Part 5. Collecting Process

Chapter 12. Federal Tax Liens

Section 1. Lien Appeals

5.12.1  Lien Appeals

5.12.1.1  (06-24-2005)
Appealing the Notice of Federal Tax Lien

  1. Taxpayers may have two ways to appeal certain collection actions.

    1. Collection Due Process Hearing, and the

    2. Collection Appeals Program.

  2. Revenue officers and customer service employees should discuss the Collection Appeals Program and Collection Due Process appeal rights with taxpayers.

  3. Taxpayers may also contact the Taxpayer Advocate Service for assistance. See IRM 5.12.1.4 and IRM 13.1.7.2.

5.12.1.2  (01-09-2009)
Collection Due Process (CDP)

  1. Under IRC § 6320, the Internal Revenue Service must notify taxpayers in writing of their right to a Collection Due Process (CDP) Hearing with the Office of Appeals within 5 business days of the filing of a Notice of Federal Tax Lien. When a taxpayer timely requests a CDP hearing the taxpayer has a right to judicial review of the Appeals determination.

  2. Taxpayers may be entitled to a collection due process hearing if a timely request for a hearing is received. Otherwise, an equivalent hearing may be available. See IRM 5.1.9.3.2.3, Equivalent Hearing and Timeliness of Equivalent Hearing Request.

  3. The taxpayer cannot file for judicial review of a decision from an equivalent hearing unless the issue raised in the hearing provides for judicial review, i.e., taxpayer raises spousal defense under IRC § 6015.

  4. The CDP notice must be sent to the taxpayer within 5 business daysafter the NFTL is filed with the local recording office. The notice must be:

    1. Given in person

    2. Left at the taxpayer's residence or usual place of business, or

    3. Sent by certified or registered mail to the taxpayer's last known address.

  5. The notice will include:

    1. The amount of unpaid tax.

    2. The right to request a hearing during a 30-day period beginning after the 5-day period described in (4) above.

    3. Administrative appeals (e.g., meet with the employee's supervisor, Collection Appeals Program, etc.) available to the taxpayer with respect to the lien and procedures relating to such appeals.

    4. The provisions of IRC §§ 6320 and 6330 that relate to a CDP hearing and the provisions of the Internal Revenue Code relating to release of liens. (These provisions are explained in Publication 1660).

5.12.1.2.1  (12-09-2003)
Hearing Issues

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

  2. See IRM 5.1.9.3.9``, Appeal Process, for additional information on this issue.

5.12.1.2.2  (01-09-2009)
Requirement of Investigation

  1. If the taxpayer requests a CDP hearing, Appeals must verify that procedures with respect to the filing of the lien and providing notice regarding the lien filing have been met.

  2. You may be asked to clarify certain issues.

  3. See IRM 5.1.9.3.9, Appeal Process, for additional information on this issue.

5.12.1.2.3  (01-09-2009)
Judicial Review of Determination

  1. The taxpayer has 30 days from the date of the notice of determination by the Appeals Officer to appeal. The determination must be appealed to the U. S. Tax Court.

  2. The Office of Appeals retains jurisdiction with respect to a lien determination, including subsequent hearings requested by the person who requested the original hearing on issues regarding:

    1. collection actions taken or proposed with respect to the Appeal determination, and,

    2. changes in circumstances of the taxpayer that affect the Appeal determination after the person has exhausted all administrative remedies, i.e., CAP.

  3. See IRM 5.1.9.3.12, Jurisdiction Retained by Appeals, for additional information.

5.12.1.2.4  (01-09-2009)
Suspension of Collection Period of Limitations

  1. If a hearing is timely requested, the running of the period of limitation will be suspended starting on the date the hearing request is received. The suspension will end when the decision of the Appeals office becomes final, i.e., 30 days after issuance of the determination if it is not appealed to the Tax Court. If appealed to the Tax Court, the suspension ends when the decision in the case becomes final. Notwithstanding the above, the period of limitation for collection will not expire before 90 days after a determination becomes final.

  2. Levy action is not required to be suspended during a lien hearing. Levy action is, however, generally suspended pending the Appeals determination. Levy action can be taken if it is determined that collection is at risk.

