In 1996, the Internal Revenue Service (IRS) implemented a Collection Appeals Program (CAP) to provide an administrative appeal option to taxpayers for certain collection actions. Although never specifically being mandated by statute, the CAP program has continued since then and has expanded in scope through policy changes following legislative acts such as the Restructuring and Reform Act of 1998 (RRA 98).

As part of RRA 98, IRC § 6320 was enacted to give taxpayers a right to a Collection Due Process (CDP) hearing with the Appeals office when an NFTL is filed on their tax liability. Taxpayers were also given the right to go to court on Appeals’ determination under CDP, a right not afforded under CAP.

Taxpayers have the right to appeal the proposed filing of an NFTL under CAP and the right to appeal the actual filing of the NFTL under CDP or CAP.

The policies in this IRM are based primarily on the following:

The Director, Collection Policy is responsible for overseeing policy and procedures regarding lien actions and the associated appeal rights.

Employees that request NFTL filings are responsible for providing accurate information for CDP notices. Employees manually preparing NFTLs are responsible for ensuring CDP notices are properly issued.

Employees authorized to make determinations regarding specific lien actions are responsible for ensuring CAP rights have been provided appropriately.

The Treasury Inspector General for Tax Administration (TIGTA) is required by law to conduct an annual audit to determine whether CDP notices issued by the IRS comply with the requirements of IRC § 6320.

Copies of CDP notices are maintained electronically in the Automated Lien System (ALS). Information on CAP notices is maintained with the respective case files.

Counts of the CDP notices issued are reported monthly by ALS and monitored by Collection Policy.

CDP and Equivalent Hearing (EH) requests are tracked using the CDP Tracking System (CDPTS).

The table below lists common acronyms used in this section.

See IRM Exhibit 5.12.1-2, Glossary of Common Acronyms in IRM 5.12, for a listing of common terms and acronyms used in the federal tax lien program.

See IRM 5.1.9, Collection Appeal Rights, for detailed information regarding appeal rights.

The notices issued to inform of appeal rights when NFTLs are filed are summarized in the table below and discussed throughout this IRM.

IRM 5.12.1, Lien Program Overview, provides additional information, websites, and job aids related to the lien program.

Links to tools and references to assist IRS employees with lien processes also may be found on the My SB/SE website. Similar information for taxpayers may be found on the Understanding a Federal Tax Lien page on IRS.gov.

Certain issues and considerations must be undertaken during the hearing process. The taxpayer may raise any non-frivolous issue relating to the unpaid tax.

See IRM 5.1.9.3.9, Appeal Process, for additional information.

If the taxpayer requests a CDP hearing, Appeals must verify that procedures have been met with respect to the filing of the NFTL and providing the CDP notice. See IRM 5.1.9.3.9, Appeal Process, for additional information.

Appeals or the originating function may ask questions to clarify certain issues or request information that involve ministerial, administrative, or procedural matters.

Care must be taken to refrain from prohibited ex parte communications. Ex parte is a term used in legal proceedings to describe a one-sided point of view received on behalf of or from one side or party only. In this context ex parte communications are communications which take place between Appeals employees and other IRS employees, including ROs, without giving the taxpayers/representatives an opportunity to participate in the communications. See IRM 5.1.9.5, Communications with Appeals, and Rev. Proc. 2012-18 for additional information.

Under IRC § 6320, the taxpayer has thirty (30) calendar days from the date of the notice of determination by the Appeals Officer to file a petition with the U. S. Tax Court appealing the determination.

The Office of Appeals retains jurisdiction with respect to any notice of determination issued under IRC § 6320. This includes subsequent hearings requested by the person who requested the original CDP hearing on issues regarding:

See IRM 5.1.9.3.13, Jurisdiction Retained by Appeals, for additional information.

If a hearing is timely requested, the running of the period of limitation is suspended starting on the date the hearing request is received. The suspension will end:

Notwithstanding the above, the period of limitation for collection will not expire before 90 days after a determination becomes final.

For more information, see IRM 5.1.9.3.6, Suspension of Collection Statute of Limitations, and Treasury Regulation §301.6320-1(g).

Letter 3172, Notice of Federal Tax Lien Filing and Your Rights to a Hearing Under IRC § 6320, is used to notify taxpayers of their CDP rights regarding NFTL filings.

