5.12.6  Appeals Processes Involving Liens

Manual Transmittal

October 14, 2013


(1) This transmits the revised IRM 5.12.6, Federal Tax Liens, Appeals Processes Involving Liens.


A revision of the IRM 5.12 chapter has been done to consolidate and coordinate like topics, reduce duplication of content, and provide an overview, cross-references, and contacts.

Material Changes

(1) As part of the reorganization of IRM 5.12, this section is now titled "Appeals Processes Involving Liens. "

(2) The contents of this IRM section were taken from IRM 5.12.1 and 5.12.6 and Interim Guidance memorandums that were issued. Some former sections were deleted, merged or incorporated to remove duplicative information.

(3) The following table provides a cross walk of sections moving to IRM 5.12.6 and the nature of the changes involved.

New IRM Number Old IRM Number(s) Material Change n/a New section citing IRM purpose No material changes Revised to clarify terminology, updated IRM reference and incorporated IRM No material changes Updated to elaborate on allowable communications with Appeals Clarified retained jurisdiction Restructured for clarity Added section on Consolidated Groups Revised to clarify CDP issuance process Restructured for definition of subsequent assessment and terminology change Changed terminology and refined procedure. Clarified when CDP rights are applicable Incorporated IRM Added note to define terminology and clarify CDP rights Merged prior IRM, Creating Notices for the Power of Attorney (POA)/Taxpayer Representative and Co-obligors No material change No material change Updated to clarify that only Collection Appeal Program (CAP) rights are available to the nominee or alter-ego. No material change No material change Revised to require contact with Appeals when a withdrawal of the CDP hearing request is secured after the case was sent to Appeals. It also addresses required contact with Appeals when the NFTL is being withdrawn on an ongoing Appeals case No material change Revised to show that an invalid CDP notice can be rescinded and a correct substitute CDP notice issued. Valid CDP notices can only be rescinded during the time period for filing a hearing request and only if there was no CDP hearing request Incorporated the instructions contained in Interim Guidance Memorandum SBSE-05–0213-017 and merged prior IRM, Returned CDP Notices. Changed the transaction code input time frame to fourteen (14) days of receipt of returned lien CDP notices and merged prior IRM, Transaction Code 971 Posting for Receipt and Delivery of CDP Notices Revised to clarify information regarding filing a NFTL during the appeal. Clarified when Collection Appeals Process (CAP) may be used.   New section which lists exclusions to CAP for NFTL issues.   New section that elaborates on CAP procedures.   New section which outlines procedures for disagreeing with the CAP decision.   New section on the CAP process

(4) The following table provides sections OF IRM 5.12.6 where the content is being deleted.

Content being deleted as not applicable, outdated, or duplicative for the IRM's audience
Exhibit 5.12.6-2
Exhibit 5.12.6-3

(5) Editorial changes were made throughout the IRM sections, terminology was updated for form and systemic changes.

Effect on Other Documents

This material supersedes IRM 5.12.1 dated January 9, 2009; IRM 5.12.2 dated March 8, 2012; IRM 5.12.3 dated June 1, 2010' IRM 5.12.6 dated July 16, 2010; and Interim Guidance Memorandum SBSE 05–0213-017, Returned Lien Collection Due Process Notices, dated February 28, 2013.


SBSE and W&I Collection, Centralized Lien Operation, and Appeals

Effective Date


Michelle C. Alvarado
Acting Director, Collection Policy
Small Business/Self Employed Division  (10-14-2013)

  1. The purpose of this IRM is to convey instructions for identifying, preparing, and issuing lien notices being appealed.  (10-14-2013)
Appealing the Notice of Federal Tax Lien (NFTL)

  1. Taxpayers may have two ways to appeal certain collection actions to the IRS Office of Appeals:

    • Collection Due Process or Equivalent Hearing; and

    • Collection Appeals Program (CAP).

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

  3. Taxpayers may also contact the Taxpayer Advocate Service (TAS) for assistance. See IRM 5.12.1 and IRM  (10-14-2013)
Collection Due Process (CDP) and Collection Due Process (CDP) Notices

  1. Under IRC § 6320, the Internal Revenue Service must notify taxpayers in writing of their right to a CDP hearing with the Office of Appeals the first time a tax period is included on a NFTL. The written notification must be given within five (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.


