8.22.5  Receipt, Control and Pre-Conference Considerations

Manual Transmittal

September 30, 2014

Purpose

(1) This transmits an editorial update to IRM 8.22.5, Collection Due Process, Receipt, Control and Pre-Conference Considerations.

Material Changes

(1) IRM 8.22.5 is updated to incorporate Appeals Interim Guidance AP-08-0214-0001, Interim Guidance on Appeals Discontinued Use of CDPTS.

(2) IRM 8.22.5.2.2.3, Feature Codes, table updated to include feature code Referral Investigation (RI) for cases with an ARI to Collection per Appeals Interim Guidance AP-08-0814-0008, Appeals Judicial Approach and Culture (AJAC) Feature Codes and Premature Referral Reason.

(3) Content regarding credits and overpayments on non-CDP tax periods in IRM 8.22.5.5, Exclusions from CDP Consideration, is moved to new IRM 8.22.8.23, Non-CDP Tax Periods.

(4) Revised to improve the content for plain language, active voice and organization.

Effect on Other Documents

IRM 8.22.5 dated November 8, 2013 is superseded.

Audience

Hearing officers, appeals account resolution specialists and appeals team managers

Effective Date

(09-30-2014)

John V. Cardone,
Director, Policy, Quality and Case Support

8.22.5.1  (03-29-2012)
Overview

  1. This section provides instructions to Appeals hearing officers from initial receipt of a CDP case to the conference. The first part covers initial CDP case review requirements and is set out in three subsections:

    1. Initial Review and Case Controls

    2. CDP Statute Verification, Controls and Documentation

    3. CDP Non-Statute Verification and Documentation

  2. The second part of this section provides instructions on pre-conference actions:

    1. Exclusions from CDP Consideration

    2. Pre-Conference Considerations

    3. Uniform Acknowledgement Letter

    4. Substantive Contact Letters

  3. The third part of this section contains procedures for Separate Timeliness Determination (CDPTD) cases.

8.22.5.2  (03-29-2012)
Initial Review and Case Controls

  1. This section provides initial case review instructions for:

    1. Premature referrals

    2. Case Summary Card issues

    3. Ensuring proper case type

    4. Case Activity Record (CAR) documentation requirements for initial case review

  2. Decisions in a timely CDP case are subject to review by the United States Tax Court. The Tax Court reviews the administrative record relied on by the Appeals employee making the required determinations under IRC 6330(c)(3). For this reason, it is critical to:

    1. Conduct a quality initial review of the file received from Collection

    2. Maintain proper case controls, and

    3. Properly document findings, communications and determinations made

  3. The following table summarizes verification and documentation requirements associated with the overall initial review of a CDP or equivalent hearing (EH) case. Refer to each IRM section listed for information on each requirement:

    Verification Item IRM Reference Review Document in CAR
    Initial CDP Case Review
    Case Type IRM 8.22.5.2.2.2 X  
    Tax Periods IRM 8.22.5.2.2.2 X  
    Feature Codes IRM 8.22.5.2.2.3 X  
    Case Summary Card Updates IRM 8.22.5.2.2.4 X  
    CDP Statute Verification, Controls and Documentation
    Timeliness - CDP IRM 8.22.5.3 thru IRM 8.22.5.3.2 X X
    Timeliness - EH IRM 8.22.5.3.1.2 & IRM 8.22.5.3.2 X X
    CSED Verification & Statute Controls IRM 8.22.5.3.2 X X
    CDP Non-Statute Verification and Documentation
    No Prior Involvement IRM 8.22.5.4.1 thru IRM 8.22.5.3.1.2 X X
    Legal & Administrative Procedures IRM 8.22.5.4.2 thru IRM 8.22.5.4.2.4 X  
    Assessment Verification IRM 8.22.5.4.2.1 thru IRM 8.22.5.4.2.1.3 X  
    CDP Notice IRM 8.22.5.4.2.4 X  
  4. The legal requirements for documenting verification of compliance with legal and administrative procedures, proper assessment of the tax and penalties, and proper issuance of the CDP notice are met by documenting such in the attachment to the Notice of Determination or Decision Letter. However, good case management practices may dictate documenting these items in the CAR as each are verified.