  3. For more information see IRM 5.1.9.3.5(5) and Treasury Reg. §301.6320-1(g).

5.12.1.2.5  (01-09-2009)
When is the CDP Notice (L3172) Generated

  1. The CDP notice, L3172, Notice of Federal Tax Lien Filing and Your Rights to a Hearing Under IRC 6320, is generated:

    1. when the original lien filing is requested;

    2. only once if liens are filed in multiple jurisdictions for the same tax period;

    3. only for the first NFTL filed after 1/18/1999 (even if a NFTL was previously filed for the same taxable period before the effective date).

    4. when subsequent assessments are made and a NFTL is requested;

    5. for individual taxpayers;

      Note:

      When there is a joint liability each spouse will be sent the same notice in a separate envelope addressed respectively to each spouse at their last known address.

    6. for partnerships, (See IRM 5.12.1.2.7(2) for procedures to create CDP notices for general partners.);

    7. for limited liability companies,

      Note:

      For assessments of employment taxes in the name and EIN of a single member LLC, you must determine whether the LLC or the owner of the LLC is the liable taxpayer prior to requesting the NFTL. To ensure the CDP notice is sent to the correct taxpayer, select the name and last known address of the liable taxpayer when requesting the NFTL. Guidance on determining the liable taxpayer for an LLC is found in IRM 5.1.21, Collecting from Limited Liability Companies. If you have difficulty determining who should be identified on the NFTL, contact Collection Advisory or Area Counsel.

    8. and corporations.

  2. CDP notices list the same tax period, type of tax, and unpaid balance of assessment listed on the NFTL. If a subsequent NFTL is requested with tax periods where a CDP notice was previously issued and additional tax periods are included in the new NFTL request, where a CDP notice was not issued, the Automated Lien System (ALS) will generate a L3172. The taxpayer is only entitled to a hearing for the tax period for which a notice was not previously issued. If a hearing is requested, include copies of previously issued tax liens and CDP notices in the Appeals case file.

    Example: A NFTL was issued for John and Nancy Smith for tax periods 30 200112, 30 200212, and 30 200412 on July 15, 2006 in Washington County, IA. A CDP notice listing all periods was mailed to both taxpayers. A second NFTL is filed on May 20, 2007 in Marshall County, IA for tax periods 30 200112, 30 200212, 30 200312, 30 200412, and 30 200512. A CDP notice listing all periods, including those where a CDP notice was previously issued, is mailed to both taxpayers. If a hearing is requested based on the second CDP notice, the taxpayers are only entitled to a hearing for 30 200312 and 30 200512, because the other periods were covered in the first notice.

    Note:

    ALS does not exclude any tax period listed on the NFTL even though a CDP notice was previously issued.

  3. The notice for a right to a hearing will not be generated for refiled or estate tax liens.

  4. The L3172 can be printed one business day after the NFTL is printed. It must be mailed no later than four business days after it is available for printing.

  5. TC 582 indicates that a NFTL was requested. When the NFTL is requested through ALS, it is also an indication that the L3172 generated. Check with the Centralized Lien Unit to determine when the notice was mailed.

  6. Facsimile copies may be generated by revenue officers and other employees with access to ALS, as necessary.

5.12.1.2.6  (01-09-2009)
Issuing the CDP Notice

  1. The Service is required to notify taxpayers after a NFTL has been filed. The Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320 must be mailed within 5-business days after the NFTL is filed.

    1. The taxpayers 30-day period for requesting a hearing begins the day following the 5-business day period after the filing of the NFTL.

    2. The taxpayer must request a § 6320 CDP hearing no later than 30 days after the expiration of the 5 business days after the date the NFTL is filed. The NFTL is filed on the date it is received by the recording office.

    3. The Service uses an estimated filing date on the L3172 to provide the taxpayer with the date by which the § 6320 hearing request must be submitted. The estimated filing date is calculated by adding 3 business days to the NFTL mailing date.

    4. The taxpayer's response due date on the letter is determined by adding 5 business days plus 30 calendar days to the estimated filing date.

    5. See IRM 5.12.1.2.7, Manually Prepared CDP Notices.

    Example: A NFTL is mailed April 1, 2009. The CDP notice must be mailed by April 15, 2009. The taxpayer's response due date is May 13, 2009.

  2. The notice must be sent:

    1. certified mail within the contiguous states and territories.

    2. registered mail if the taxpayer resides outside the United States.

