Purpose: This section provides guidance to Appeals Technical Employees (ATEs) for certain specialty issues arising in Collection Due Process (CDP) cases.

Not every specialty issue is discussed in this section. Instructions for some cases and issues fit better in other sections as listed in the table below.

Audience: The primary users of this IRM section are ATEs and Appeals Team Managers (ATMs) handling Collection Due Process (CDP) and Equivalent Hearing (EH) cases.

Policy Owner: Director, Case and Operations Support.

Program Owner: Director, Policy, Planning, Quality and Analysis (PPQ&A).

Contact Information: Appeals Employees should follow established procedures on How to Contact an Analyst. Other employees should contact the Product Content Owner shown on the Product Catalog Information page for this IRM section.

RRAP delivers priority CDP hearings for cases meeting ALL of the following criteria:

Cases excluded from RRAP include:

To be considered under RRAP, a case must be identified as such by Collection prior to being forwarded to Appeals using the RRAP procedures below.

After approval by the revenue officer's group manager, the digitized case documents listed below must be forwarded to the appropriate Appeals RRAP Technical Coordinator via encrypted e-mail with a courtesy copy to the appropriate RRAP Account and Processing Support (APS) Coordinator within 45 days of the date Collection received the taxpayer's written request for a CDP.

Collection sends RRAP cases via encrypted e-mail to the Appeals RRAP Technical Coordinators and the RRAP APS Coordinators as follows:

The e-mail subject line should contain "CDP IBTF RRAP Case - XXXX" where XXXX reflects the case name control.

The file must include the following digitized documents:

IRC 6330(f) provides 4 exceptions to the pre-levy notice requirements in IRC 6330:

When the IRS levies prior to issuing a CDP notice in these circumstances, the taxpayer is given the opportunity for a CDP hearing via a post-levy CDP notice issued within a reasonable period of time after the levy. The subsections below discuss each of the exceptions.

International tax issues arise from overseas and cross-border activities of U.S. businesses and individuals as well as U.S. activities of foreign businesses and individuals. The definition of International issues, including coordinated, non-coordinated, and emerging issues can be found on the Appeals International website located at http://appeals.web.irs.gov/intl/default.htm.

Input Feature Code "IC" (International Case) to ACDS when a CDP has an international tax issue.

Examination International tax issues generally require a referral to the Appeals Team Managers of the International Technical Specialist groups found on the Appeals International web page. See IRM 8.22.8.6.1, Referring a Liability Issue, for instructions on referring the international tax issue to an Exam AO for consideration.

Form 13381, Appeals Technical Guidance/International Referral is:

Form 13381 resources are found on the International website http://appeals.web.irs.gov/intl/default.htm including:

International cases with collection related issues should be assigned to the Collection Appeals group with responsibility for working such cases. Proposed case transfers should be coordinated through that team’s ATM. Locate the ATM’s contact information via the link that is located on the Appeals intranet page following Collection > Resources > Appeals International Collection Issues Group.

Under state law, general partners in partnerships are liable for taxes assessed against the partnership. In United States v. Galletti, 541 U.S. 114 (2004), the Supreme Court held the Service’s assessment against a partnership serves to make the general partner liable for the tax. While the Supreme Court did not address administrative collection, Galletti is consistent with the Service’s long-standing legal position that it can enforce a tax lien and take administrative levy action against a general partner based on the assessment and notice and demand directed to the partnership. See Chief Counsel Notice 2005-003 at http://www.irs.gov/pub/irs-ccdm/cc-2005-003.pdf

A partner's individual CDP hearing request:

Collection must identify the liable taxpayer prior to issuing a CDP notice so that the correct entity is notified of their right to a CDP hearing. IRM 5.1.21, Collecting From Limited Liability Companies (LLCs), contains guidance for Collection employees including IRM 5.1.21.14, Identification of Liable Taxpayer, and IRM 5.1.21.6.1, Collection Due Process Notice.

The liable taxpayer is either the:

Appeals must verify whether Collection properly assessed the correct person or entity and properly issued the notice and demand and the CDP notice to the liable taxpayer as part of the Legal and Administrative analysis. This is done by reviewing:

The liable taxpayer is sometimes identified in TXMOD with Transaction Code (TC) 971 and an Action Code (AC) shown below:

The table below reflects Part 5 IRM sections containing LLC instructions Collection must follow when deciding how to list the taxpayer's name on the notice of lien or levy and whom to notify of CDP rights:

A disregarded SMO LLC is carded-in on ACDS as the case appears on IDRS. The information on ACDS must match IDRS.

