The Collection Due Process hearing provisions give taxpayers an opportunity for an independent review to ensure that the levy or lien action by Collection is warranted and appropriate. In the Collection Field function, attempted contact with the taxpayer and alternative methods for resolving the case, such as installment agreements and offer in compromise, should be considered before levy or lien action is initiated.

IRC 6320 gives taxpayers the right to request a hearing during the 30-day period that begins on the day after the five-business-day period after the filing of a Notice of Federal Tax Lien. Refer to IRM 5.12, Federal Tax Liens and IRM 5.1.9.3.2.1, Timeliness of the CDP Hearing Request.

IRC 6330 gives taxpayers the right to request a hearing during the 30-day period that begins the day after the date of the Notice of Intent to Levy and Notice of Your Right to a Hearing. Refer to IRM 5.11, Notice of Levy.

There are three exceptions to the pre-levy notice requirements of IRC 6330. They are:

In each of the above situations, the taxpayer will be given the opportunity for a CDP hearing within a reasonable period of time after the levy. Refer to IRM 5.1.9.3.13, Jeopardy Levy and SITLP, and IRM 5.1.9.3.14, Disqualified Employment Tax Levy.

There is no right to a hearing when child support obligations are being collected. See IRM 5.11.1.2.2.10, Issuing Notice of Intent to Levy for Child Support Obligations, Balances Due.

If contact is made with the taxpayer after the issuance of the CDP notice, attempt to resolve the account or issue with the taxpayer. In some situations it may be useful to have the group manager intercede in discussions with the taxpayer in an effort to resolve the case. Advise taxpayers entitled to request an appeal under the CDP provisions of the requirements and time frames for filing an appeal. Be sure to let taxpayers know that discussions with Collection do not suspend the running of (or otherwise extend) the 30-day period during which taxpayers may request a CDP hearing. When applicable, consider Fast Track Mediation as an option for resolving the issue with the taxpayer. See IRM 5.1.9.3.8, CDP and Equivalent Hearing Fast Track Mediation (FTM).

If the taxpayer wants to file a request for a hearing,

Taxpayers generally use Form 12153, Request for Collection Due Process or Equivalent Hearing , to request the hearing. This form is included with the CDP notice. If this form is not used, the taxpayer may submit a written request for a CDP hearing signed by the taxpayer or authorized taxpayer representative.

The written request for a hearing must be dated and must include the following information:

For a the tax liability involving a partnership,

The CDP hearing request includes all applicable periods listed on the CDP notice even if not listed on the hearing request. The taxpayer can exclude a specific tax period on the CDP notice if he or she is not disputing the collection action for a specified tax period.

If the taxpayer received a CDP notice for both lien filing and proposed levy action, the taxpayer may appeal both notices. Appeals should consolidate the requests for the CDP hearing.

The taxpayer must send or deliver the CDP hearing request to the IRS office and address as directed on the CDP notice. If the address of that office does not appear on the CDP notice, the taxpayer should obtain the address of the office to which the written request must be sent or delivered by calling the toll-free number on the notice or by calling toll-free, 1-800-829-1040 and providing the taxpayer's identification number (SSN, ITIN, or EIN). If the taxpayer wishes to fax the CDP hearing requests, the taxpayer may request the fax number of the appropriate office from one of these toll-free numbers. The taxpayer may also hand-deliver the request to the local taxpayer assistance center within the 30-day period.

Upon receipt of a written request for a CDP hearing, determine if the request is timely. See IRM 5.1.9.3.2.1, Timeliness of the CDP Hearing Request. If the request is timely, next determine if the request needs to be perfected. If it needs to be perfected, follow the procedures described in IRM 5.1.9.3.2.2, Perfection of Timely CDP Hearing Requests.

If the timely request does not need to be perfected, or the request is timely because it is perfected within the reasonable period specified for perfection, then suspend the CSED. See IRM 5.1.9.3.6, Suspension of Collection Statute of Limitations.

If the request for CDP hearing is untimely, determine if the request qualifies as a timely request for an equivalent hearing. See IRM 5.1.9.3.2.3, Equivalent Hearing and Timeliness of Equivalent Hearing Requests and IRM 5.1.9.3.2.4, Perfection of Timely Equivalent Hearing Requests.

In the following situations, hearing requests need to be sent to Appeals solely for a timeliness determination:

See IRM 5.1.9.3.2.1, Timeliness of the CDP Hearing Request and IRM 5.1.9.3.2.3, Equivalent Hearing and Timeliness of Equivalent Hearing Requests. If Appeals determines that the request was timely, process the hearing request.

If the taxpayer was not issued a CDP notice, contact the taxpayer and advise the taxpayer of his or her available rights such as those available through CAP. If it is determined that the CDP notice the taxpayer received was issued in error, refer to IRM 5.1.9.3.2.5, CDP and Equivalent Hearing Requests in Response to CDP Notices Issued in Error.

Once it is determined that the CDP or equivalent hearing is processable, request update of the CDP Tracking System (CDPTS) to document receipt of the hearing request.

In the situations listed below, the case file for the CDP or equivalent hearing should be promptly forwarded to Appeals (i.e., within 5 business days of the case being ready for Appeals).