  3. CDP notices generated for liens filed out of the area will have the name and telephone number of the contact person for the originating area office.

  4. In rare instances, it may be necessary to hand carry a NFTL to the recording office. Revenue officers will use the ICS manual NFTL option.

  5. If the NFTL is prepared using ICS, and is hand carried to the recording office on a day other than Tuesday or Thursday, to ensure the CDP notice is issued timely, manually prepare and send the notice via certified mail to the taxpayer.

  6. If the NFTL is not prepared using ICS, obtain a Serial Lien Identification (SLID) number from the Automated Lien System (ALS) through the Centralized Lien Unit (CLU) and provide the information necessary to complete the lien document, before recording the lien. Following this procedure ensures that the CDP notice is generated and mailed timely.

    Example: During a meeting with the taxpayer he states that he is scheduled to file bankruptcy within the next few days. Based on IDRS research, it is determined that NFTLs have not been filed. The recording office is blocks from your meeting. A NFTL should be hand carried to the recording office.

  7. When a lien is filed in a different jurisdiction at a later date for a tax period that has previously received a right to a hearing, a L3171, Notice of Additional Federal Tax Lien Filing is issued.

    Note:

    The NFTL being requested must be a duplicate of a previously issued NFTL. For example, a NFTL was filed against Joseph Blacksburg, for tax periods 30 2005 and 30 2006, in Richmond, Virginia, November 11, 2007. Additional property was located in 2008 and a lien was filed against Mr. Blacksburg for tax periods 30 2005 and 30 2006 in Montgomery, AL. Mr. Blacksburg would receive a L3171.

  8. Enclose with each notice, the following publications and forms:

    1. Publication 594, The Collection Process,

    2. Publication 1450, Instructions on Requesting a Certificate of Release of Federal Tax Lien,

    3. Publication 1660, Collection Appeal Rights,

    4. Form 668(Y)(c), Notice of Federal Tax Lien, and

    5. Form 12153, Request for a Collection Due Process Hearing.

  9. Issue a CDP notice for the first NFTL filed after January 19, 1999, the effective date of section 6320, even if an NFTL was previously filed prior to the effective date.

5.12.1.2.6.1  (01-09-2009)
Issuing L3172 on Subsequent Assessments

  1. ALS currently generates L3171 when a NFTL has been filed on subsequent assessments. The taxpayer is entitled to a CDP hearing. ALS will not generate L3172 for the subsequent assessment NFTL. It must be manually prepared.

  2. Check ALS to determine if a NFTL has been filed for the same type of tax and tax period prior to preparing the NFTL.

  3. If the assessment dates are different, the requesting employee must prepare and issue the L3172 within established time frames.

  4. Manually prepare the NFTL to prevent creating the L3171.

  5. Forward the manually prepared NFTL to the CLU for processing. The CLU will add the NFTL to the billing support voucher and forward for recordation.

  6. Within 5 business days the L3172 must be mailed according to established procedures. See IRM 5.12.1.2.7 and 5.12.6.4 for additional procedures.

    Note:

    The CLU cannot generate the L3172 through ALS.

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

    Note:

    The receipted copy must be retained for 10 years after the end of the processing year.

  8. Provide copies of the CDP notice to the POA, partners, ex-spouse (only if a joint return was filed), etc., where appropriate and mail within established time frames.

5.12.1.2.7  (01-09-2009)
CDP Notices Can Be Prepared Manually

  1. The L3172 can be manually generated by ALS using the NOTADD option, if the NFTL is created using ALS. The notice must be sent to the last known address. If the original notice was not sent to the last known address at the time the NFTL was filed, a new notice is required. See IRM 5.12.1.2.18, Inputting Transaction Code 971 and Action Codes to indicate returned notice status.

  2. Input the correct address for notices being mailed to co-obligors (spouses or general partners) if the address on the NFTL is different than the address where the co-obligor is located. If you do not have access to ALS, secure E-mail the address to CLU. When mailing addresses are not available for the general partners' residence and the place of employment is not the partnership, revenue officers will attempt to provide the L3172 in person. Each general partner, spouse or ex-spouse listed on the NFTL is entitled to a hearing. Issue L3172 by certified mail within 5 business days as required by IRC 6320.

  3. If ALS is not used to generate the L3172, it is the responsibility of the employee making the lien filing determination to ensure that the CDP notice is issued and mailed timely.

