The IRS Restructuring and Reform Act of 1998 (RRA 98) created Collection Due Process (CDP) appeal rights and with them, the ability for taxpayers to contest their liability under certain circumstances.

Internal Revenue Code (IRC) sections 6320 and 6330 are the primary sources of authority, in addition to applicable Internal Revenue Manual (IRM) sections. Further, the Taxpayer Bill of Rights, IRC 7803(a)(3), applies to Appeals employees’ interactions with taxpayers.

The Policy analyst shown on the Product Catalog page as the originator is the assigned author of this IRM.

PPQ&A provides trend and data analyses and detailed summary reports for Appeals.

See IRM Exhibit 8.22.4-3, Common Terms and Acronyms Used in Collection Due Process, for common terms and their definitions.

eCase enables the Appeals Centralized Database System (ACDS) to electronically receive and store case files from the databases of partner organizations. This reduces the time required to establish the case on ACDS and also reduces or eliminates data input errors.

eCase information is available from ACDS via the "eCase Info" button after accessing a case or work unit (WUNO). The "eCase Info" button is grayed-out if eCase information is not available.

eCase provides data such as:

eCase for Automated Collection System (ACS) cases has 11 tabs for information, including:

Integrated Collection System (ICS) eCase is more limited containing three tabs for information:

ICS eCase does not provide:

ACDS data is also transmitted electronically to the ICS case history when the CDP/EH case is received or closed by the Account and Processing Support (APS). ACDS data transferred to ICS includes:

Additional information about eCase including a brief training overview is available on the Business Systems Planning (BSP) web page on the Appeals web site.

APS establishes the case, or work unit (WUNO) on ACDS using

After establishing the WUNO on ACDS, APS attaches a CSC to the case file highlighting the critical elements of the WUNO.

The Appeals employee assigned the case is responsible for reviewing the following to ensure the accuracy of the information on the CSC:

A request for a CDP hearing includes all periods listed on the CDP lien and/or levy notice, even if not listed on the hearing request. The periods on the CDP notice and the periods on the CSC must be the same unless the taxpayer specifically excludes a tax period on his or her hearing request.

When adding CDP tax periods to the CSC, ask APS to input to the new periods a TC 971 with AC:

If a taxpayer subsequently withdraws some tax periods from the CDP hearing, see IRM 8.22.5.2.5, CDP Withdrawals.

If the periods on the CSC are not consistent with the taxpayer's hearing request, see IRM 8.22.5.2.2.4 for instructions on making updates to the CSC.

During your review, you may discover a taxpayer's hearing request lacks necessary information. It is important to distinguish between non-processable and incomplete hearing requests.

Non-processable: A hearing request missing any of the following is invalid:

It is not Appeals' role to perfect an invalid hearing request. If a hearing request is invalid, see IRM 8.22.5.2.4.1, Non-Processable Hearing Request and return the case to Collection as a premature referral per IRM 8.22.5.2.4.

Incomplete: A hearing request missing information easily obtained from an internal database and/or information submitted by the taxpayer is valid. In such an instance, proceed with the hearing. Examples include:

If the CDP notice lists multiple tax periods and the taxpayer did not list any tax periods on the Form 12153, consider the request for a hearing to be for all periods listed on the CDP notice.

A taxpayer's right to a CDP hearing is statutory. Appeals may not release jurisdiction of a CDP by returning a case to Collection as a premature referral unless:

For premature referral cases, input the following on the Form 5402:

An attachment or ACM is not prepared since Appeals did not conduct a legal and administrative analysis.

An untimely CDP hearing request is not automatically treated as an EH request, which can occur if Collection forwarded the case to Appeals as a timely CDP hearing, the taxpayer did not request an EH and the hearing officer determines:

The following table contains examples and procedures when the above occurs:

A taxpayer may withdraw a request for CDP hearing or EH at any point prior to the issuance of the Notice of Determination or Decision Letter. Once a request is withdrawn, the taxpayer may not request another hearing on the same tax and periods. Administrative appeal is still available through the Collection Appeals Program (CAP).