In other situations, the taxpayer may be willing to work with Collection to resolve the issue even after the taxpayer has requested a hearing with Appeals. Refer to Treas. Reg. 301.6330–1(c)(2), Q&A C-9 and Treas. Reg. 301.6320-1(c)(2), Q&A C-9. If the taxpayer presents new information or requests collection alternatives not previously considered and if the taxpayer is willing, the revenue officer should work with the taxpayer to see if the issue can be resolved. If the case can be resolved prior to Appeals consideration, it expedites the process for the taxpayer.

If the taxpayer raises doubt as to liability issues (e.g., SFR or audit assessments) or requests relief from liability (e.g., innocent spouse or interest abatements) or claims that a Frivolous Filer Penalty should not have been assessed, request the administrative file (tax return) and forward it with the CDP hearing request. Document in the ICS history attempts to secure the file, in the event they are unsuccessful. This does not apply when the doubt as to liability is based on frivolous or constitutional arguments

In situations where the taxpayer contests the TFRP liability, Appeals will first review the ICS history to determine if Letter 1153 was hand-delivered or mailed. If the Letter 1153 was hand-delivered, the ICS history entry would serve as a contemporaneous recording and prima-facie evidence and, therefore, the taxpayer will not be able to challenge the liability at the CDP hearing. If the Letter 1153 was mailed, Appeals will request a copy of the Letter 1153 and certified mailing listing from Technical Service/Advisory. Appeals must verify that the taxpayer received the Letter 1153.

CDP notices issued by automated levy programs (Federal Payment Levy Program, State Income Tax Levy Program, and Alaska Permanent Fund Program) direct the taxpayer to file the CDP request with the ACS campus CDP units. If a request is received on a case assigned to a revenue officer, the CDP units will document the ICS system notifying the RO of the request. If the RO has had contact with the TP, the RO should contact the CDP unit and they will forward the request to the RO for processing to Appeals, otherwise the CDP unit will process the request. The same procedure applies if ACS issues a CDP levy notice or CDP lien notice and the case is assigned to a revenue officer by the time the CDP request has been received.

Cases referred to Appeals need to be controlled on ICS. Open an Other Investigation (OI) when the CDP case file is forwarded to Appeals. When establishing the OI, use entity sub-code 967 to indicate that the CDP case file has been forwarded to Appeals. An OI should be opened for the CDP modules even if there are other periods open that are not part of the CDP hearing. If other periods close prior to the conclusion of the CDP proceeding, the case will not drop off of ICS.

For timely filed CDP hearing requests, Appeals will input the TC 520 cc 76/77. This will place the module in status 72. The OI serves as a control while the case is pending in Appeals. It also allows Appeals to access ICS to review the case history. Settlement officers will enter into the ICS history when they close a case to the Appeals Team Manager. The ICS entry, when cases are closed, should state: the date and the result of the Appeals determination, whether a waiver (Form 12257, Summary Notice of Determination) was secured and the specifics of the resolution.

For an equivalent hearing no TC 520 is input. The account remains in status 26, so an OI is not required. However, if the account moves out of status 26 while the hearing is still pending in Appeals, an OI is required for the equivalent hearing case.

While cases are pending in Appeals, monitor the case at the following key points:

When following up with Appeals, the RO group manager should e-mail the SO team manager for an update to minimize the possibility of ex parte discussions.

While the case is pending in Appeals, the group manager may want to have the case uniquely assigned within the group for purposes of control and monitoring. In other instances, it may be appropriate to keep the case assigned to the revenue officer.

Revenue officers need to monitor compliance of in-business trust fund cases that they refer to Appeals while the case is pending in Appeals. Subsequent compliance should continue to be documented in the case history. If the taxpayer is assessed additional tax periods while the case is pending in Appeals, determine whether levy action is appropriate and take any necessary actions, such as issuing the pre-levy CDP notice. See IRM 5.7.8, Trust Fund Compliance - In-business Repeater Trust Fund Taxpayer, for additional information on in-business trust fund repeaters.

If the taxpayer files a timely request for a CDP hearing during the IRC 6330 notice period, levy actions on the periods that are the subject of the CDP notice, except in jeopardy situations, levies on state income tax refunds or disqualified employment tax levies, must be suspended during the appeal period and while any court proceedings are pending.

During an appeal to the Tax Court or appellate court, where the underlying tax is not at issue, levy action may continue if the court determines that the Service has shown good cause not to suspend the levy. Counsel will contact Collection if they are considering a motion to permit levy. In addition, if Collection is aware of situations that warrant levying during the judicial appeal, i.e., pyramiding cases where there are leviable assets, Collection should prepare a memo requesting Associate Area Counsel to file or request a motion with the court to allow the Service to take levy action. If the court grants the motion, Counsel will contact the assigned revenue officer so that levy action can proceed immediately.

Levy action is suspended only for the tax periods that are the subject of the CDP hearing. Levy action can continue on tax periods not subject to the CDP hearing, provided all pre-levy notifications have been met. When it is identified that collection is at risk, Collection personnel should initiate the appropriate actions to protect the government's interest. Evidence that the taxpayer is dissipating assets or pyramiding additional tax liabilities while in Appeals are indicators that collection may be at risk. See IRM 5.7.8, Trust Fund Compliance - In-Business Repeater Trust Fund Taxpayers for additional information.