    For purposes of IRC § 6320 and this IRM, a "tax period" is the statutory assessment lien on a tax module. If a tax module contains multiple statutory assessment liens (e.g. TC 290, 300, 240, etc.), a CDP notice must be provided the first time any of them are shown on the NFTL.

  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, Equivalent Hearing and Timeliness of Equivalent Hearing Request.

  3. The taxpayer cannot obtain judicial review of a decision from an equivalent hearing (EH) unless the issue raised in the hearing provides for judicial review, i.e., taxpayer raises spousal defense issues under IRC § 6015 or interest abatement issues under IRC § 6404.

  4. The CDP notice (Letter 3172, Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320) must be sent to the taxpayer within five (5) business days after the NFTL is filed with the local recording office. The notice must be:

    • given in person;

    • left at the taxpayer's residence or usual place of business; or

    • sent by certified or registered mail to the taxpayer's last known address.

  5. The notice will include:

    • the amount of unpaid tax;

    • the right to request a hearing during a 30 day period (beginning after the five day period described in (4) above);

    • administrative appeals available to the taxpayer with respect to the NFTL and procedures relating to such appeals (e.g., meet with the employee's supervisor, Collection Appeals Program, etc.); and

    • the provisions of IRC § 6320 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).  (10-14-2013)
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, Appeal Process, for additional information on this issue.  (10-14-2013)
Requirement of Investigation

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

  2. You may be asked to clarify certain issues. Appeals or the originating function may ask questions or provide information that involve ministerial, administrative, or procedural matters.

  3. Care must be taken to refrain from prohibited ex parte communications. Ex parte is a term used in legal proceedings to describe a one-sided point of view received on behalf of or from one side or party only. In this context ex parte communications are communications which take place between appeals employees and other Internal Revenue Service employees, including revenue officers (ROs), without giving the taxpayers/representatives an opportunity to participate in the communications. See IRM, Communications with Appeals, and Rev. Proc. 2012-18 for additional information.  (10-14-2013)
Judicial Review of Determination

  1. The taxpayer has 30 days under IRC § 6320 from the date of the notice of determination by the Appeals Officer to file a petition appealing the determination with the U. S. Tax Court.

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

    • collection actions taken or proposed with respect to the Appeal determination; and

    • 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, Jurisdiction Retained by Appeals, for additional information.  (10-14-2013)
Suspension of Collection Period of Limitations

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

    • 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; or

    • if appealed to the Tax Court, when the decision of the Tax Court case becomes final.

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

  3. For more information see IRM and Treasury Reg. §301.6320-1(g).  (10-14-2013)
When is the CDP Notice (L3172) Issued

  1. The CDP notice, L3172, Notice of Federal Tax Lien Filing and Your Rights to a Hearing Under IRC § 6320, is issued when the original NFTL is filed and when an additional NFTL is filed after a subsequent assessment is made, including assessments of additional penalties but not on accruals of penalties. See IRM, Issuing L3172 on Additional Assessment. Do not issue a CDP notice when an NFTL is filed in an additional jurisdiction if the taxpayer has already been issued a CDP notice for the tax and tax periods listed in the NFTL.

  2. CDP notices are issued for the different entity types.

    1. Individual taxpayers


      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.

    2. Co-obligors, which include:
      •Spouses living at the same address
      •Spouses living at different addresses

    3. Partnerships (See IRM for procedures to create CDP notices for general partners.)

    4. Limited liability companies (LLC)


      For assessments of employment taxes in the name and Employer Identification Number (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. Refer to guidance on determining the liable taxpayer for an LLC 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.

    5. Corporations

    6. Consolidated groups.


      A consolidated group is an affiliated group of corporations connected through stock ownership in a parent-subsidiary relationship as defined in IRC § 1504. The affiliated group may elect to file a consolidated income tax return. In such situations the common parent and all the subsidiaries must be listed on the NFTL. The name of the common parent & all the subsidiaries must also be listed on the CDP notice. The notice should not be mailed to the subsidiaries, as the common parent is the only entity with the right to participate in a CDP hearing on behalf of subsidiary members of the consolidated group. If you have difficulty determining who should be listed on the NFTL, contact Advisory or Area Counsel for assistance.