  4. Document the attempt to deliver the notice in the case file.

  5. When requested, the CLU will fax copies of co-obligor liens to the appropriate employee for L3172 preparation and mailing.

  6. If the L3172 is prepared by the revenue officer when a new address is located in the case file or on master file (and the new address was effective prior to the issuance of the original NFTL and CDP notice, i.e., the original CDP notice was not sent to the last known address), the revenue officer will issue a substitute L3172. Be sure to:

    1. calculate the taxpayer's response due date as 30 days after the date on the L3172.

    2. print or type 'substitute' across the top.

    3. obtain a certified mail label (USPS Form 3800, Certified Mail Receipt) from the post office.

    4. enclose the appropriate publications and forms (See IRM 5.12.1.2.6.)

    5. document the case file and include the certified mail number and the date mailed.

    6. request input or input new TC 971 with appropriate AC to indicate issuance of substitute CDP notice. See IRM 5.12.1.2.18(5) for list of Action Codes.

    Note:

    For a limited liability company, if the NFTL contains the name of the LLC and the name of the owner of the LLC, but the CDP notice was not sent to the last known address of the liable taxpayer, follow these procedures to issue a substitute notice to the liable taxpayer.

  7. If the revenue officer elects to mail the L3172, when the taxpayer has not provided documentation to change the master file address, print or type 'duplicate'across the top of a copy of the originally mailed L3172..

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

    Note:

    The receipted copy must be retained for 10 years after the end of the processing year.

5.12.1.2.7.1  (01-09-2009)
Issuing a CDP Notice after Revocation of the Release

  1. Taxpayers are entitled to a CDP notice if a NFTL is filed after the revocation of a certificate of release of a tax lien and the erroneously released NFTL was filed before January 19, 1999, the effective date of IRC § 6320.

    Note:

    In cases where there is an erroneous release and the taxpayer received CDP appeal rights with the original lien filing, and a new NFTL is filed, the taxpayer is not entitled to new CDP appeal rights, nor is the taxpayer entitled to an equivalent hearing. The taxpayer should request an appeal through the Collection Appeals Program (CAP). Additional guidance on equivalent hearings is found in IRM 5.1.9.3.2.3.

    Example: A NFTL was filed against Hilda Temple on May 5, 1997. It was erroneously released June 1, 1998, however, there was a remaining balance due. A revocation was issued July 2, 1999. A new NFTL was filed against Ms. Temple on August 3, 1999. Ms. Temple is entitled to collection due process appeal rights because the IRS must provide taxpayers notification on all NFTL filings on or after 1/19/1999 under the IRC provisions.

  2. The Automated Lien System will not generate a L3172 for this lien filing. A L3171 will be generated systemically if the NFTL is requested through ALS.

  3. The employee requesting the lien filing is responsible for ensuring that the L3172 is prepared and mailed timely.

  4. Manually prepare the NFTL and L3172.

  5. Notices must be sent certified mail within the required 5-business day time frame.

  6. The certified mail label (PS Form 3800) must be retained. Refer to maintenance procedures in IRM 5.12.1.2.7 and 5.12.6.4.7.

  7. Provides copies of the CDP notice to the POA, partners, ex-spouse, etc., where appropriate and ensure established time frames are maintained.

5.12.1.2.8  (01-09-2009)
Corrected NFTL Generates New L3172

  1. The provisions of IRC 6320 requires that taxpayers be given one appeal per tax period per assessment.

  2. ALS generates a new L3172 when the taxpayer's name or tax period is corrected on the NFTL. The notice will have a new 30 day response date for the taxpayer.

    Note:

    ALS will not generate a duplicate L3172.

    Note:

    A new L3172 will not be generated on a NFTL once it has been recorded.

  3. The five business day certified mail rule applies.

5.12.1.2.9  (01-09-2009)
Issuing a Duplicate CDP Notice

  1. If you determine that a CDP notice may not have reached the taxpayer or was returned by USPS (the notice was mailed to the correct last known address), you may send a duplicate copy to the taxpayer at the current address.

    Note:

    If the notice was not sent to the last known address, issue a new notice. The taxpayer is entitled to a CDP hearing.

  2. Clearly mark the copy "Duplicate" .

  3. When the notice was mailed to the correct last known address, the taxpayer is not entitled to a CDP hearing. However, an equivalent hearing may be appropriate. See IRM 5.1.9.3.2.3, for additional equivalent hearing guidance.