Prior to initiating levy action against the non-CDP tax modules, check IDRS for actions that may prohibit levy action, i.e., TC 480 (OIC) or TC 971 ac 043 (PPAGR). If there is no evidence on TXMODs of actions in Appeals that would be grounds to delay or prohibit enforcement, then contact the Appeals Team Manager of the assigned hearing officer, preferably via e-mail, to advise them that levy action is planned. Determine whether Appeals has new information that may prohibit levy or may affect the decision to levy. For example, if Appeals has determined economic hardship within the meaning of IRC 6343 or secured an installment agreement or offer in compromise, levy action is not appropriate. The group manager must concur with the planned levy action during the CDP hearing.

When a taxpayer files a timely request for a CDP hearing during the IRC 6320 notice period, levy actions are not required to be suspended. Refer to Treas. Reg., 301.6320-1(g)(2) Q&A G3. As a general rule, levy action is suspended pending the Appeals determination on the lien. Levy action can be taken if it is determined that collection is at risk. Prior to initiating levy action against the tax modules that are the subject of a CDP hearing under IRC 6320, check IDRS for actions that may prohibit levy action, i.e., TC 480 (OIC) or TC 971 ac 043 (PPAGR). If there is no evidence on TXMODs of actions in Appeals that would be grounds to delay or prohibit enforcement, then contact the Appeals Team Manager of the assigned hearing officer, preferably via e-mail, to advise them that levy action is planned. Determine whether Appeals has new information that may affect the decision to levy. For example, if Appeals has determined economic hardship within the meaning of IRC 6343 or secured an installment agreement or offer in compromise, levy action is not appropriate.

In joint liability situations, where only one spouse has requested a CDP hearing, levy action can continue with respect to the spouse who has not requested a CDP hearing. This may occur in situations where the spouses are separated or divorced. Otherwise, levy action will generally be suspended for both spouses. If the hearing request was intended to cover both taxpayers, the CDP hearing request can be amended to list both spouses. The spouse whose name is added should also sign the request for a CDP hearing.

In a situation where a levy has been issued, and then the taxpayer files an appeal, either a timely CDP hearing under IRC 6320 or an equivalent hearing under IRC 6320 or 6330, determine if the levy should be released.

Levy action during an equivalent hearing is not required to be suspended. However, as a general rule, even though not required by statute, levy action is generally suspended pending the Appeals determination. Levy action can be taken if it is determined to be appropriate in the situation. Levy action may be appropriate if:

Prior to initiating levy action, advise Appeals that levy action is planned. Check with Appeals to determine whether they have new information that may prohibit levy or may affect the decision to levy. For example, if Appeals has determined economic hardship or secured an installment agreement or offer in compromise, levy action is not appropriate. The group manager must concur with the planned levy action during the equivalent hearing.

Actions under automated levy programs, such as the State Income Tax Levy Program (SITLP) and the Federal Payment Levy Program (FPLP), are not suspended during an equivalent hearing. If appropriate, the automated levy block, TC 971 AC 061, can be placed on each appropriate module. Refer to IRM 5.11.7, Automated Levy Programs.

If the taxpayer alleges economic hardship under section 6343, consider whether return of levied property is appropriate. In a situation where a levy is pending when the taxpayer files a request for an equivalent hearing, determine if the levy should be released.

The statute of limitations is suspended from the date the Service receives a timely request for a CDP hearing to the date the taxpayer withdraws his or her request for a CDP hearing or the date the determination from Appeals becomes final, including any litigation. The Collection Statute Expiration Date (CSED) is suspended even if the account is full paid as long as the taxpayer does not agree with the offset/payment that full paid the account.

Upon receipt of a hearing request, determine if the collection statute needs to be suspended. The collection statute is suspended only when a taxpayer files a timely request for a CDP hearing. The collection statute is not suspended on equivalent hearing cases.

When the CDP collection statute suspension occurs at the same time but differs with other applicable collection statute suspensions, e.g., those under the innocent spouse provisions of IRC 6015 or bankruptcy, the latest suspension period controls.

When a corporation/partnership owing trust fund taxes requests a CDP hearing or equivalent hearing (EH), the Trust Fund Recovery Penalty (TFRP) needs to be addressed. There is no prohibition against asserting the TFRP against responsible officers while the CDP/EH is pending. Since the statutory period of limitations for assessing the TFRP is not suspended while the CDP/EH hearing is pending, the TFRP investigation should continue unless the revenue officer has a reasonable expectation of the account being fully satisfied.

The revenue officer should note in the case history whether or not the TFRP investigation is continuing. The investigation can proceed as far as the assertion of the penalty against each responsible person. This includes providing each responsible person with his or her TFRP appeal rights. Before proceeding with assessment of the TFRP, the revenue officer needs to contact Appeals to determine if there is any new information that would affect the decision to assess. In some instances, it may be appropriate to withhold assessment of the TFRP pending the outcome of the hearing.