If you determine the LLC entity is a disregarded single owner, prepare the ACDS update form and request that APS:

A request for a CDP hearing that lists the SMO's name and the LLC's EIN but not the single owner's TIN is not valid. The taxpayer is required to include an identifying number in the written CDP hearing request. Thus, if a single owner of a disregarded LLC fails to include his/her TIN and lists only the LLC's EIN, then the CDP hearing request is not perfected. If a CDP is referred to Appeals without required TIN information, attempt to obtain it from internal sources - IRM 8.22.5.2.3, Imperfect Hearing Requests. If you cannot locate the TIN from internal sources, return the request as a premature referral.

If the CDP notice was not properly issued to the liable taxpayer, return the request to Collection as a premature referral. Not properly issued includes:

A review of IDRS is generally all that is required to verify a CDP notice was properly issued to the liable taxpayer. However, it is possible for an LLC to change without notice to the IRS. If the L & A verification confirms the CDP notice was properly issued but the taxpayer claims collection action is directed at a person or entity who is not liable, (e.g. the assessment was made against the wrong person or entity, the notices (including notice and demand) were issued to the wrong person or entity) the taxpayer should be asked to document that claim. This issue can be complex as both State law and Treas. Regs. can factor in. Refer to IRM 5.1.21,, Collecting From Limited Liability Companies (LLCs), and if in doubt, consult with Area Counsel.

Add ACDS feature code "DR" to cases that qualify for disaster relief.

Special tax law provisions may grant additional time to file returns and pay taxes as a means to help taxpayers recover financially from the impact of a disaster, especially when the federal government declares their location to be a major disaster area.

Appeals follows the Disaster Relief Memorandums issued by the Director, Communications, Liaison and Disclosure (CLD), when dealing with taxpayers in a disaster-covered area. Disaster Relief Memorandums are available at: http://www.icce.irs.gov/fema/

Disaster Relief IRM guidance for Appeals is found at:

If a taxpayer files bankruptcy after filing for a CDP or EH hearing:

If there is an open OIC case related to the CDP, close the OIC WUNO as a return using cc 20. Send a standalone Letter 5010 to convey the OIC disposition to the taxpayer.

There are certain actions that should be taken on CDP/EH cases with a bankruptcy proceeding which do not violate the automatic stay. See IRM 8.7.6.2, Appeals Bankruptcy Cases, Collection Due Process Cases, for a discussion of the following:

If a Notice of Determination or Decision Letter was issued on an open bankruptcy case, alert Area Counsel as the notice may be void.

11 U.S.C. 362(a)(8) prohibits the commencement or continuation of a Tax Court proceeding concerning:

A prior bankruptcy may constitute a prior opportunity for a hearing on the liability if the same tax periods are later involved in CDP. Consult with Area Counsel to examine the facts of the bankruptcy case and determine whether the taxpayer had an actual opportunity to contest the liability in the bankruptcy. For example:

Consult with local Counsel for issues involving a Receivership, Assignment for the Benefit of Creditors, or other insolvencies. Similar to bankruptcy, in these cases, a determination should be made whether or not to suspend the CDP under these circumstances. See also IRM 5.9.20, Non-Bankruptcy Insolvencies.

DOJ has the sole authority to settle or otherwise compromise liabilities in the following situations:

When you discover tax periods with DOJ controls, determine the status and issues in the suit, and contact Area Counsel for guidance. If Counsel believes continuing the CDP hearing could adversely affect the ongoing litigation, Counsel will ask you to suspend the CDP hearing. Input ’SU/PI’ in the CAR to place the case in ’E/OTH’ status

The table below provides instructions for DOJ controlled cases:

If a taxpayer has not raised any issues over which Appeals has jurisdiction:

IDRS may confirm an IRS Criminal Investigation Division (CI) investigation. See the table below for CI indicators in IDRS:

Request the name and contact information for the CI Special Agent assigned to your case through the CI contact whose name is listed on the CDP intranet page following Appeals > Collection > Collection Due Process > Resources > CI Case Assignments.

A 120 day follow-up is appropriate on CI cases unless the special agent states a different time frame for follow-up.

A CDP hearing involves a decedent when:

If a taxpayer dies after requesting a CDP hearing, the request is still valid. However, any Form 2848, Power of Attorney, terminates by operation of law. Obtain a copy of the executor's or administrator's appointment to act on behalf of the estate and ask if they wish to continue the CDP hearing. Then consult the table below:

Refer to IRM 21.3.3, Taxpayer Contacts - Incoming and Outgoing Correspondence/Letters, for how to address correspondence and forms for decedent cases.

The IRS may not levy on probate assets without permission of the probate court. If Appeals is unable to reach an alternative to collection in such a case, the determination/decision may state that levy is sustained but not against assets in the custody of the court, absent permission from the court.