  3. 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 for the same tax periods and includes additional assessments, the Automated Lien System (ALS) will generate a L3172. The taxpayer is only entitled to a hearing for the assessments 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.


    A NFTL was issued for John and Nancy Smith for tax periods 30-200612, 30-200712, and 30-200812 on July 15, 2010 in Washington County, IA. A CDP notice listing all periods was mailed to both taxpayers. A second NFTL is filed on May 20, 2012 in Marshall County, IA, for tax periods 30-200612, 30-200712, 30-200812, 30-200912, and 30-201012. 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 30-200912 and 30-201012, because the other periods were covered in the first notice.


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

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

  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 on ALS 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.  (10-14-2013)
Issuing the CDP Notice

  1. The Service is required to notify taxpayers after a NFTL has been filed. The L3172 must be mailed within five business days after the NFTL is filed.

    1. The taxpayer must request a IRC § 6320 CDP hearing no later than 30 days after the expiration of the five (5) business days after the date the NFTL is filed. For purposes of this calculation, the NFTL is considered filed on the date it should be received by the recording office.

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

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

    4. See IRM, Preparation and Delivery of Manual CDP Notices.


    A NFTL is mailed April 1, 2009. The CDP notice must be mailed by April 13, 2009 (i.e. April 1 plus three (3) business days plus five (5) business days). The taxpayer's response due date is May 13, 2009 (i.e. 30 days later).

  2. The principal means of delivering CDP notices is by mail. The notice must be sent:

    • certified mail; or

    • registered mail, if the taxpayer resides outside the United States.

  3. CDP notices generated for NFTLs 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. Whenever a NFTL is manually prepared and filed, the CDP notice should also be manually prepared and issued.

  5. If the NFTL is not prepared using ICS, obtain a Serial Lien Identification (SLID) number from the Automated Lien System (ALS) through Centralized Lien Operation (CLO) and provide the information necessary to complete the lien document, before filing the NFTL. If the NFTL is processed and filed through CLO, the CDP notices will also be generated and mailed systemically.


    During a meeting with the taxpayer, he states that he is scheduled to file bankruptcy within the next few days. Based on Integrated Data Retrieval System (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.

  6. When an additional NFTL is filed in a different jurisdiction at a later date for a tax period that has previously received a right to a hearing, a Letter 3171, Notice of Additional Federal Tax Lien Filing, is issued.


    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 30-200912 and 30-201012, in Richmond, Virginia, November 11, 2011. Additional property was located in 2012 and a NFTL was filed against Mr. Blacksburg for tax periods 30-200912 and 30-201012 in Montgomery, AL. Mr. Blacksburg would receive a L3171.

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

    • Publication 594, The IRS Collection Process,

    • Publication 1450, Instructions on How to Request a Certificate of Release of Federal Tax Lien,

    • Publication 1660, Collection Appeal Rights,

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

    • Form 12153, Request for a Collection Due Process or Equivalent Hearing.  (10-14-2013)
Issuing L3172 on Additional Assessment

  1. IRC § 6320 provides a due process hearing right when a statutory lien’s existence for unpaid tax is reflected on an NFTL for the first time. One module may, over time, have more than one assessment (e.g. an additional audit assessment or certain penalty assessments). A CDP notice must be issued for any additional assessment that was not included on a previous NFTL.

  2. When a NFTL is created on ALS, it will recognize if the assessment was included on a prior NFTL. If a new NFTL contains assessments that were not on previous NFTLs, ALS will systemically generate a CDP notice for that new NFTL. Check ALS to determine if a NFTL has been filed for the same type of tax and tax period prior to preparing the NFTL.


    Any tax assessment will include the associated failure to file or pay penalties. An additional CDP notice is not required for new assessments of interest and penalty accruals that were included on a CDP notice.  (10-14-2013)
Preparation and Delivery of Manual CDP Notices

  1. The CDP notice can be manually generated by using the Integrated Collection System (ICS) template. The notice must be sent to the last known address.