FTM is available to taxpayers that qualify for a CDP or equivalent hearing. A taxpayer can request FTM after a CDP notice is issued. Advise taxpayers considering FTM, that a request for FTM does not extend the time for filing a request for a CDP hearing. Taxpayers requesting FTM during the time period for filing a CDP hearing request must also submit a hearing request to preserve their right to a hearing.

After a request for a hearing is filed, taxpayers can request FTM before the case is transferred to Appeals.

For a CDP case to qualify for FTM, the taxpayer must have filed all required returns and must be current with employment tax deposits (i.e., are not pyramiding additional employment tax liabilities). In addition, the taxpayer must present complete information regarding the proposed resolution, such as complete financial information. If the taxpayer meets the requirements, the revenue officer may offer the taxpayer the option of using FTM to expedite resolution of the case. This can be done by explaining the FTM option to the taxpayer and providing the taxpayer with Publication 3605, Fast Track Mediation.

Prior to FTM the taxpayer may first request a conference with the manager. If resolution is not reached, the taxpayer can submit a request for FTM. Both the taxpayer and the RO must sign an agreement to mediate prior to mediation being scheduled. Collection does not have to agree to mediation. However, denial of a mediation request requires approval of the group manager and concurrence by the second level manager. The basis for the denial will be communicated to the taxpayer and documented in the case history.

If Fast Track Mediation is recommended, Collection employees will be responsible for completing Form 13369, Agreement to Mediate, and a brief summary of issues. The summary is done in a memorandum form. Forward both documents to Appeals. Mediators (Appeals employees) will conduct the session; however, they will not have settlement authority. The taxpayer does not have the option of using a non-IRS employee as a mediator. Both parties must agree in order to reach a resolution. Taxpayers need to be advised that if mediation results in an agreement between the taxpayer and Collection, the taxpayer must withdraw the hearing request as part of the final agreement or no agreement will be reached and the case will be forwarded to Appeals for the CDP hearing.

The signed Agreement to Mediate and Summary of Issues should be forwarded to the local Appeals Office within three business days of obtaining the taxpayer's signature. Jurisdiction and statute of limitation responsibility remains with Collection and, therefore, the case file is not forwarded to Appeals. Local Appeals and Collection offices will work out their own procedures for prompt transmittal of cases to the local Appeals office.

Collection will send a copy of the Agreement to Mediate to the taxpayer or representative. The mediator will attempt to schedule the mediation session with the taxpayer and Collection within five business days after the case is assigned in Appeals. Generally, the mediation begins with an initial joint discussion at which all parties are present. Both the taxpayer and Collection will be given time to present their position. After the initial joint discussion, the mediator may hold individual discussions with the parties. At any time, either party may withdraw from the process prior to reaching a resolution by notifying the other party and the mediator in writing. The entire process normally takes an average of 30-40 days to complete. If the mediation session cannot be held within a reasonable amount of time, the mediator may consider returning the request. The mediator will attempt to bring the parties to a mutual resolution of the issues during the mediation session. If, after a reasonable time, it is apparent that the parties will not reach resolution, the mediator may terminate the mediation session and the case will be referred to Appeals for the CDP hearing. If resolution is reached, the taxpayer needs to withdraw the hearing request to finalize the agreement. If the taxpayer does not withdraw the request for a hearing, the case goes forward to Appeals.

Refer to Rev. Proc. 2003-41, 2003-1 C.B 1047, SB/SE - Appeals Fast Track Mediation Procedures, for additional information.

Appeals will make the final determination about timeliness of a CDP or equivalent hearing request. If the CDP hearing request is timely, the taxpayer will receive a CDP hearing. If the CDP hearing request is untimely, the taxpayer will receive an equivalent hearing if the taxpayer wants one. In both instances, the hearing is held by the Office of Appeals. It is conducted by an officer or employee who has had no prior involvement with respect to the unpaid tax. However, the taxpayer may waive this requirement.

To the extent practicable, a hearing under IRC 6320 shall be held in conjunction with a hearing under IRC 6330.

The appeals officer is required to verify that the requirements of the Internal Revenue Code or administrative procedure with respect to the proposed collection action have been met. Appeals will verify that the taxpayer has a tax liability for the period and its amount and that procedures for filing the NFTL or issuing the L-1058 have been met, so completion of preliminary actions must be documented. Appeals will rely on the information in the case file or will seek clarification of items that appear to be incomplete within the case file.

Collection will secure information pertaining to the taxpayer's appeal, such as verification of financial information and courthouse check. Appeals will request this information via an Appeals Referral Investigation (ARI) or Form 2209, Courtesy Investigation. The request will state the specific information requested. If additional contact with the taxpayer is needed, Collection will make the contact on behalf of Appeals.

During the appeal process, the taxpayer or his or her representative may raise at the hearing any relevant issue relating to the unpaid tax or the proposed levy, including:

The taxpayer may also raise issues related to an economic hardship determination.

The taxpayer may also raise challenges to the existence or amount of the underlying tax liability including a liability reported on a self-filed return for any tax period specified on the CDP notice if he or she did not receive a statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability.