If a taxpayer withdraws from a CDP hearing but then rescinds that withdrawal prior to issuance of the closing letter by Appeals, continue with the hearing. The request to rescind the hearing may be made orally or in writing. Document the CAR.

Form 12256, Withdrawal of Request for Collection Due Process or Equivalent Hearing, may be used to withdraw a CDP or EH request. While Form 12256 is preferred, any written request clearly indicating a request to withdraw is honored.

The most common reasons for withdrawal are the taxpayer:

If Collection receives a withdrawal from the taxpayer after sending the case to Appeals, Collection forwards the withdrawal to Appeals to associate with the CDP case.

The legal and administrative review is not required when a taxpayer withdraws a hearing request. Advise the taxpayer seeking withdrawal that he/she is giving up Appeals’ legal and administrative verification. Use Letter 4383, Collection Due Process / Equivalent Hearing Withdrawal Acknowledgement, to communicate the withdrawal to the taxpayer.

Request a withdrawal using Letter 4388, Withdrawal Solicitation, when:

If the taxpayer does not withdraw, issue the SCL letter and schedule a hearing.

If the taxpayer and you reach an agreed resolution, do not request a withdrawal. Instead, see below:

Withdrawal of the CDP does not withdraw an OIC submitted as part of the CDP process. The taxpayer must separately withdraw the OIC in writing.

If the taxpayer inquires about options for raising liability outside of the CDP, you may discuss claim or audit reconsideration procedures found at Pub 3598, What You Should Know About the Audit Reconsideration Process, or Pub 556 Examination of Returns, Appeal Rights, and Claims for Refund.

A taxpayer may choose to withdraw some, but not all, periods on a CDP notice. If so, take the following actions:

The taxpayer's request for a CDP hearing must be in writing and requested within the prescribed time period. Some CDP notices contain both an address for requesting a hearing and an address for making payments. The written request for a CDP hearing should be sent or hand-delivered to an IRS office and address as directed on the CDP notice.

If a taxpayer mistakenly sends a timely hearing request to a different address on the notice, treat the postmark or transmission date as the date to determine timeliness.

The following table reflects the requirements for various manners of delivery:

Timely mailing is treated as timely filing/submitting as per IRC 7502 and IRC 7503.

Notice 2016-30, 2016-18 IRB 676, Designated Private Delivery Services, lists the designated Private Delivery Service (PDS) providers for purposes of the timely mailing treated as timely filing/paying rule of IRC 7502. The currently designated PDS providers are DHL Express (DHL), Federal Express (FedEx), and United Parcel Service (UPS). If the postmark is made by a non-U.S. Postal Service (USPS) system, such as a private postage meter stamp or a designated (PDS), Treas. Reg. 301.7502-1(c) requires both of the following to be considered timely:

IRC 7508 and IRC 7508A postpone certain time-sensitive acts when a person is serving in the Armed Forces in a combat zone or serving in support of such Armed Forces, or there is a presidentially declared disaster. Rev. Proc. 2018-58 includes the time period for requesting a CDP lien or CDP levy hearing as acts that may be postponed. Though not specifically listed in Rev. Proc. 2007–56, IRC 7508 and IRC 7508A apply to EH requests as well.

There are times when the envelope is missing or the postmark, meter or fax transmission date is not legible.

The CDP notice sent to the taxpayer is the controlling notice for determining timeliness. The letter transmitting the POA's copy of the CDP notice and the taxpayer's CDP notice should have the same issuance date. However, if the POA sends his/her copy of the CDP notice with the hearing request, verify that the POA's copy and the taxpayer's controlling copy have the same issuance date.