5.12.1.2.10  (01-09-2009)
Providing the L3172 to the Taxpayer's Representative

  1. Employees responsible for making lien filing determinations are also responsible for ensuring that the taxpayer's representative receives a copy of the L3172. While there is no five business day certified mail requirement, a copy should be mailed as soon as possible. ACS and ICS systemically downloads this information to ALS. However, if NFTL is rejected the POA information is not loaded to ALS and a notice to the taxpayer's representative is not generated. The POA information must be resubmitted to ALS.

  2. If the mailing address is available when a NFTL is requested through ALS and the taxpayer's representative is identified, you may mail the notice personally or fax the name and address to the CLU. The notice will be generated by the ALS and printed and mailed at one of the print sites.

    Note:

    Make sure you include the taxpayer's name and TIN in your request.

  3. The copy of the L3172 will be mailed to the representative the same day as the taxpayer's, if possible, but in no instance shall it be mailed later than five days after the taxpayer's.

  4. When you notify the taxpayer's representative, provide a copy of the L3172 attached to Letter 3262. This letter informs the representative of the lien filing and explains that the L3172 was mailed to the taxpayer. The taxpayer is not entitled to additional CDP appeals rights if a hearing was not requested timely.

  5. When you notify the taxpayer's representative of an additional lien filing, attach Letter 3271. This letter explains that a NFTL has been filed in a different jurisdiction and that the taxpayer is not entitled to additional appeal rights because the appeal rights were provided with the original NFTL filing.

    Note:

    The taxpayer may request a CAP hearing with respect to the second NFTL filing.

5.12.1.2.10.1  (12-01-2006)
Use ICS Macro to Secure E-mail POA Information to Lien Units

  1. An ICS macro was developed that allows users to input POA information for copies of the CDP notice to be issued to POAs. This feature should be used ONLY when ICS CAF data is not available. See IRM 5.12.1.2.10.2.

  2. Use the following procedures to secure e-mail your POA information:

    Step Action
    1 Access Word Macros
    2 Select - "Main Menu" .
    3 Select - "Request to CCP to send 3172 to POA."
    4 Taxpayer SSN and Name will automatically populate, if you are in an ICS case
    5 Enter the POA name and address
    6 A question will appear - "A program is trying to access e-mail addresses stored in Outlook. Do you want to allow this?" Answer yes (TWICE)
    7 An e-mail will be generated with the appropriate CCP e-mail address automatically included in the "To" line. The text of the e-mail message will include the information entered through the macro process.
    8 Press send.

  3. Multiple requests may be made using this option. You must complete a request for each POA.

5.12.1.2.10.2  (01-09-2009)
ICS CAF POA Extract to ALS

  1. Revenue officers will continue to request NFTLs through ICS.

  2. ICS will systemically search the ICS CAF file to locate a taxpayer representative/power of attorney (POA) authorized to receive notices. The system will match at least one tax period on the NFTL with an authorized tax period on the CAF.

  3. A request to issue a CDP notice to the authorized POA will be sent to ALS at the time the NFTL is requested.

  4. Use procedures in 5.12.1.2.10.1 when a POA copy of the CDP notice is required and the POA information is not on the ICS CAF.

5.12.1.2.11  (01-09-2009)
Nominee and Alter-Ego Situations

  1. Persons identified as nominees or alter-egos are not entitled to a Collection Due Process hearing. CDP hearings are only available to delinquent taxpayers. Remember to send these lien requests to Collection Advisory for review. Advisory will forward the lien request to Counsel for approval.

    Note:

    Prior to requesting the POA notification, revenue officers must prepare the Form 668(Y)(c). Scan the document into a PDF file and secure e-mail it and any attachments to the CLU. If scanning is not an option, mail the NFTL and any attachments to the lien unit. CLU will complete the billing and issuance process.

  2. Send Letter 3177, Notice of Federal Tax Lien Filing - Nominee and Alter-Ego to individuals identified as nominees or alter egos, with a copy of the lien. Certified mailing is not required. See IRM 5.12.2.