A non-liability issue may not be raised at the hearing if:

The Appeals determination will take into consideration the following:

For a timely filed due process hearing, the taxpayer will receive a Notice of Determination letter that explains the taxpayer’s right to petition Tax Court within 30 days of the date of the letter.

For an equivalent hearing, the taxpayer will receive a decision letter. In an equivalent hearing, the decision by Appeals is final, and there is no appeal to court, except as it relates to certain spousal defenses under IRC 6015 (if a petition is filed within 90 days after notice of determination is issued), denial of a request for interest abatement (if a petition is filed within 180 days after denial), or if the taxpayer disagrees with Appeals' decision that the taxpayer's CDP hearing request was not timely.

In both the Notice of Determination letter and decision letter, Appeals will provide clear information regarding any agreement reached with the taxpayer, any relief given, and any necessary actions required by Collection. If the tax liability is upheld or the enforcement action is appropriate, the letter will so state, even if the appeals officer decides to provide the taxpayer a different collection alternative. The letter will also set forth specific ramifications should the taxpayer not comply with the terms of the agreement.

Appeals will generally follow the Service guidelines for collection set forth in the Internal Revenue Manual (IRM). Appeals, however, also considers the impact of the hazards of litigation, which may be applicable especially if tax liability is the issue. In addition, Appeals is required to balance tax collection needs with the legitimate concerns of the taxpayer that any collection action be no more intrusive than necessary and renders its determination accordingly.

Appeals will update the ICS history when a determination or a decision has been reached. For CDP cases, this is provided as information only. No action in a CDP case should be taken to implement the determination until after the Notice of Determination is final, including any court appeals, and the case file is returned to Collection. If there are any questions regarding the determination, contact the Appeals employee for clarification. ICS entries by Appeals are not intended to invite discussion or comment by Collection. Such a discussion could be interpreted as a prohibited " ex parte" discussion between Appeals and Collection.

After Appeals makes its determination in a CDP hearing, the taxpayer may, within 30 days of the date of the determination letter, petition the Tax Court.

To allow time to be notified of any court petitions, Appeals will hold cases subject to Tax Court review for an additional 30 days (60 days after issuance of the Notice of Determination). If the taxpayer reaches an agreement with Appeals and does not wish to go to court, Appeals employees may use Form 12257, which serves as a summary Notice of Determination, and waives the right to go to court and the suspension of levy action. If the taxpayer waives the right to judicial review, the determination is final and the case can be returned to collection.

If a taxpayer files an appeal to Tax Court, Appeals updates the CDP tracking system to Stage 8, Tax Court Appeal. Collection can check the status on the CDP tracking system to identify cases where a judicial appeal has been filed or they can call the Appeals office to determine the status of the case.

In an equivalent hearing, the decision is final when Appeals issues its decision letter, except as it relates to certain spousal defenses under IRC 6015, denials of interest abatement under IRC 6404.

Once the hearing determination is final, Appeals will send the case to the Appeals Processing Service (APS) for backend processing. APS will input the TC 521, when applicable. If the case is resolved in Appeals, i.e., Appeals secured a collection alternative or other resolution that resolved the case, APS will take the necessary closing actions. APS will forward the file to the referring Collection group with a copy of the Notice of Determination or decision letter, as applicable, and a copy of the Appeals Case Memo (ACM), when applicable.

APS will update the CDPTS to Stage 13, Appeals Case Closed - Sent to Collection. Effective January 24, 2003, when Appeals updates the CDPTS to Stage 13, a TC 971 is systemically generated with action code 277 if it is a CDP request, or action code 280 if it is an equivalent hearing. These action codes identify when the hearing request is closed in Appeals. In addition, if resolution is reached, Appeals will update the case to Stage 24.

Upon receipt of the case back from Appeals, acknowledge receipt of the case on the CDPTS by requesting input of Stage 14, Closed Case Rec'd from Appeals. Form 12153-A can be used to request input of Stage 14. Refer to IRM 5.1.9.3.3.3, Form 12153-A, Referral Request for CDP Hearing and Request for CDPTS Input.

The revenue officer will review the determination and document a plan of action with respect to the determination. Keep the OI for the CDP case open until all closing actions are taken by Appeals or the case is returned to inventory. If the closing action isn't taken or case returned within a reasonable time after the determination, i.e., 90 days, follow-up to determine the reason for delay.

The Office of Appeals retains jurisdiction with respect to any Notice of Determination issued under IRC 6320 or IRC 6330, including subsequent appeals requested by the taxpayer who requested the original Collection Due Process hearing on issues regarding:

Taxpayers, who request subsequent review of their case by Appeals under the changed circumstance provision under retained jurisdiction, must first exhaust all administrative remedies, such as having a conference with the Collection manager.

If there has been a change in circumstances with respect to the taxpayer affecting the 6320 or 6330 determination, Appeals, under the retained jurisdiction provision, may consider only those issues that were raised and considered at the previous hearing.

The statutory period for collection is not suspended during the retained jurisdiction proceeding.