An L-3172 is issued when an NFTL is:

An L-3172 is not issued for:

The L-3172 lists the tax periods, types of tax, assessment dates, and unpaid balances of assessment listed on the NFTL. If a subsequent NFTL is requested for the same tax periods but includes additional assessments, an L-3172 must be issued; however, the taxpayer is only entitled to a CDP hearing on the subsequent NFTL for the assessments for which a notice was not previously issued. If a hearing is requested, include copies of previous NFTLs and CDP notices in the Appeals case file.

The L-3172 is normally generated through the Automated Lien System (ALS) when the NFTL is filed and is systemically printed and mailed through Correspondence Production Services (CPS). In rare instances, it may be necessary to hand-carry an NFTL to the recording office. Whenever an NFTL is manually prepared and filed, manually prepare and issue the CDP notice as well. See IRM 5.12.6.3.7, Preparation and Delivery of Manual CDP Notices.

The following publications and forms are enclosed with the L-3172:

When an NFTL is requested through ALS and processed by the Centralized Lien Operation (CLO), certain transaction codes are systemically posted to IDRS. A TC 582 indicates that an NFTL was generated for filing and a TC 971 AC 252 indicates the L-3172 was generated. Check ALS to determine when the CDP notice was mailed. As needed, facsimile copies may be generated from ALS by revenue officers and other employees with access to the system.

The IRS is required to notify taxpayers after an NFTL has been filed. The CDP notice must be issued to the taxpayer(s) named on the NFTL at their last known address.

CDP notices may be hand-delivered to the taxpayer(s), but the principal means of delivering CDP notices is by mail. The notice must be sent by:

The CDP notice must be hand delivered or mailed within five (5) business days after the NFTL is filed. The NFTL is considered filed on the date it should be received by the recording office. For purposes of systemic notification, the IRS uses an estimated filing date, which is computed by adding three (3) business days to the NFTL mailing date.

The CDP notice must stipulate the response due date for the taxpayer to request an IRC § 6320 CDP hearing. The due date is 30 calendar days after the expiration of the five (5) business days after the date the NFTL is filed (estimated filing date). The response due date is calculated as shown in the chart below.

Normally, the CDP notice is systemically generated and issued when the NFTL is processed through ALS. In certain situations though, such as when the NFTL is hand-carried for filing, the CDP notice must be manually prepared and issued.

The L-3172 (and other lien notices) can be manually generated by using the ICS template.

The notice must be sent separately to the taxpayer and any co-obligor listed on the NFTL at their last known address. If the address on the NFTL is different from the address where the co-obligor is located, create a second notice using the correct address of the co-obligor. See IRM 5.12.6.3.6.1, Possible Address Considerations.

Insert the tax period data as shown on the NFTL. Calculate the taxpayer's response due date for an appeal as 30 calendar days from the issuance of the notice and insert that date into the letter.

When ALS is not used to generate the CDP notice, it is the responsibility of the employee making the NFTL filing determination to ensure that the notice is issued within five (5) business days of the NFTL filing, as required by IRC § 6320.

Document the case history of the issuance of, or the attempt to deliver, the notice. Include the certified mail number and the date mailed, if applicable.

Request input of a TC 971 with appropriate action code to indicate issuance of the CDP notice. See IRM 5.12.6.3.18(5), Inputting TC 971 for Notice Status.

Retain the date stamped, receipted copy of the certified mail label in your case file.

IRC § 6320 requires that taxpayers be provided one appeal opportunity per tax period, per assessment when an NFTL is filed. If there is an error on the NFTL, the taxpayer’s appeal rights may be adversely affected.

To amend an NFTL, complete and forward Form 13809, Request for Amendment to a Recorded Notice of Federal Tax Lien, to CLO for input to ALS . See IRM 5.12.7.9, NFTL Corrections.

When the tax period or type of tax is amended, a new CDP notice is required with a new 30-day response due date for the amended item.

A new CDP notice is not required when the taxpayer’s name, TIN, assessment date, or dollar amount is amended. In these situations, an L-3171 should be issued for the amended NFTL.

ALS generates the appropriate CDP notice based on the corrections made to the NFTL. The notice is systemically printed and mailed from the Correspondence Production Services (CPS).

If an NFTL is amended manually, the CDP notice must be manually prepared and issued by the originating employee. Follow standard procedures for sending the CDP Notice to the taxpayer's last known address or delivering it in person not more than five (5) business days after filing the amended NFTL.

When it is determined that a CDP notice may not have reached the taxpayer or is returned by United States Postal Service (USPS) as undeliverable, or when a new address for the taxpayer is located after the CDP notice is issued, another notice may be needed.

Follow the instructions in the table below to determine when a substitute or a duplicate notice is appropriate.