  3. The person identified as the nominee or alter-ego may appeal under the Collection Appeals Program (CAP) process.

  4. The taxpayer (transferor) is entitled to CDP rights under IRC 6320.

    Example: John Smith owned property at 1111 Blackstone Park, Anywhere, MD. Mr. Smith has a tax liability. The collection information statement shows no assets. However, research shows he sold property to Jane Smith, his daughter, for a nominal amount. Mr. Smith uses the property as collateral for loans, pays the mortgage, maintains the property, makes repairs and improvements, etc. A NFTL is not filed. Follow-up actions show that Mr. Smith displays ownership. Even though the property is titled to Ms. Smith, Mr. Smith is the beneficial owner. Counsel recommends that a nominee lien be filed against Jane Smith as the nominee for John Smith.

  5. The taxpayer (transferor), in this situation, must receive the right to a hearing notice. In most instances the taxpayer would have received CDP rights (L3172) under IRC 6320 when a NFTL was filed in the taxpayer's name. Research ALS before issuing the notice.

  6. If necessary, issue L3886, Notice to Taxpayer of Nominee/Alter Ego Federal Tax Lien Filing and Your Rights to a Hearing Under IRC 6320, only if the taxpayer has not received appeal rights (issued L3172) for the identified tax periods.ALS will not generate L3886. Employees assigned the case must ensure the response due date is calculated and the notice is sent certified mail within the required five business day mailing period.

  7. Document the notice mailing in the case file history.

  8. Retain the date stamped receipted copy of the certified mail label. See IRM 5.12.6.4.7 for additional retention information.

    Note:

    Check with your recording official. Some recording offices allow the submission of Form 3982, Billing Support Voucher for Liens and Certificate Fees, for fee payment. The recording office will add the fee to the monthly invoice submitted to CLU for payment.

5.12.1.2.12  (01-09-2009)
IRC 6901 Transferee CDP Notification

  1. Before preparing a NFTL in transferee situations, review and follow procedures in IRM 5.12.2.6.8. Also follow any guidance provided by Counsel.

  2. If an assessment is made against a 6901 Transferee pursuant to IRC 6901 for the Transferor’s (original taxpayer's) liability, the Transferee becomes a taxpayer. The transferee at that time is entitled to Letter 3172 providing notice of their due process rights under section 6320.

  3. The taxpayer (transferor) will not receive a copy of the NFTL or notice of rights to a hearing.

  4. Routine lien filing guidelines for creating a lien should be followed and transferee selected. When the NFTL is printed the L3172 will be created.

  5. The notice is printed and sent certified mail from one of the Correspondence Production Services sites within the 5-business day time frame established by IRC 6320.

5.12.1.2.13  (01-09-2009)
Child Support Obligations

  1. 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.

  2. Accordingly, IRC 6320, Collection Due Process, does not apply to this type of liability. Do not issue a right to a hearing notice (L3172).

  3. The taxpayer does not have the right to request an appeal under the Collection Appeals Program.

  4. Issue Letter 3527, Notice of Federal Tax Lien Filing - Child Support Obligations, with a copy of the NFTL.

    Note:

    Do not include child support obligations on NFTLs with tax liabilities.

  5. There is no certified mail requirement for this letter.

  6. This notice will not be generated by ALS. Employees assigned the case must ensure that the response due date is calculated and that the notice is sent certified mail within the required 5-business day mailing period.

5.12.1.2.14  (01-09-2009)
Request for a CDP Hearing

  1. A taxpayer may request a CDP hearing if the taxpayer disagrees with the filing of a NFTL. Detailed CDP procedures are contained in IRM 5.1.9.3.

    Note:

    The applicable Appeals IRM is IRM 8.22.2.

  2. Requests for CDP hearings will be mailed directly or faxed (if contact has been made with the taxpayer by phone or in person and the taxpayer history file is documented with the date of contact and the case file is documented that the taxpayer wishes to send the letter by fax) to the revenue officer. Employees may attempt to resolve issues with the taxpayer, however, this does not extend the 30-day period. If the case is fully resolved to the taxpayer's satisfaction, there is no need to forward the request to Appeals. If you are 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 their discussions do not extend the 30-day period in which a hearing may be requested. IRM 5.1.9 allows 45 days to attempt to resolve the issue and an additional 45 days with GM concurrence.

    Note:

    If the case is fully resolved you must secure a written withdrawal of a timely CDP request. If a signed withdrawal is not secured the request must be sent to Appeals.