  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 CLO. When mailing addresses are not available for the general partners' residences and the place of employment is not the partnership, revenue officers will attempt to provide the L3172 during face to face contact with the co-obligor(s). Each general partner, spouse or ex-spouse listed on the NFTL is entitled to a hearing. Issue L3172 by certified mail within five (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 NFTL 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. 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. Take the following actions:

    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. 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 for list of Action Codes.


    For a limited liability company, if the CDP notice was not sent to the last known address of the liable taxpayer, follow the procedures noted above to issue a substitute notice to the liable taxpayer. See IRM, Limited Liability Company (LLC).

  6. 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.

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


    The receipted copy must be retained for 10 years after the end of the processing year.  (10-14-2013)
Issuing a CDP Notice after Revocation of the Release

  1. Taxpayers are entitled to a CDP notice when a NFTL is filed after the revocation of a certificate of release of a tax lien, if they did not previously receive a CDP notice for the tax periods involved.


    A CDP notice is issued for the first NFTL filed after January 19, 1999, the effective date of IRC § 6320, even if an NFTL was previously filed prior to the effective date.

  2. In cases where there is an erroneous release and the taxpayer received CDP appeal rights with the original NFTL filing, and a new NFTL is filed, the taxpayer is not entitled to a new CDP notice. The taxpayer should request an appeal through the Collection Appeals Program (CAP). Additional guidance on equivalent hearings is found in IRM

  3. The employee requesting the NFTL filing is responsible for ensuring that the L3172 is prepared and mailed timely.  (10-14-2013)
Amended NFTL and New CDP Notice

  1. IRC § 6320 requires that taxpayers be provided one appeal opportunity per tax period, per assessment.

  2. A new CDP notice (L3172) is required when the tax period is corrected. A new 30 day response due date is required.


    The taxpayer's name is misspelled (e.g., Jane Smith and the correct spelling is Smyth) and the tax period on the NFTL is in error (e.g., 2010 but the correct tax period is 2011). The taxpayer is entitled to a hearing for each tax period. The incorrect spelling of the taxpayer's name should also be corrected. A correction of the name only will not create a new CDP notice. A L3171 will be created.


    A CDP Notice will not generate for changes to the MFT, TIN or name control.

  3. ALS will generate the appropriate CDP notice. The notice will be printed and mailed from the Correspondence Production Services (CPS).

  4. Amended NFTL requests may be forwarded to CLO for input to ALS or users may use the ALS "Amend" option. See IRM 5.12.7

  5. If an NFTL is amended manually, the CDP notice must be mailed within five business days of the NFTL filing.

  6. The requesting employee will send the new CDP Notice (L3172) by certified mail or registered mail (foreign addresses) to the taxpayer's last known address not more than five (5) business days after delivery of the NFTL to the recorder's office (i.e., the deemed filing date).

  7. The new CDP notice (L3172) may, alternatively, be delivered to the taxpayer in person or left at his home or usual place of business (which includes his place of employment).  (10-14-2013)
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.


    If the CDP notice was not sent to the last known address, issue a substitute (new) notice. The taxpayer is entitled to an extension to request 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 an extension of time to request a CDP hearing. However, an equivalent hearing may be appropriate. See IRM, for additional equivalent hearing guidance.


    ALS will not generate a L3172 for a duplicate NFTL. A duplicate NFTL is defined as an exact match to a NFTL currently found on ALS. If a second L3172 is issued for the same periods, the issuance of the notice does not give additional CDP rights to the taxpayer for periods previously afforded CDP hearing appeal rights.  (10-14-2013)
Providing the L3172 to the Taxpayer's Authorized Representative/Power of Attorney (POA)

  1. Employees responsible for making NFTL filing determinations are also responsible for ensuring that the taxpayer's authorized representative/POA receives a copy of the L3172. While there is no five business day certified mail requirement for the taxpayer's authorized representative/POA, a copy should be mailed as soon as possible.

  2. Automated Collection System (ACS) and ICS systemically download this information to ALS. However, if a NFTL is rejected the POA information is not loaded to ALS and a notice to the taxpayer's authorized representative is not generated. The POA information must be resubmitted to ALS.