A substitute notice takes the place and effect of the original notice. A duplicate notice or courtesy copy does not take the place of the original notice, but supplements it. When a situation supports a duplicate notice or courtesy copy, issuance is suggested, but not required.

If a substitute notice is appropriate, the taxpayer is entitled to an extension to request a CDP hearing. A substitute notice can be generated through ALS by sending a request to CLO to reissue the notice. See IRM 5.12.6.3.17(3), Processing CDP Notices Returned by the USPS. Alternatively, the substitute notice can be manually issued.

If the notice was mailed to the last known address at the time the NFTL was requested and it is determined a duplicate notice should be sent, the taxpayer is not entitled to an extension of time to request a CDP hearing; however, an equivalent hearing may be appropriate. See IRM 5.1.9.3.2.2, Equivalent Hearing (EH) and Timeliness of EH Requests, for additional guidance. Duplicate CDP notices must be manually prepared and issued.

When an NFTL is filed against a taxpayer who has an authorized representative/power of attorney (POA) for any of the tax periods on the NFTL, the POA must be notified of the NFTL filing. (26 CFR 601.506) See IRM 5.1.23.3.2.3, Written Communication to a Taxpayer Representative, for further guidance.

One of two letters should be used to notify the POA, depending on whether the NFTL is a new or additional filing.

Employees responsible for making NFTL filing determinations are also responsible for ensuring that the taxpayer's POA is notified of the filing.

The Automated Collection System (ACS) and ICS interact with the Centralized Authorization File (CAF) to identify POAs authorized to receive notices. ACS and ICS systemically send POA information to ALS when an NFTL request includes one of the tax periods covered by the authorization. The POA notice is then systemically generated by ALS and printed and mailed at CPS.

There are situations where the POA information is not systemically downloaded to ALS or additional action is needed to generate the notices, including, but not limited to, the following situations.

When POA information has to be manually input to ALS, secure email the POA’s name and address to CLO with the taxpayer’s TIN and the NFTL SLID. If using Form 12636 to request the NFTL, include the POA information on the form. Alternatively, manually prepare the POA’s notice and mail it (via regular mail) or personally deliver it to the POA.

There is no legal requirement to notify the taxpayer's POA within five business days of the NFTL filing; however, notification should be done as soon as possible.

Per policy, a regular NFTL should be filed in the taxpayer's name for the assessments shown on the special condition NFTL before, or at the same time, the special condition NFTL is filed (IRM 5.12.7.6.5.1, Taxpayer NFTL Filing When Special Condition NFTL Filed). When the regular NFTL is filed, the taxpayer is notified of their CDP rights under IRC § 6320 by the issuance of L-3172.

The third party identified on a special condition NFTL and/or the taxpayer may appeal the filing under the Collection Appeals Program (CAP) process. However, only the taxpayer against whom the assessment is made and against whom the statutory lien has arisen is entitled to a CDP hearing under IRC § 6320. (See Q-A1 in Treasury Regulation 301.6320–1(a)(2).)

Prior to filing the special condition NFTL, research ALS or other available systems to confirm that a regular NFTL was filed against the taxpayer, and a CDP notice issued, for the assessments involved in the special condition situation. If a regular NFTL has not been filed, take the necessary actions to file the NFTL and provide the taxpayer L-3172.

When the special condition NFTL is filed, manually prepare the appropriate notification letter and issue it, with a copy of the special condition NFTL and Publication 1660, to the impacted party as described in the chart below. Certified mailing is not required. (See Q-A7 in Treasury Regulation 301.6320-1(a)(2).)

Refer to IRM 5.12.7.6, Special Condition NFTLs, and related subsections for additional instructions about the special condition NFTL process.

Document the mailing of the notices in the case file history.

If an assessment is made against a Transferee pursuant to IRC § 6901, the Transferee becomes a taxpayer entitled to CDP rights. When an NFTL is filed on the assessment, the Transferee must be issued Letter 3172 providing notice of their due process rights under IRC § 6320.

Before preparing an NFTL in transferee situations, review and follow procedures in IRM 5.12.7.6.3, Transferee NFTLs. Also follow any guidance provided by Counsel.

Routine NFTL filing guidelines should be followed for the transferee. When the NFTL is printed through ALS, the L-3172 will be systemically generated and issued by certified mail within the five (5) business day time frame established by IRC § 6320.

The transferor taxpayer is not provided a copy of the NFTL filed against the transferee nor is the transferor provided additional appeal rights for the filing.