  3. Requests for CDP hearings related to fuel excise tax liens will be forwarded immediately to the employee assigned the case.

  4. Requests for appeals based on ACS lien filings will be mailed to the ACS Support Unit at the ACS site identified in the L3172.

  5. Prepare a case file for Appeals. It should contain:

    1. a copy of the L3172.

    2. a copy of the NFTL,

    3. a legible copy of the USPS Form 3877, certified mail listing,

    4. the original or fax copy of Form 12153, Request for Collection Due Process or Equivalent Hearing, and

    5. the envelope in which the request was mailed, if available.

    6. copies of any previously issued CDP notices with tax periods identified on the NFTL in the appeal request.

  6. 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.

  7. Refer to IRM 5.1.9.3.3.3, Preparing a Case for Transmittal to Appeals, for additional information.

5.12.1.2.15  (12-09-2003)
Documenting CDP Notification

  1. The Service is required by law to notify a spouse/ex-spouse (if a joint return was filed), or business partner listed on the NFTL of collection due process appeal rights.

  2. The Service established a policy to provide the taxpayer's representative or attorney with a copy of the appeal rights.

  3. Revenue officers will document case histories with spouse/ex-spouse, business partner and POA notification, e.g., 6/5/2000, requested ALS send CDP notice to POA and ex-spouse. Provided new address for ex-spouse.

  4. During the case review process, group managers will note in the case file whether revenue officers are documenting, where appropriate, that CDP notification has taken place in the above referenced situations.

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

5.12.1.2.16  (01-09-2009)
Rescinding the Collection Due Process Notice

  1. In instances where the Service has filed a NFTL in error, we are able to correct the situation by withdrawing the NFTL. With the implementation of IRC 6320, we have the added responsibility of ensuring that taxpayers are made aware of their rights to a CDP hearing and that those rights are protected when an error is made.

  2. Explain the error to the taxpayer. If the NFTL was filed in error and is withdrawn, the taxpayer's hearing rights are rescinded if a request for a hearing has not been received by Appeals. The taxpayer will receive hearing rights if the NFTL is subsequently filed.

  3. If the withdrawal is due to an Appeals determination, the taxpayer is not entitled to a hearing if the NFTL is later.

  4. Refer to IRM 5.1.9.3.2.5, CDP Hearing Requests in Response to CDP Notice Issued in Error, for detailed instructions.

5.12.1.2.17  (01-09-2009)
Processing Lien Collection Due Process Notices Returned by the USPS

  1. L3172s returned by the United States Postal Service (USPS) are mailed to the requesting employee at the post of duty address listed in ALS.

  2. The requesting employee or the person designated the responsibility of processing returned mail, will check IDRS for a last known address and take the following actions.

    1. Within 5 business days of receiving returned mail, determine if the address on the notice was correct at the time the NFTL was prepared and,

    2. request the input of TC 971 with the appropriate action code. See 5.12.1.2.18.

      Note:

      TC 971 AC 252 (indicating the notice was mailed) is not required on the module to post the remaining action codes in the AC 252-255 series.

  3. If the address was correct at the time the NFTL was requested, document the ICS history that the notice was returned even though it was mailed to the last known address.

  4. Retain the original notice and envelope in the case file. You may also include the notice status in ALS using the NOTADD option.

  5. If the address was incorrect at the time the NFTL was requested, input the correct address using the ALS NOTADD option.

  6. Document the ICS history with the date the new address was input to ALS.

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

5.12.1.2.18  (01-09-2009)
Inputting Transaction Code 971 and Action Code to Indicate the Notice Status

  1. Transaction code (TC) 971 with an action code (AC) will be input to IDRS. Each action code provides the mail status of lien collection due process notices without ALS research and are applicable only to L3172. Requesting employees will input or request input of TC 971 AC 252 within ten business days after requesting the NFTL.

    Note:

    TC 971 Action codes 253-255 may be input without TC 971 AC 252 (mailed) being present on the module.

  2. Employees requesting and/or manually preparing the NFTL and L3172 will be responsible for requesting the input of TC 971 AC 252.

  3. Within 5 business days of receipt of returned mail employees receiving or who are responsible for processing returned lien CDP notices will request the input of TC 971 AC 253-255 to each tax period listed on the NFTL.