  3. If the mailing address is available when a NFTL is requested through ALS and the taxpayer's authorized representative is identified, you may mail the notice personally or secure E-mail the name and address to CLO. See IRM for procedures. The notice will be generated by the ALS and printed and mailed at CPS.


    Make sure you include the taxpayer's name, TIN and tax periods in your request. Document the ICS case history with the date representative information was provided to CLO.

  4. 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.

  5. When you notify the taxpayer's authorized representative/POA, provide a copy of the L3172 attached to Letter 3262, POA Notice of Lien Filing, and all enclosures (Publications 594, 1450, 1660, Form 668(Y)(c), Form 12153). The L3262 informs the representative of the NFTL filing and explains that the L3172 was mailed to the taxpayer. The taxpayer is not entitled to additional CDP appeals rights based on the issuance of the POA notification .

  6. When you notify the taxpayer's authorized representative/POA of an additional NFTL 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.


    The taxpayer may request a CAP hearing with respect to the second NFTL filing.  (10-14-2013)
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 Centralized Authorization File (CAF) data is not available. See IRM

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

    Step Action
    1 Access ICS Templates Listing
    2 Select - "Miscellaneous/Publications" .
    3 Select - "Request to send 3172 to Power of Attorney."
    4 Taxpayer SSN and Name will automatically populate, if you are in an ICS case
    5 Enter the POA name and address
    6 An E-mail will be generated with the appropriate Centralized Case Processing (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.
    7 Press send.

  3. Multiple requests may be made using this option. You must complete a request for each POA.  (10-14-2013)
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/POA authorized to receive notices. If the system matches at least one tax period on the NFTL with an authorized tax period on the Centralized Authorization File (CAF), the POA should be noticed of the NFTL filing.

  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 when a POA copy of the CDP notice is required and the POA information is not on the ICS CAF. Revenue officers should ensure that ICS is updated with POA information not found on the CAF system.  (10-14-2013)
Nominee and Alter-Ego Situations

  1. The person identified as the nominee or alter-ego on a special condition NFTL may appeal the filing under the Collection Appeals Program (CAP) process. Persons identified as nominees or alter-egos are not entitled to a Collection Due Process hearing. See Q-B5 in Treasury Regulation 301.6320-1(b)(2).

  2. The statutory lien attaches to all property the taxpayer has a right, title, or interest in even if that property is held in the name of another party. Only the taxpayer against whom the assessment is made and against whom the statutory lien has arisen is entitled to a CDP hearing. See Q-A1 in Treasury Regulation 301.6320–1(a)(2).


    Refer to IRM for additional information.

  3. Letter 3177, Notice of Federal Tax Lien Filing - Nominee and Alter-Ego, must be manually prepared and sent to individuals identified as nominees or alter egos, with a copy of the lien notice. Certified mailing is not required. See IRM 5.12.7 and Q-A7 in Treasury Regulations 301.6320-1(a)(2).

  4. The taxpayer in this situation (not the nominee or alter ego) is entitled to CDP rights under IRC § 6320 only if they have not previously been issued a IRC § 6320 notice for the assessments shown on the special condition NFTL. See Q-A1 in Treasury Regulation 301.6320–1(a)(2).

  5. Per IRM 5.12.7, the taxpayer should have already received CDP rights (L3172) under IRC § 6320 because an NFTL is to be filed in the taxpayer's name before, or at the same time, the special condition NFTL is filed. Research ALS to confirm the situation.

  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 been issued notice of appeal rights (issued L3172) for the identified tax periods. ALS will not generate L3886. Employees assigned the case must prepare the L3886 and 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 (when issuance of CDP rights is applicable).  (10-14-2013)
IRC § 6901 Transferee CDP Notification

  1. If an assessment is made against a Transferee pursuant to IRC § 6901 for the Transferor’s (original taxpayer's) liability, the Transferee becomes a taxpayer. The Transferee when a notice of lien is filed is then entitled to Letter 3172 providing notice of their due process rights under IRC § 6320.

  2. Before preparing a NFTL in transferee situations, review and follow procedures in IRM 5.12.7. Also follow any guidance provided by Counsel.

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

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

  5. The CDP notice is printed and sent certified mail from one of the Correspondence Production Services sites within the five (5) business day time frame established by IRC § 6320.  (10-14-2013)
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.