If the POA's copy of the CDP notice does not match the date of the taxpayer's CDP notice, you must use the taxpayer's copy. The courtesy copy sent to the POA does not meet the requirements of IRC 6320(a)(2) and IRC 6330(a)(2), which are:

The CDP hearing must include the tax periods on the taxpayer's CDP notice in the hearing. Do not include additional tax periods listed on the POA's letter.

Verify and document the following in the CAR within 30 days of receipt of a case:

IDRS Transaction Code (TC) 520 with the following closing codes (cc) are used to systemically suspend the statutory period of limitation on collection after assessment, or CSED:

The following table reflects the TC 520 cc 76/77 dates for various manners of delivery and receipt of the hearing request. Note that a CDP notice may contain more than one address for a taxpayer’s response (for example, the address for submitting the hearing request and the address for submitting the payment voucher) and a taxpayer may inadvertently send the hearing request to an address on the notice other than the one for requesting a hearing.

In addition to TC 520 transaction codes, Appeals must also ensure the tax periods that are the subject of the CDP hearing contain the IDRS CSED suspension indicators. The suspension indicators for timely CDP cases are:

The following table reflects the timeliness determination, statute verification and documentation requirements that are part of the initial case review:

The following IDRS statute controls must be corrected immediately using the procedure outlined in the table that follows:

IRC 6320(b) and IRC 6330(b) require the hearing "be conducted by an officer or employee who has had no prior involvement with respect to the unpaid tax," which includes participation or involvement in any matter (other than a CDP lien or levy hearing) that the taxpayer may have had with respect to the tax and tax period shown on the CDP notice.

Per Treas. Regs. 301.6320-1(d) and 301.6330-1(d), "Prior involvement exists only when the taxpayer, the tax and the tax period at issue in the CDP hearing also were at issue in the prior non-CDP matter, and the Appeals officer or employee actually participated in the prior matter."

Prior involvement applies to EH cases. An EH is a "non-CDP matter" . If you previously conducted an EH with a taxpayer for the same tax and period at issue in a CDP hearing, you've had prior involvement and may not conduct the CDP hearing without securing a Form 14041 waiver.

A taxpayer may waive the "no prior involvement" restriction. For this purpose, use a Form 14041, Waiver Form for Right to Request A New Settlement/Appeals Officer under Section 6320 and/or 6330, and retain a copy with the administrative file.

The prior involvement restriction only applies to the Appeals employee conducting the hearing, not the Appeals manager who signs the Notice of Determination or Decision Letter.

An employee who previously served as a mediator involving the same tax and tax period at issue in the CDP or EH is considered to have had prior involvement.

The following table contains examples to help determine whether you had prior involvement:

If the hearing officer at the office closest to an individual taxpayer's residence, place of employment or school, or a business taxpayer's principal place of business had prior involvement and there are no other hearing officers located in that office, the taxpayer is not offered an in-person conference at that Appeals location unless the taxpayer waives the "no prior involvement" requirement. The taxpayer is offered an in-person conference at another Appeals office if the taxpayer otherwise qualifies for an in-person hearing.

As long as there is no prior involvement, a taxpayer does not have a right to a hearing with a hearing officer other than the one assigned. If requested by the taxpayer, a case transfer may be considered per IRM 8.6.1.3, Transfer Procedures.

IRC 6320(c) and IRC 6330(c) require Appeals to verify "that the requirements of any applicable law or administrative procedure have been met." This requires a thorough knowledge of tax law, regulations and Collection's administrative procedures in IRM Part 5, Collecting Process.

The L&A review is required in all cases except:

Conduct the L&A review even when receiving a transfer and the prior Appeals employee conducted the review. The results of your review will appear in your decision/determination letter attachment.

Conduct the L&A review regardless of whether the taxpayer specifically raises the issues in the table below. The review consists of verifying:

IRC 6330(c)(1) does not require reliance on a particular document for verification. These items can be verified with IDRS command code TXMOD transcripts or Form 4340, Certificate of Assessments, Payment, and Other Specified Matters, and the administrative file from Collection, unless an irregularity is identified. An irregularity may require research beyond reviewing transcripts and the administrative file. TXMOD transcripts used to conduct your L&A review must be saved in the administrative file as they are necessary if the taxpayer petitions Tax Court.

