A Collection Due Process (CDP) hearing may be your last chance to prevent an IRS collection action, such as bank account levy. It is also an opportunity request that the IRS withdraw or release its tax lien. At a CDP hearing, you may request an installment agreement, offer in compromise, innocent spouse defense, or you may dispute the amount of tax you owe. However, you can only receive a CDP hearing if you request it in writing within 30-days of receiving the IRS Notice of Intent to Levy.
A CDP hearing will be available if you receive any of the following notices:
- Notice of Federal Tax Lien Filing
- Final Notice – Notice of Intent to Levy and Notice of Your Right to a Hearing
- Notice of Jeopardy Levy and Right of Appeal
- Notice of Levy on Your State Tax Refund – Notice of Your Right to a Hearing
- Post Levy Collection Due Process (CDP) Notice
If your request for a CDP hearing is not timely, you may request an equivalent hearing if your letter is postmarked on or before the end of the one-year period after the date of the levy notice.
Once you request your hearing, you may still discuss your reasons for disagreement with the IRS Collections office. If you are able to come to an agreement on a collection alternative, such as a payment plan, then you can choose to cancel the CDP hearing.
The IRS will generally not take any levy actions during the CDP hearing process, unless certain exceptions apply, such as a levy of a state tax refund. The statute of limitations to collect your taxes will also be extended until the appeals process is completed.
Your CDP conference may be conducted in-person, by telephone, or by correspondence. If you are claiming a financial hardship or proposing a collection alternative, you will need to provide financial information to support your proposal.
It is important to note that while you can petition the U.S. Tax Court if you disagree with the determination of the CDP hearing, you will generally not be able to present new evidence that you did not present during the CDP hearing. Consider consulting with a tax attorney before your CDP hearing, and be sure to raise all issues and present all necessary evidence to preserve your arguments in subsequent court proceedings.