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

  5. This notice will not be generated by ALS. Employees assigned the case must prepare L3527 and ensure that the notice is sent within the required five business day mailing period.

  6. There is no certified mail requirement for this letter.  (10-14-2013)
Sending the CDP Hearing request to Appeals

  1. Requests for CDP hearings will be mailed directly, hand delivered or faxed to the revenue officer.


    CDP hearing requests can be received via fax, if contact has been made with the taxpayer by phone or in person. The taxpayer history must be documented with the date of contact and the case file is documented that the taxpayer wishes to send the request by fax.

  2. Employees may attempt to resolve issues with the taxpayer, however, this does not extend the 30 day period.


    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.

  3. IRM 5.1.9 allows 45 days to attempt to resolve the issue and an additional 45 days with GM concurrence.

  4. If the taxpayer requested a hearing, but the case is fully resolved the request must nevertheless be forwarded to Appeals unless the taxpayer submits a written withdrawal of the CDP hearing request. You may request a written withdrawal on Form 12156. If the withdrawal is received after the hearing request was sent to Appeals, notify Appeals and forward the withdrawal, Form 12256, Withdrawal of Request for Collection Due Process or Equivalent Hearing under Section 6320 and or 6330 to Appeals for closure actions. Refer to IRM, Processing Withdrawal of Request for CDP Hearing. If a signed withdrawal is not secured the request must be sent to Appeals. When resolution is reached, explain to the taxpayer the option to withdraw the request for a CDP hearing. Refer to IRM, Controlling and Monitoring Cases While in Appeals. If the resolution reached is to withdraw the NFTL for an ongoing CDP lien hearing case, notify Appeals of the proposed action. Refer to IRM, Communication with Appeals for guidance regarding permitted ex parte communications with Appeals.

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

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

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

    • Form 3210;

    • Form 12153–A, Referral Request for CDP Hearing and Request for Collection Due Process Inventory Tracking System (CDPTS) Input;

    • a copy of the L3172;

    • Collection Information Statement (CIS) or financial statement;

    • other correspondence from the taxpayer or POA;

    • the original or fax copy of Form 12153, Request for Collection Due Process or Equivalent Hearing;

    • the envelope in which the request was mailed, if available;

    • copy of Form 2848, Power of Attorney and Declaration of Representative, unless it is present on IDRS; and

    • any pertinent documentation/information in the case file.

  8. 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.

  9. Refer to IRM, Preparing a Case for Transmittal to Appeals, for more detailed information.


    Narrative statements to Appeals must be limited to a neutral list of documents and neutral statements regarding actions taken and documented in the case history. The manager must ensure this requirement is met and that no prohibited ex parte communications are included before approving the transmittal of the case to Appeals. Refer to IRM, Communications with Appeals.

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

  11. Fast Track Mediation (FTM) is available to taxpayers that qualify for a CDP or EH. 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. Refer to IRM, CDP and Equivalent Hearing Fast Track Mediation for the criteria for FTM.  (10-14-2013)
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., 6/6/2011, 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 NFTL filing, the revenue officer requesting the NFTL filing must process the request even if the case has been closed.  (10-14-2013)
Invalid CDP Notices and Rescinding the Collection Due Process Notice

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

  2. A valid CDP lien notice may be rescinded only if:

    • within the time period for requesting a CDP hearing the Service agrees either to withdraw the NFTL or release the federal tax lien;


      The Notice of NFTL Withdrawal or Certificate of Release of the lien need not be filed within the time period for requesting a hearing.

    • the rescission is accomplished before the expiration of the time period for requesting a hearing; and

    • the taxpayer has not requested a CDP hearing.


    The CDP lien notice is valid and the taxpayer is entitled to a hearing if requested even though the NFTL is ineffective, for example, because a recording office never receives the NFTL or because the NFTL was filed in violation of the bankruptcy automatic stay. Refer to IRM

  3. Once the time period for requesting a CDP hearing has expired after the issuance of a valid CDP notice, the taxpayer has been afforded an opportunity for a hearing, and the notice may not be rescinded.