If there is no requirement for probate, the personal representative or any successor in interest (e.g., spouse, trustee, surviving joint tenant, etc.) MAY be authorized to sign on behalf of the estate. Confirm there is no requirement for probate and that either the successor in interest is appointed personal representative under the decedent's will or the successor in interest otherwise qualifies. If the successor in interest is not willing to sign the withdrawal or continue the CDP hearing, issue the Notice of Determination/Decision Letter based on the available information.

When calculating an estate’s Reasonable Collection Potential (RCP) in an offer in compromise, Collection may need to value an asset that was previously listed on the estate tax return. If the taxpayer disputes Collection’s valuation, you will need to determine the value of the asset. A starting point for your analysis should be the value listed on the estate tax return, the value determined by Collection, or the value determined by the Tax Court in an estate tax deficiency case following the IRS’s examination of the return. For estate tax purposes, assets are valued as of the date of death. In calculating the RCP, Collection should have determined whether the value of the asset has increased, remained the same, or decreased since the valuation for estate tax purposes. If the taxpayer has provided additional or new information in Appeals, consider whether issuing an Appeals Referral Investigation (ARI) is necessary to determine an asset value. Refer to IRM 8.22.7.4 and its subsections for guidance on ARIs. Explain your determination of the asset’s value in the Notice of Determination.

Contact local Area Counsel with any questions concerning local law on probate.

Combat Zone (CZ) accounts are identified by a -C freeze, which indicates a taxpayer is or was serving in a designated combat zone area.

When working an account with a –C freeze, additional research is required to determine the taxpayer's CZ status. Research CC IMFOLE for the Combat indicator on Line 11. See the table below:

Members of the United States armed forces and their spouses may be eligible for certain deferments under:

Review the following IRM sections for information and eligibility:

A taxpayer may have a pending matter in Tax Court, or in the jurisdiction of another court, for one or more tax periods that are not a part of your CDP or EH case. This may happen when the taxpayer is litigating:

A taxpayer or representative may request that the current CDP case be suspended pending the outcome of the litigated matter. It is generally not required to suspend work on the current CDP or EH case for this reason, however, it may be prudent to do so in certain circumstances. On a case-by-case basis, the AO should consult with their ATM and, if necessary, IRS Counsel, about how to proceed in such cases.

IRC 6306 authorizes the IRS to enter into certain qualified tax collection contracts with a PCA for certain "inactive tax receivables" .

The IRS establishes the criteria by which these specific debts are to be assigned to a PCA.

There are certain statutory exclusions in place that will prevent assignment of a debt by the IRS to a PCA. These exclusions include when a taxpayer is:

Cases assigned to a PCA and which subsequently meet any of the above criteria will be returned to the IRS.

IRC 6320 and 6330 are statutory appeal rights giving Appeals broad authority to resolve any relevant issue raised by the taxpayer, including resolutions that include all CDP and non-CDP liabilities such as installment agreements and offers in compromise.

When you are assigned a CDP or EH case with related liabilities that are outside of CDP and assigned to a PCA, but the liabilities need to be included in the overall resolution of the case, the taxpayer should contact their assigned PCA, in writing, informing them that they no longer wish to work with the PCA and that the debts should be recalled to IRS. The PCA will honor the request under the Fair Debt Collection Practices Act.

See also IRM 5.19.1.5.21, Private Debt Collection, and its related subsections.

When Appeals closes a case that is appropriate for expedited passport decertification, take the following actions:

For cases where there is no need to expedite the passport decertification process, no action is needed by Appeals, but appropriate closing transactions should be input promptly by APS.

Passport certification accounts are flagged with TC 971 AC 641, and decertification generally begins once certain qualifying transactions appear on IDRS.

A TC 972 is systemically input (outside of Appeals) to reverse the TC 971.

See IRM 5.19.1.5.19, Passport Certification in Case of Certain Tax Debts, and its related subsections.

In certain unique circumstances, the taxpayer may request a Letter of Credit (LOC) or posting of a Bond to be used as collateral for their tax debt. Inquire of the taxpayer why they would be able to secure a LOC or Bond yet be unable to obtain credit sufficient to pay the tax liability. If you determine the taxpayer’s answers are satisfactory, take the below actions, as applicable.

For a LOC, prepare and submit an ARI to Advisory. Advisory will consult with Counsel. Submit the ARI via the following website: http://mysbse.web.irs.gov/collection/ceaso/contacts/19172.aspx.

Advisory will review the LOC and, if it meets the necessary requirements, refer it to Counsel.

If approved by Counsel, the taxpayer will be notified of the approval and Advisory holds the approval letter.

If not approved, the CDP matter will be resolved in Appeals.

For Bond requests, refer the taxpayer to Treasury Circular 570 for a list of acceptable bonding agencies. The taxpayer should review and investigate this option fully as the requirements and costs of such an option are generally prohibitive. Treasury Circular 570 is located at the following link: https://www.fiscal.treasury.gov/surety-bonds/circular-570.html.