Lien and levy actions are not required by statute to be suspended. However, as a policy matter, even when not required by statute, levy action is generally suspended unless collection is at risk. When it is identified that collection is at risk, Collection personnel should initiate the appropriate actions to protect the government's interest. Evidence that the taxpayer is dissipating assets is an example where collection is at risk. Also, pyramiding of additional tax liabilities, including unpaid employment tax deposits and unfiled tax returns while in Appeals, are indicators that collection may be at risk. See IRM 5.7.8, In-Business Trust Fund Taxpayers,for additional information regarding in-business trust fund taxpayers. The group manager must concur with the planned levy action during the appeal. Appeals must be advised immediately of any decision to take levy action.

Actions under automated levy programs, such as the State Income Tax Levy Program (SITLP) and the Federal Payment Levy Program (FPLP), are not suspended during a retained jurisdiction hearing. Appeals can address the lien or levy action during the retained jurisdiction hearing.

Similar to a Collection Appeal Program (CAP) appeal (see IRM 5.1.9.4), the taxpayer will receive a letter upon completion of the review under the retained jurisdiction provision. The decision by Appeals is final with no judicial review.

There are three exceptions to the pre-levy notice requirements of IRC 6330. They are:

In the above situations, when the taxpayer has not previously received a 6330 Notice of Intent to Levy and Notice of Your Right to a Hearing, the taxpayer will be given the opportunity for a hearing within a reasonable period of time after the levy. In a jeopardy levy situation, the taxpayer receives Letter 2439 which advises the taxpayer of the right to request a hearing under IRC 6330. Under SITLP, the taxpayer receives CP 92 or CP 242, Notice of Levy on Your State Tax Refund, Notice of Your Right to a Hearing. Refer to the Notice of Levy Handbook, IRM 5.11.3, Jeopardy Levy Without a Jeopardy Assessment.

A disqualified employment tax levy (DETL) is comprised of these three components:

Even if a taxpayer's employment tax liabilities meet the criteria for a DETL, this action is discretionary. The Service has the option to issue a pre-levy CDP notice for DETL periods, if the situation warrants. For example, the issuance of a pre-levy notice ight be advisable if no IRC 6331(d) notice has been issued or there has been no contact with the taxpayer within the last 180 days.

The prior request refers to a timely, processable CDP hearing request. Refer to IRM 5.1.9 for information regarding the timeliness and processability of CDP hearing requests. Even if the request is subsequently withdrawn, it qualifies as a prior hearing request.

The following can be helpful in determining if the taxpayer requested a prior CDP levy hearing involving unpaid employment taxes.

In addition to seeing if the taxpayer requested a CDP levy hearing from a pre- or post-levy CDP notice, check to see if the hearing request involved employment taxes arising and ending within the two-year period before the beginning of the taxable period for which the DETL is served. The two-year look back period is measured from the beginning of the period for which the DETL is served. If the taxpayer requested a CDP levy hearing for employment taxes arising during a calendar quarter that ended during the two-year period, the module meets the criteria for a DETL.

If a DETL is served, the post-levy CDP notice is sent with the taxpayer’s copy of the levy. This should be done as soon as possible but no more than 10-days after the levy. Letter 1058-D, Notice of Levy and Notice of Your Right to a Hearing is used to provide post levy CDP rights. If using the mail to deliver the post-levy CDP notice, it should be sent to the taxpayer's last known address by certified or registered mail. Use Letter 1058(D), Notice of Levy and Notice of Your Right to a Hearing. Include a copy of the levy, Form 12153, Pub 594 and Pub 1660 with the letter. Note: If the taxpayer received a pre-levy CDP notice for the period being levied, do not issue a post-levy CDP notice.

Process the post-levy DETL hearing request in the same way as other hearing requests. If a timely filed post-levy CDP hearing request is filed, the CSED is suspended. Document, for the benefit of Appeals, either in the case history or on Form 12153-A, whether continued collection action is planned.

A DETL may be served during a timely requested pre- or post-levy CDP hearing or judicial review of such hearing to collect employment tax liabilities (DETL tax periods) subject to the hearing. For example, a DETL may be served during a hearing or judicial review if collection is at risk (e.g., taxpayer’s business is deteriorating or taxpayer is pyramiding).

The taxpayer must first discuss the case with the Collection manager.

If agreement is not reached at the manager conference, advise the taxpayer that he or she 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, and explain that the completed request needs to be submitted within two business days from the manager conference or collection action may resume, except for appeals related to installment agreements. Due to the short time frame taxpayers may want to submit the Form 9423 at the conference or via fax. Collection must send the case to Appeals within two business days of receipt of the taxpayer's Form 9423 request. Local Appeals and field Collection functions have worked out their own procedures for prompt transmittal of cases to the local Appeals Office.

While the stay of collection is no longer required two business days after the conference, taxpayers are still entitled to a CAP appeal if their Form 9423 (or other written request) is received in a reasonable time after the manager conference, i.e., ten business days. Requests that come in after the time frame may be the result of continuing collection action and may qualify as a new CAP request if new issues are raised.

For installment agreement appeals, the taxpayer has 30 days to appeal. During that time and during a timely requested appeal, levy action is prohibited by statute.