  4. A NFTL filed in violation of the bankruptcy automatic stay must be withdrawn. Although the NFTL is ineffective, the CDP lien notice is valid. See IRM Nevertheless, if the time period for requesting a CDP lien hearing has not yet expired and the taxpayer has not requested a hearing, you may rescind the CDP lien notice. See IRM

  5. A NFTL should be withdrawn if filed when a taxpayer is in a combat zone, outside the United States away from his or her permanent duty station participating in a contingency operation, or hospitalized for an injury received while serving in the combat zone or contingency operation. Even if the NFTL is withdrawn, the CDP lien notice is still valid. See IRM If the time period for requesting a hearing is still open (e.g., the taxpayer is still in the combat zone, participating in a contingency operation or hospitalized for an injury received while serving in the combat zone or contingency operation or the taxpayer has returned but the 180 or 30-day period remains open) and the taxpayer has not requested a hearing, you may rescind the CDP lien notice. For the purpose of calculating the 30 day period for requesting a CDP hearing, IRC § 7508 disregards the time spent in a combat zone or contingency operation away from the taxpayer's permanent duty station, plus any related hospitalization, plus 180 days. If the taxpayer has requested a hearing, the Service cannot rescind the CDP notice but the Service shall delay the CDP hearing in accordance with IRC § 7508.  (10-14-2013)
Processing Lien Collection Due Process Notices Returned by the USPS

  1. L3172's returned by the United States Postal Service (USPS) are mailed to the requesting employee at the post of duty address listed in ALS or to the office designated by the function for address verification.

  2. Within fourteen (14) calendar days from the date the requesting employee or the person designated the responsibility of processing returned mail, receives the returned notice in the appropriate office, the following actions must be taken:

    1. Research the returned undeliverable CDP notice on IDRS to determine if a more current address is available.

    2. Research ALS Notadd feature, to see other addresses where the notice was mailed (If authorized access to ALS).

    3. Request re-issuance of the notice, as required.

    4. Input the applicable TC 971 action code.


    CDP notices returned as unclaimed or refused do not require research. CDP notices returned as unclaimed or refused require the input of the appropriate TC 971 AC 254 -255. Refer to IRM, Inputting Transaction Code 971 and Action Code to Indicate the Notice Status.

  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 to ensure a substitute (new) L3172 is created. If ALS access is not available, send a secure E-mail to Centralized Lien Operation (CLO) to update ALS. The request must reference the:

    • NFTL serial number (SLID);

    • certified mail number associated with the notice; and

    • current address for the taxpayer and co-obligor, if applicable.

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

  7. If the address is the address of record at the time the lien filing was prepared, but the address was updated on IDRS within two cycles after that time, a courtesy copy of the notice may be, but is not required to be sent to the taxpayer’s current address.

  8. 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. Follow the procedures in IRM for inputting the appropriate transaction and action codes.  (10-14-2013)
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 10 business days after manually preparing and issuing the NFTL and CDP notice.


    ALS systemically posts the TC 971 AC 252 indicator on IDRS to reflect the issuance of the taxpayer's CDP notice. Expect to see the TC 971 AC 252 post on IDRS 10 days after the NFTL is printed in CLO for mailing to the recording office. If the TC 971 AC 252 does not post, contact the Field Office Resource Team (FORT) to ensure that either systemically or manually, the TC 971 AC 252 posts.


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

  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 fourteen (14) calendar 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.


    A NFTL was filed against John and Mary Black. John's notice was returned by USPS as undelivered on 7/15/2011. Mary received a separate notice and USPS returned it as refused on 08/04/2011. The account would appear as follows:

    971 07152011 .00 20112808 xxxxx-xxx-xxxxx-x ACT CD 253
    971 08042011 .00 20113108 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: 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 mail room or USPS date stamp, whichever is earlier.

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

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

  6. Field Collection employees will input the applicable TC 971 AC 253 - 255 to IDRS to reflect the status of the returned CDP notice. This can be accomplished by following standard IDRS input procedures or by using ALS Notadd feature. When ALS is used, the TC will systemically upload to IDRS. See ALS User Guide for instructions on Notadd.