  4. When an ex-spouse/spouse or general partner's notice is returned, input the TC 971 with the appropriate action code and also input the cross-reference SSN on the primary account.

    EXAMPLE: A NFTL was filed against John and Mary Black. John's notice was returned by USPS as undelivered on 7/15/2008. Mary received a separate notice and USPS returned it as refused on 08/04/2008. The account would appear as follows:

    TC DATE AMOUNT CYCLE DLN Variable Data
    971 07152008 .00 20082708 xxxxx-xxx-xxxxx-x ACT CD 253
    971 08042008 .00 20083008 xxxxx-xxx-xxxxx-x ACT CD 255 X-REF xxx-xx-xxxx

    The same process applies for general partners listed on the NFTL. Use the appropriate CFOL command to locate the general partner's SSN, if necessary.

  5. The following action codes are applicable only to lien collection due process notices.

    1. AC 252 - Mailed (NOTE: Add 10 business days to the NFTL print date to determine the input date to indicate the CDP mail date. For hand carried NFTLs, the date the CDP notice is mailed will be the AC 252 input date.)

    2. AC 253 - Undelivered, input using the mailroom or USPS date stamp, whichever is earlier.

    3. AC 254 - Unclaimed, input using the mailroom or USPS date stamp, whichever is earlier.

    4. AC 255 - Refused, input using the mailroom or USPS date stamp, whichever is earlier.

5.12.1.2.19  (01-09-2009)
Lien Filing During Levy Appeal

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

  2. Prior to filing the NFTL, contact the Appeals employee assigned the case and inform them that a NFTL will be filed.

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

  4. Attempt to notify the taxpayer of the lien filing determination.

  5. If the taxpayer has already received CDP rights for the tax periods involved, advise the taxpayer of CAP appeal rights if they dispute the lien filing. Advise the taxpayer that the IRS will issue a CDP notice of lien filing if this is the first NFTL to be filed for the tax periods involved.

5.12.1.2.20  (01-09-2009)
Levy During Lien Appeal

  1. Levy actions are not required to be suspended when the taxpayer requests a CDP hearing under IRC 6320, however, levy action is generally suspended pending the Appeals determination.

  2. Levy action can be taken if it is determined that collection is at risk.

  3. See IRM 5.1.9.3.5(5).

  4. Contact the Appeals employee assigned to the case prior to taking levy action to inform them that a levy will be made.

5.12.1.3  (01-09-2009)
Collection Appeals

  1. The Collection Appeals Program (CAP) was implemented to provide taxpayers with an opportunity to have collection actions reviewed by an impartial party outside the Collection function. CAP appealable collection actions are liens, levies, seizures, and installment agreement denials or terminations. In addition to appealing the filing of NFTLs, appealable lien actions include the denial of a notice of withdrawal of NFTL and denials of discharge, subordination or nonattachment. A CAP appeal is also allowed for taxpayers who want to dispute an administrative decision regarding liens. Refer to IRM 5.1.9.4, Appeals Program.

  2. CAP is the only appeal available before the lien filing. Taxpayers who dispute the proposed filing of the NFTL should be advised of appeal rights under CAP.

  3. Document this information in the case history.

  4. Provide the taxpayer with a copy of Publication 1660, Collection Appeal Rights, if an appeal is requested.

  5. Inform the taxpayer that your decision must be discussed with your immediate supervisor before beginning the Collection Appeals process.

5.12.1.4  (12-01-2006)
Taxpayer Advocate Service

  1. Taxpayers often contact the Taxpayer Advocate Service (TAS) when they are attempting to resolve collection issues.

  2. If the taxpayers asks to be referred to the Taxpayer Advocate Service (TAS), or the taxpayer meets TAS criteria and the taxpayer's issue cannot be resolved the "same day (within 24 hours)" , complete Form 911 or e-Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance order) and refer the taxpayer to Tax. See IRM 13.1.7 for more information.

  3. If you are able to resolve and close the TAS issue on the same day as the TAS contact, do not refer the inquiry to TAS.

  4. There will be times that although you cannot completely resolve the issue within 24 hours, if you have taken steps within 24 hours to resolve the taxpayer's issue, these cases also meet the definition of "same day." Do not refer these cases to TAS unless the taxpayer asks to be transferred to TAS.

    Note:

    Refer to IRM 13.1.7.4, Same Day Resolution by Operations.


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