There is no need to specify the dates on which the L&A requirements were met unless the taxpayer identifies an irregularity in one of the requirements.

You are not required to document the L&A review in the CAR. Documenting it in the decision/determination letter attachment meets the legal requirements. However, it may be advisable to document the results of your review in the CAR to recall them at closing.

"Last known address" is the address provided by the taxpayer on the most recently filed and properly processed federal tax return unless the IRS is given "clear and concise notification" of a different address.

"Clear and concise notification" is a written statement signed by the taxpayer and mailed to an appropriate IRS address informing IRS that the taxpayer wishes the address of record changed to a new address. In addition to the new address, this notification must contain:

IRC 6330(c) provides two instances in which Appeals is precluded from considering an issue under CDP:

The phrase "previous administrative hearing" is limited to an Appeals hearing. The Appeals CAR from a previous hearing shows what issues the taxpayer presented as well as Appeals decision. Similarly, if a court entered a decision on the same issue in a judicial proceeding to which the taxpayer was a party, then the taxpayer is precluded from having the issue considered in the CDP hearing. If there is a question regarding whether an issue was previously "raised and considered" or whether the taxpayer "participated meaningfully," give the taxpayer the benefit of the doubt.

See IRM 8.22.8, Liability Issues and Relief from Liability, for a discussion of liability issues precluded under IRC 6330(c)(2)(B).

CSO cases have no CDP hearing rights. IRC 6305 states federal courts have no jurisdiction to restrain or review the assessment and collection of CSO cases. It also states neither the assessment nor the collection of CSOs are subject to review by the Secretary in any proceeding.

Letter 3524, Final Notice - Notice of Intent to Levy, (delinquent child support balance due) is issued specifically for CSOs. The notice of assessment of tax and demand for payment and Letter 3524 are all that is required for IRS to initiate enforced collection on CSO cases.

If Collection forwards a CDP/EH case to Appeals solely on a CSO, advise the taxpayer to contact the CSO agency to resolve the matter. Close the CDP as a premature referral per IRM 8.22.5.2.4.

Appeals may disregard any portion of a CDP or EH request if it:

If the entire CDP request is frivolous or reflects a desire to delay, the taxpayer is not entitled to a CDP/EH.

Frivolous position: A hearing request containing a position identified as frivolous in Notice 2010-33 or any successor notices or revenue rulings.

Desire to delay or impede the administration of federal tax laws: A hearing request containing a statement reflecting a desire to delay or impede the administration of federal tax laws that reflects one or more of the following:

Hybrid: A hearing request where the taxpayer raises at least one relevant issue in addition to frivolous, delaying or impeding issues. Appeals must proceed with a CDP/EH on the relevant issue(s) while disregarding the frivolous/desire-to-delay issues.

See the table below to determine how to proceed with a frivolous or desire to delay CDP request:

Taxpayers may not raise a non-CDP tax period liability by characterizing it as a "relevant issue" under IRC 6330(c)(2)(A). Appeals will not consider the substantive merits of a refund claim for a non-CDP tax period to determine whether there is an overpayment that could be applied to the CDP liability.

Appeals conference practices are found in IRM 8.6.1.4, Conference Techniques Used by Appeals Technical Employees, and the following subsections:

The Substantive Contact (SCL) Letter offers taxpayers the opportunity for an in-person conference. Individual taxpayers who request and qualify for an in-person conference will be accommodated following procedures in , IRM 8.6.1.5.1.1, Circuit Riding, or IRM 8.6.1.5.5, Virtual Service Delivery. Employees will use these procedures to afford taxpayers an in-person conference at an Appeals office closest to their residence or principal place of business.

If the taxpayer is entitled to a CDP hearing but neglects to participate, a review of the documents in the case file constitutes the CDP hearing.

