or if you missed the CDP hearing deadline and the IRS is already levying your wages or your bank account. The earlier you reach out to us, the better, but the perfect time is now.

Schedule a case review with us to learn about your best options, what each would mean, and how to successfully request them from the IRS.

Frequently Asked Questions (FAQs)

Here are the common questions we get on CDP hearings:

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 at (404) 609-1300 or fill out our online form to schedule a case review.