The information needed for a CAP appeal will be faxed to the Appeals Office. Generally, a copy of the entire case file is not necessary and is burdensome. Collection and Appeals, on a case by case basis, will determine together what portion of the file needs to be transmitted to Appeals to adequately consider the appeal. At a minimum, the appeals file should include:

Collection no longer needs to provide paper copies of the following:

The Appeals organization tries to resolve CAP cases within 5 business days unless there are case complexities that require more time for quality case consideration. Appeals will attempt to hold a conference with the taxpayer within 2 days of receipt of the case. However, if the taxpayer requests a conference delay, and it is warranted, then a reasonable delay will be allowed. Usually, such a delay should not exceed 5 business days. If the taxpayer does not elect a conference within the time limits given, Appeals will return the case to Collection as a premature referral.

The short time frames have been set to give taxpayers an almost immediate decision on liens, levies, seizures, and rejection or termination of installment agreements. It also helps to ensure that taxpayers do not appeal solely to delay collection.

Levy action during a CAP appeal will be suspended when required by law, for example, when the 30-day time period for rejection or termination of an installment agreement is running.

When levy action is being appealed, further levy action is generally suspended while the case is in Appeals unless collection is at risk. When a lien filing is the subject of the appeal, further lien action is generally withheld unless collection is at risk. When collection is at risk, Collection personnel should initiate the appropriate actions to protect the government's interests. Evidence that the taxpayer is dissipating assets is an example where collection is at risk. Also, pyramiding of additional tax liabilities, including unpaid employment tax deposits and unfiled tax returns while in Appeals, are indicators that collection may be at risk. The group manager must concur with the planned action during the appeal. Appeals must be contacted prior to taking levy or lien action to determine if they have any new information from the taxpayer that may affect the decision.

The filing of a Notice of Federal Tax Lien should be delayed during a CAP appeal about the NFTL filing if there is no imminent danger to the government losing priority.

Appeals may contact revenue officers to seek clarification of an illegible or unclear statement in the file or to question them about procedural matters.

Appeals will review the case based on law, regulations, policy, and procedures (National and local), considering all the facts and circumstances. Local procedures will only be considered if they are written and in accordance with the IRM.

Judgment is likely to be an issue on these types of cases, although they can also involve legal or procedural issues. Appeals may reverse Collection’s action if evaluation of the taxpayer’s history and current facts and circumstances reveal a more appropriate solution.

Appeals will inform both Collection and the taxpayer of it's decision as soon as possible within the 5 business day time frame. Appeals will contact Collection immediately upon making a decision. The decision may be given orally followed by a written closing letter or through faxing of the appropriate decision documents.

If Appeals has sustained the collection action, enforcement action may resume upon receipt of the decision, unless otherwise prohibited. For example, if the 30–day time period after rejection of an installment agreement is still running, levy action is prohibited during that time. Otherwise, the decision made by Appeals will be implemented. Appeals will give the closing letter to the taxpayer with a copy to Collection. The closing letter should clearly outline any agreement reached with the taxpayer. In cases where a Form 911, Request for Taxpayer Advocate Service Assistance, has been filed by the taxpayer, Appeals will give a copy of the closing letter to the controlling Taxpayer Advocate Office.

Decisions by Appeals are binding on the taxpayer and Collection. Collection will take the actions directed by the Appeals decision. However, if the taxpayer defaults on the decision directed by Appeals, Collection is released from the terms of the agreement. The taxpayer may not appeal the same issue under CAP once Appeals has decided the issue on the same factual basis, e.g., a subsequent levy on the same asset.

Should taxpayers withhold pertinent information or frame a false representation, any agreement made on behalf of the Service will be voidable. Before Collection declares an agreement void under this provision, the Collection group manager will confer with Appeals. If Appeals sustains Collection’s determination, then enforcement action may resume immediately.

If there is concern or disagreement with respect to a decision reached by Appeals in a particular case, local management in Collection and Appeals should work to address concerns and resolve disagreements. If resolution cannot be reached informally at the local level, then a formal process is available to elevate concerns and issues to Appeals.

Prepare a written dissent within 90 days of receiving the Appeals decision/Appeals Case Memorandum (ACM) (extensions of the 90-day time frame may be mutually agreed upon). The written dissent needs to clearly outline the nature of the dissent and the supporting rationale including:

Field Collection will forward the written dissent through the SB/SE Territory Manager and Collection Area Director to the appropriate Appeals Area Director. AIQ (Advisory Insolvency and Quality) will forward the written dissent to the AIQ Area Manager. The Appeals Area Director will provide a written response to the Collection Area Director or the AIQ Area Manager, Area Director generally within 90 days of receipt of the written dissent.

The Appeals decision will generally be implemented while the decision is being elevated for review. If the situation warrants a delay in implementation, alert Appeals so that Appeals can expedite review of the decision.

Once Collection receives the response, they may request a post-Appeals conference by contacting the Appeals Area Director within 15 days.

Concerns regarding Appeals decisions not satisfactorily addressed through this process need to be brought to Headquarters attention. They should be forwarded to the Program Director, General Payment and Process Analysis, Collection Policy. These procedures do not preclude any activities already in place involving Advisory Boards or the exchange of information between Collection analysts and Appeals analysts.