An in-person conference will not be offered in the following circumstances:

Audio recordings are allowed in in-person conferences if a taxpayer provides:

Review Notice 89-51, 1989-1 C.B. 691 for audio recording procedures. While this Notice requires 10 days advanced notice before a conference is to be recorded, Appeals may choose to waive this requirement.

Inform your ATM of audio recording requests and make an audio recording of the conference with IRS equipment.

The right to make an audio recording of an in-person conference does not extend to telephone conferences. If you become aware that a taxpayer or representative is recording or attempting to record a telephone conversation, advise that the recording must stop. If the recording is not stopped, terminate the call and document your case activity record.

Taxpayers raising frivolous issues are not eligible for an in-person conference and thus, not eligible to make an audio recording of an Appeals conference.

Appeals allows stenographic recordings by court reporters provided they have the following credentials and the taxpayer qualifies for an in-person conference:

Appeals audio records any conference where a stenographic recording is made and request a copy of the stenographer's record. If costs involved are too high, do not secure a copy of the stenographer's record.

Additional audio recording procedures for Appeals are found in IRM 8.6.1.6, Audio and Stenographic Recording of Conferences.

Executive Order 13166, "Improving Access to Services for Persons with Limited English Proficiency” requires Federal agencies to:

Guidelines and procedures for implementing Executive Order 13166 are found in IRM 22.31.1, IRS Language Services.

IRS contracts with an outside vendor to provide over-the-phone interpreter (OPI) services in over 170 languages. A conference using the OPI service consists of the Appeals employee, the taxpayer and the interpreter. The OPI service is fast, easy to use and available to everyone in Appeals. Step-by-step instructions for using the OPI service as well as other useful links and information are available on the Appeals Multi-Language Strategy (MLS) web page.

Per guidance issued by Disclosure, a minor child can serve as an interpreter for his/her parent during an Appeals conference.

A CDP may be transferred to an Appeals office with required cultural knowledge even if it does not otherwise qualify for transfer or an in-person conference.

Recognize and be sensitive to taxpayers with issues that require specialized:

A CDP case may be transferred to an Appeals office with necessary industry or legal knowledge even if it does not otherwise qualify for transfer for an in-person conference.

Deadlines in CDP are determined on a case-by-case basis and often communicated in the SCL. Before establishing a deadline, consider:

Allow at least 14 calendar days for a taxpayer to collect and provide information necessary for considering collection alternatives or issues of dispute.

Allow at least 21 calendar days for a taxpayer to file or amend a tax return.

If a taxpayer requests an extension of time to provide information requested, the deadline may be extended.

If a taxpayer fails to provide information requested, proceed based on the information available and note this in your determination/decision. A taxpayer's failure to provide information requested precludes Appeals from considering collection alternatives.

If a taxpayer does not respond to the SCL letter, you must make a second attempt at contact. In such instances, your case history must reflect a minimum of 2 contact attempts.

Letter 4000, Collection Due Process Last Chance Letter, is the preferred method for the second contact attempt. If the second attempt is made by telephone, document it in the CAR.

For the second contact attempt:

A well documented administrative file with copies of all correspondence is critical in such cases. If a taxpayer petitions claiming you did not allow a reasonable opportunity to participate or respond, the Tax Court relies on the administrative file to evaluate whether you abused your discretion.

Select one (or both) of the following paragraphs appropriate to the CDPTD:

Enter the periods for which Appeals does not sustain Collection's timeliness determination in the "Remarks" section of Form 5402.

Procedures for CDPTD paperwork:

Use the table below to determine the closing code for a CDPTD case where Collection considered the CDP request untimely:

Use the table below to determine the closing code for a CDPTD case where Collection considered the CDP request to have been perfected late:

Use the table below to determine the closing code for a CDPTD case where Collection considered the EH request untimely:

Use the table below to determine the closing code for a CDPTD case where Collection considered the CDP request to have been perfected late: