What Is a Collection Due Process Hearing With the IRS?

A Collection Due Process (CDP) hearing is a formal opportunity for a taxpayer to appeal a collection action proposed by the Internal Revenue Service (IRS). The hearing allows you to discuss your case with an impartial officer from the IRS Independent Office of Appeals who has had no prior involvement with the matter. The purpose is to review the proposed collection action and consider less intrusive alternatives, such as payment plans, before the IRS seizes assets or garnishes wages.

Understanding Your Right to a Hearing

The right to a Collection Due Process hearing is not automatic and is triggered by specific notices from the IRS. One is the “Notice of Federal Tax Lien Filing and Your Right to a Hearing.” A federal tax lien is a legal claim the government places on your property as security for a tax debt, which can impact your ability to sell or refinance it.

Another trigger is the “Final Notice of Intent to Levy and Notice of Your Right to a Hearing.” A levy is the actual seizure of property to satisfy a tax debt. Unlike a lien, which is a claim against property, a levy actively takes it, such as garnishing wages or seizing funds from bank accounts.

Upon receiving one of these notices, a taxpayer has a strict 30-day window to request a CDP hearing. A timely request is necessary to secure full CDP rights. Filing within this 30-day period automatically suspends most collection actions until the hearing and any subsequent appeals are concluded.

If the 30-day deadline is missed, you may request an “Equivalent Hearing” for up to one year from the date of the notice. An Equivalent Hearing addresses many of the same issues as a CDP hearing but does not provide the same protections. Collection actions are not automatically suspended, and the final decision cannot be appealed to the U.S. Tax Court.

Requesting Your CDP Hearing

To request a hearing, you must submit Form 12153, “Request for a Collection Due Process or Equivalent Hearing.” The form requires your identifying information, including name, address, and Taxpayer Identification Number, and the tax periods associated with the debt.

On Form 12153, you must explain your reasons for disagreeing with the collection action and propose a resolution. These proposals should be supported by detailed financial information, often requiring Form 433-A for individuals or Form 433-B for businesses. Common collection alternatives include:

• An Installment Agreement (IA), which is a structured plan to make monthly payments over time. You suggest a payment amount that is affordable based on your income and allowable living expenses.
• An Offer in Compromise (OIC), an agreement to settle the tax debt for less than the full amount owed. An OIC is considered when your assets and income are insufficient to pay the full debt. This requires Form 656 and a non-refundable application fee, which may be waived for low-income taxpayers.
• Currently Not Collectible (CNC) status, a temporary suspension of collection for those who cannot afford to pay their tax debt and cover basic living expenses. While in CNC status, the debt continues to accrue interest and penalties.
• Innocent Spouse Relief, which can absolve you of responsibility for tax liabilities resulting from erroneous items reported by your spouse or former spouse on a joint return without your knowledge.

The Hearing and Decision Process

Your completed hearing request must be mailed to the IRS address listed on the lien or levy notice you received. Using the correct address ensures it is routed to the proper office for your appeal.

Once the form is submitted on time, the IRS Independent Office of Appeals will send a letter acknowledging receipt of your request. This acknowledgment confirms your case is pending with the Office of Appeals.

The hearing is not a formal, in-person proceeding and is conducted by telephone or written correspondence with an assigned Appeals Officer. This officer is tasked with reviewing the collection action from a neutral standpoint.

The Appeals Officer will review the information you submitted, your supporting financial documents, and the IRS case file. They will also verify that all legal and procedural requirements were met before the notice was issued.

At the conclusion of the review, the Appeals Office issues a “Notice of Determination.” This notice explains the officer’s findings, states whether the collection action is sustained or if an alternative has been agreed upon, and provides the reasoning for the decision.

If you disagree with the outcome in the Notice of Determination, you have 30 days from the date on the notice to file a petition with the U.S. Tax Court. This judicial review is only available to taxpayers who timely requested a CDP hearing.