Revenue officer groups are authorized to have employees research the status of a CDP case via the IRS intranet at http://CDP.web.irs.gov. The employee needs to be profiled with IDRS command code CDPTA and the workstation needs to be set up to access CDPWEB.

Employees authorized for IDRS command code CDPTR with definer ″T″ can use this command code to research the status of a CDP case that is part of the CDPTS using standard IDRS terminals. This command code provides a summary of the CDP accounts that are on the CDPTS and the current stage of the case.

Employees who input data to the CDP Tracking System, input the data to IDRS via the IRS intranet at http://CDP.web.irs.gov. For data input, the employee needs to be profiled for the following IDRS commands: CDPTA, CDPTE. To delete an entire case record, command code CDPTD may also be needed.

To set up a workstation to access CDPWeb, refer to the configuration instructions available in the CDP web site.

Follow the prompts to sign on to the CDPWeb. Since it is an IDRS based system, the sign on is similar to IDRS. It uses your IDRS password to log in to the program.

The CDPWeb consists of various web screens that guide the user accessing the system. Data are entered via the keyboard or by selecting from available options in drop-down menus.

Data are entered by stage. Once the data has been saved, corrections and deletions can also be made at the stage level. When a change is made, a historical comment (HC) is maintained that keeps a record of the original entry. In addition, short comments can be added using the Add Comment feature to explain any corrections or deletions.

To query case information using the CDP Web, go to the request TIN screen and submit the taxpayer's TIN. This will bring up a listing of cases present on the tracking system. The listing identifies the latest stage for each tax period present on the system. To get more detailed information on a particular tax period, select a view of the detail screen. The detail screen lists all the stages for a specific tax period. The edit view will bring up the stage screen for the stage requested.

To sign off the CDP tracking system, click on the IDRS sign-off tab and follow the prompts.

Cases are added to the CDPTS at Stage 1, Hearing Request Received.

Revenue officers submit their request to CCP to update the CDPTS upon receipt of a valid hearing request. To request input to the CDPTS, a job aid for revenue officers is available on ICS. Cases should be added to the CDPTS as soon as practical but no later than 10 business days from receipt.

The taxpayer account should be present on IDRS when adding a case to the CDPTS.

Each tax module that is part of the hearing request needs to be added to the CDPTS.

Effective March 17, 2008, when the module is added to the CDPTS, a TC 971 is systemically generated with action code 275 if it is a CDP lien request, action codes 275 and 630 if it includes a CDP levy request, action code 278 if it is an equivalent hearing request. These action codes identify when hearing request is received and they are also used to exclude module(s) from selection by automated levy programs when appropriate.

Taxpayers are encouraged to work with the collecting office even after requesting a CDP hearing. If the issue can be resolved and the taxpayer agrees, the request does not need to go forward to Appeals. In the case of a CDP hearing request, the taxpayer's decision to withdraw the CDP hearing request must be in writing.

When the case is resolved, the collecting function handling the request updates the CDPTS to Stage 12, Case Resolved Prior to Appeals Consideration. Revenue officers submit their request to CCP to update the CDPTS. Updates to CDPTS are made as soon as practical but no later than 10 business days after the resolution of the hearing request.

Stage 12 is not applicable if the hearing has been held, i.e., Stage 7 is present.

Stage 12 is a final stage. It indicates that the case has been resolved. No further stages are applicable.

Effective January 24, 2003, when the module is updated on the CDPTS to Stage 12, Resolved Prior to Appeals Consideration, a TC 971 is systemically generated with action code 276 if it is a CDP request or action 279 if it is an equivalent hearing. These action codes identify when the hearing request is resolved prior to Appeals consideration.

If the hearing issue cannot be resolved or if it is resolved but the taxpayer does not withdraw the hearing request, the collecting office refers the case to Appeals. When the case is transferred from the collecting office to Appeals, the CDPTS must be updated to Stage 3, Transferred To, to show the transfer. Revenue officers submit their request to update the CDPTS to CCP for input. Cases should be updated to Stage 3 when the case is transferred to Appeals. Appeals will return cases that have not been updated on the tracking system.

When the case is received in Appeals, Appeals updates the CDPTS to Stage 4, Received By.

Stage 3 and Stage 4 can be used when transferring cases between offices.

Stage 4 must always follow Stage 3.

When the case is closed in Appeals, Appeals will update the CDPTS to Stage 13, Appeals Case Closed, Sent to Collection.

Collection acknowledges receipt of the closed case by updating the CDPTS to Stage 14, Closed Case Rec'd from Appeals. Cases should be updated to Stage 14 as soon as practical but no later than 10 business days after receipt.

When the case is returned from Appeals, if a question arises regarding the planned resolution, contact Appeals for clarification. If the case needs to be returned to Appeals, Appeals will need to delete their Stage 13. Once the Stage 13 is deleted, transfer the case back to Appeals in Stage 3. If Stage 14 has been entered, delete Stage 14, then have Appeals delete Stage 13.

Once the case is in Appeals, Appeals will update the CDPTS regarding the case status.

Stage updates in Appeals, include stages 4, 7, 8, 9, and 13.