  7. If ALS access is not available, send a request to CLO to update ALS with the delivery results. The request must include:

    • NFTL serial number (SLID);

    • certified mail number associated with the notice; and

    • notice delivery results, i.e., undelivered, unclaimed, or refused.

  8. Employees who manually prepare the NFTL and L3172 will be responsible for requesting the input of the CDP notice delivery results (TC 971 AC 253 -255).  (10-14-2013)
Lien Filing During Levy Appeal

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

  2. Prior to filing the NFTL, the collection group manager (GM) should contact the Appeals Team Manager (ATM) preferably by secure E-mail of the hearing officer assigned the case and inform them that a NFTL will be filed. Refer to IRM, Communication with Appeals.

  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 lien CDP rights for the tax periods involved, advise the taxpayer of CAP appeal rights if they dispute the NFTL 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.  (10-14-2013)
Collection Appeals Program

  1. The Collection Appeals Program (CAP) was implemented to provide taxpayers, or third parties 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, modifications or terminations. In addition, CAP can be used to appeal other lien actions which include, the denial of a notice of withdrawal of NFTL and denials of discharge, subordination or nonattachment. Refer to IRM 5.12.9, Federal Tax Lien, Withdrawal of Notice of Federal Tax Lien; IRM 5.12.10, Federal Tax Liens, Lien Related Certificates; and IRM, Collection Appeals Program (CAP), for additional details.


    A determination to deny an application for a withdrawal, discharge, subordination or nonattachment may be communicated to the applicant in writing or verbally. Denials communicated verbally should be followed up with written notification. In either instance, an explanation of the right to appeal must be provided to the applicant. Pub 1660, Collection Appeal Rights, may be used for this purpose.

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

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

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

  5. Document this information in the case history.  (10-14-2013)
Exclusions from CAP

  1. Several collections issues have separate appeal procedures in place. When a taxpayer requests an appeal under CAP in error, advise the taxpayer of the correct appeal procedures. Refer to IRM, Exclusions from CAP.

  2. CAP cannot be used to appeal the following:

    • NFTL filing determinations made by Appeals employees in CDP resolutions;

    • Collection’s decision not to “release” a lien;

    • Actions under the control of a court;

    • Issues not within the scope of Internal Revenue laws; or

    • IRC § 6326 administrative appeal.  (10-14-2013)
Request for a CAP Appeal

  1. If the taxpayer or third party requests a CAP appeal, the taxpayer or third party must first discuss the case with the Collection manager.

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

  3. If agreement is not reached at the manager conference, advise the taxpayer or third party 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.

    1. If the taxpayer intends to submit a Form 9423, the taxpayer needs to let the manager or RO know within two business days of the conference with the manager, or collection action may resume (except for appeals related to Installment Agreements).

    2. If the taxpayer mails the Form 9423, it must be postmarked within three business days after the date of the conference with the Collection manager to avoid collection action.  (10-14-2013)
Sending the CAP request to Appeals

  1. The information needed for a CAP appeal will be either secure e-mailed or faxed to the Appeals Office. Cases should be secure e-mailed or faxed to the correct Appeals office location using the Appeals web site CAP Case Routing link.

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

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

    1. Form 9423 and any taxpayer correspondence which accompanied the CAP request.

    2. Copies of the relevant lien documents.

    3. Form 433A or Form 433B.

    4. Any other relevant documents, such as copies of deeds, mortgages, counsel opinions, copies of appropriate financial documentation, and/or taxpayer correspondence.

    5. In the fax transmittal or E-mail, include your name, E-mail address, telephone number, and fax number, include the taxpayer’s name and telephone number, and, if applicable, the POA’s name and telephone number. Also, indicate the date of the group manager conference.

    6. Any narrative statement included on the fax transmittal or e-mail must be limited to a neutral list of documents and neutral statements regarding actions taken and documented in the case history without any further discussion regarding the strengths and weaknesses of the taxpayer’s appeal. The manager must ensure this requirement is met and that no prohibited ex parte communications are included before approving the transmittal of the case to Appeals. Refer to IRM, Communications with Appeals.


      Communications between Appeals and other IRS employees are strictly limited to administrative and ministerial matters and the merits of the case cannot be discussed.  (10-14-2013)
CAP Process

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

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

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

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

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

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