There is no jurisdiction based on IRC § 6305 to restrain or review the assessment and collection of child support obligation balance dues. The Code states that the assessment and collection are not subject to review by the Secretary in any proceeding.

The taxpayer is not entitled to Collection Due Process rights under IRC § 6320 or CAP rights for an NFTL filed for this type of liability. .

When filing an NFTL for a child support obligation, take note of the following:

Letter 3527 is not generated by ALS. Employees requesting the NFTL must prepare L-3527 and ensure that the notice is sent to the taxpayer within five (5) business days of filing There is no certified mail requirement for this letter.

For comprehensive guidance on handling taxpayers’ requests for CDP hearings, read IRM 5.1.9, Collection Appeal Rights.

Taxpayers may mail, hand-deliver, or fax requests for CDP hearings to the employee that requested the NFTL. Requests for appeals based on ACS NFTL filings should be directed to the ACS Support Unit at the ACS site identified in the L-3172.

Employees may attempt to resolve issues with the taxpayer, however, this does not extend the 30-day appeal period. When trying to resolve issues with the taxpayer before the taxpayer has filed a request for a hearing with Appeals, it is essential to inform the taxpayer that the discussions do not extend the 30-day period in which a hearing may be requested.

If the taxpayer requested a hearing, the request must be forwarded to Appeals unless the taxpayer submits a written withdrawal of the CDP hearing request. Form 12156, Withdrawal of Request for Collection Due Process or Equivalent Hearing, should be used. The table below shows other situations that may be encountered and how to address them.

Forward requests for CDP hearings related to fuel excise tax liens immediately to the Appeals employee assigned the case.

Consult IRM 5.1.9.3.3.2 , Sending Hearing Request to Appeals, for what information to include in case files going to Appeals.

Forward envelopes received with Form 12153, Request for Collection Due Process or Equivalent Hearing. The envelope or a faxed Form 12153 is important when determining the actual date of mailing and may be the deciding factor as to whether the taxpayer is entitled to a collection due process or equivalent hearing.

If the taxpayer is an in-business trust fund taxpayer (IBTF) that is not current with employment tax deposits, determine if it qualifies for the Rapid Response Appeals Process (RRAP) and process accordingly. Refer to IRM 5.1.9.3.3.2.1, Rapid Response Appeals Process (RRAP).

The IRS is required by law to notify each co-obligor listed on the NFTL (e.g., spouses of a joint liability, partners of a partnership liability) of their collection due process appeal rights.

The IRS by policy is required to provide the taxpayer's authorized representative with a copy of the notice issued to the taxpayer.

Most CDP notification is done systemically through the interactions of ICS, ALS, and CPS. Revenue officers should document case histories of actions taken to ensure CDP notification outside the systemic process.

During the case review process, group managers should note whether revenue officers are documenting, where appropriate, that CDP notification has taken place.

If the taxpayer requests a CDP hearing in response to the NFTL filing, the revenue officer requesting the NFTL filing must process the request even if the case has been closed.

If a CDP notice is invalid, a substitute notice must be issued. For situations warranting the issuance of a substitute CDP notice because the CDP notice was invalid, refer to IRM 5.1.9.3.2.4, Invalid CDP Notices and Rescinding a Valid CDP Notice.

A valid CDP lien notice may be rescinded only if all the following conditions are present:

Once the time period for requesting a CDP hearing has expired , the CDP notice may not be rescinded because the taxpayer was afforded an opportunity for a hearing.

If an NFTL is ineffective or withdrawn, the CDP notice is still valid unless the CDP notice is rescinded before the time period for requesting a hearing expires and the taxpayer has not requested a hearing. This includes the following situations:

When a CDP lien notice is rescinded, the TC 971 AC 252 that posted to the tax period(s) on the NFTL must be reversed through input of a TC 972 AC 252. If an NFTL is filed in the future for the same tax period(s), a new CDP lien notice must be issued.

Notices may be returned by the United States Postal Service (USPS) as:

Returned notices are mailed to the employee who requested the NFTL at their post of duty address listed in ALS or to the office designated by the function for address verification.

Within fourteen (14) calendar days from the date an undeliverable notice is received by the requesting employee (or the person designated the responsibility of processing returned mail), the following actions must be taken:

If the address on the returned notice was the address of record at the time the NFTL was requested or manually prepared, but the address was updated on IDRS within two cycles after that time, a courtesy copy of the notice may be sent to the taxpayer’s current address, but it is not required.

If a reissued CDP notice is returned, no additional research is needed because the reissued notice was mailed to the last known address based on prior research. Document the history that the reissued notice was returned and retain the notice and envelope in the case file.

Within fourteen (14) calendar days from the date an unclaimed or refused notice is received by the requesting employee (or the person designated the responsibility of processing returned mail), request input of TC 971 AC 254 or 255 to the tax periods on the NFTL following the procedures in IRM 5.12.6.3.18. Document the ICS history and retain the return notice and envelope in the case file. No other actions are needed.

Transaction code (TC) 971 with an action code (AC) should be input to IDRS to show the mail status of a CDP notice. The codes are applicable only to L-3172.

The employee requesting the NFTL is responsible for ensuring the input of TC 971 AC 252 for the CDP notice.

When a CDP notice is returned by the USPS, the employee or function processing the returned notice is responsible for requesting the input of TC 971 AC 253-255 to IDRS for each tax period listed on the NFTL. See IRM 5.12.6.3.17, Processing CDP Notices Returned by the USPS.

TC 971 Action codes 253-255 may be input without TC 971 AC 252 (mailed) being present on the module. However if you find that the TC 971 AC 252 was not uploaded, research the situation and request input of the code with the appropriate date.

If the notice of a co-obligor is returned, input the TC 971 with the appropriate action code and also input the cross-reference TIN on the primary account.

There is no prohibition to filing an NFTL when a levy CDP appeal has been requested. An NFTL can be filed if it is deemed appropriate.

Prior to filing the NFTL, the Collection group manager (GM) should contact, preferably by secure email, the Appeals Team Manager (ATM) of the hearing officer assigned the case and inform them that an NFTL will be filed. Refer to IRM 5.1.9.5(5), Communication with Appeals.

Ascertain if Appeals has new information that would affect the decision to file the NFTL.

Follow standard NFTL filing procedures of attempting to notify the taxpayer of the NFTL filing and their appeal rights. See IRM 5.12.2.2, Taxpayer Contact.

Several collection issues have separate appeal procedures in place. When a taxpayer (or third party) requests an appeal under CAP in error, advise the taxpayer of the correct appeal procedures. Refer to IRM 5.1.9.4.1, Exclusions from CAP.

CAP cannot be used to appeal the following:

If the taxpayer (or third party) requests a CAP appeal of an NFTL filing or denial of a lien certificate request, the taxpayer must first discuss the case with the Collection manager.

The Collection manager or designee must reply to the request for a CAP Appeal conference in a timely manner not to exceed two (2) workdays.

If agreement is not reached at the manager conference, advise the taxpayer that they can have the issue addressed by the Office of Appeals by filing a request in writing. Advise the taxpayer to use Form 9423, Collection Appeal Request.

Refer to IRM 5.1.9.4.2, Request for a CAP Appeal, for further guidance.

See IRM 5.1.9.4.3, Sending CAP Request to Appeals, for additional guidance on processing CAP requests.

Send the CAP appeal with applicable information via secure email or fax to the appropriate Appeals Office following the Case Routing guide on the Appeals web page. Forward the request to Appeals within two (2) business days of receipt of the Form 9423 after the Collection Manager conference.

Sending a copy of the entire case file is not necessary and can be burdensome. On a case by case basis, Appeals and Collection will determine what parts of the file are required to adequately address the appeal.

The Appeals file should include, at a minimum, the following information:

In the fax transmittal or email, include your name, email address, telephone number, fax number, as well as the taxpayer’s name and telephone number, and, if applicable, the POA’s name and telephone number. Also, indicate the date of the group manager’s conference and the group manager’s email address..

The Appeals organization tries to resolve CAP cases within five (5) business days of the receipt of the case by the Settlement Officer (SO). More complex CAP cases are normally resolved within fifteen (15) business days.

If a taxpayer presents new information to Appeals that the revenue officer has not considered, Appeals may ask the revenue officer to review and comment on the information, in accordance with the ex parte requirements. See IRM 5.1.9.4.4, CAP Process.

When the filing of the NFTL is the subject of the appeal, further NFTL action is generally withheld unless appropriate to protect the government's interests. The group manager must concur with the planned action during the appeal. Prior to taking further NFTL action, check with Appeals to determine if they have any new information from the taxpayer that may affect the decision. Refer to IRM 5.1.9.5, Communications with Appeals.

Appeals will inform both the taxpayer and Collection of their decision as soon as possible within the five (5) business day requirement. Decisions by Appeals are binding on the taxpayer and Collection.

If there is concern or disagreement with respect to a decision reached by Appeals refer to IRM 5.1.9.5.4, Disagreement with Appeals Decisions.