8.22.5.2.1  (10-01-2012)
eCase Overview

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

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

  3. eCase provides data such as:

    • Taxpayer name

    • Taxpayer Identification Number (TIN)

    • Master File Tax (MFT) code

    • Tax periods

    • Power of Attorney (POA) information, if available

    • Phone numbers, if available

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

    • Case Events: A chronological list of events of the case while in Collection

    • Information Items: ACS case narrative (see ACDS Utilities for ACS standard abbreviations and comments)

    • Account Alerts and phone numbers

    • Financial Summary

    • Asset/Liability: When available, this tab provides a list of assets, available credit, payments for certain expenses, federal and state withholding amounts

    • Transactions

    • Tax Modules (Integrated Data Retrieval System (IDRS) command code TXMODA)

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

    • ICS Account

    • Address/Contact Info

    • Taxpayer Agent

  6. ICS eCase does not provide:

    • ICS case history

    • IDRS command code TXMOD information

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

    • Resolution Reason Description (RRD) selected on the Form 5402, Appeals Transmittal and Case Memo

    • Hearing Type (DPLV/DPLN/DPL2 - see IRM 8.22.5.2.2.2, CDP Case Type)

    • Feature code(s)

    • Tax periods

    • Dates (e.g., Hearing Requested, Received in Appeals, Request created on ACDS, Closed)

    • Literal translation for the CDP Tracking code (e.g. Collection sustained, Collection alternative reached, Withdrawal, Premature Referral).

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

8.22.5.2.2  (09-30-2014)
Case Summary Card (CSC)

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

    1. Form 14461,Transmittal of CDP/Equivalent Hearing Request, for field Collection cases, or

    2. Form 12153-B, Referral Request for CDP Hearing from ACS Support, for ACS cases

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

    1. Taxpayer name

    2. Taxpayer Identification Number (TIN)

    3. Type of case

    4. Type of tax and periods

    5. Feature codes to identify unique and trackable aspects of the case

    6. Statute controls and dates

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

    • Form 12153, Request for a Collection Due Process or Equivalent Hearing

    • Form 14461, or Form 12153-B,

    • CDP lien or levy notice issued by Collection

      Note:

      ACS Letter LT11 is available on Control D through the ACS CDP Coordinator. ACS also enters the USPS received date on the CDP-Certified Mail Repository (CDP-CMR). See the Appeals CDP web page for links entitled ACS CDP Coordinators, for Control-D information, and Locating Certified Mailing Lists, which contains current instructions and contacts for requesting a copy of the CML.

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

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

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

8.22.5.2.2.1  (11-08-2013)
Linked and Separate Work Units (WUNOs)

  1. A case involving one taxpayer may require multiple work units on ACDS. The work units may be linked or separate. Linked work units have the same WUNO. Separate work units each have their own unique WUNO.

  2. Linked WUNOs are appropriate in the following instances:

    1. More than one MFT is part of the case, such as a business taxpayer with MFT 01 (Form 941, Employer's Quarterly Federal Tax Return), MFT 10 (Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return), and MFT 02 (Form 1120, U.S. Corporation Income Tax Return) liabilities

    2. Joint income tax liabilities (MFT 30) are owed and the husband is PRIMARY for some years and the wife is PRIMARY for other years

    3. Joint liability cases in which the spouses reside together but file separate Forms 12153

    Note:

    No correction is needed if separate WUNOs were created even though they could have been linked.

  3. Separate WUNOs are appropriate in the following instances:

    1. One taxpayer owes both Business Master File (BMF) and Individual Master File (IMF) taxes

    2. A BMF case has multiple but related entities with multiple Employer Identification Numbers (EINs)

    3. A case involving a husband and wife with a joint income tax liability (MFT 30) and one spouse also owes a separate income tax liability (MFT 30)

    4. Cases in which some periods are timely CDP and others are EH

    5. Separate CDP-OIC WUNO

    6. Separate CDP-liability WUNO when liability is being considered by an AO

    7. Separate CDP-IS WUNO

    Note:

    Linked WUNOs that should be separate must be corrected through APS. See IRM 8.22.5.2.2.4 below for instructions on making changes to the CSC.

  4. The following table contains examples:

    Description Linked WUNO Separate WUNO
    Taxpayer husband (TPH) and wife (TPW) jointly owe a Form 1040 MFT 30 liability for 2009 and TPH also owes a separate MFT 30 for 2005   X
    TPH and TPW owe a joint MFT 30 for 2009 and TPH also owes a separate Trust Fund Recovery Penalty MFT 55   X
    TPH and TPW owe joint MFT 30 for 2008 and 2009. The 2008 return was filed with TPH listed as the primary Social Security Number (SSN) and the 2009 return was filed with TPW listed as the primary SSN X  
    TPH and TPW owe joint MFT 30 for 2009. TPW submitted an innocent spouse claim for 2009. The Cincinnati Centralized Innocent Spouse Operations (CCISO) mirrors the joint 2009 into two MFT 31 assessments. Request APS establish two MFT 31 case cards with separate WUNOs per IRM 8.22.8.9.4, Mirrored Modules.   X
    Individual taxpayer owes MFT 30 and MFT 55. X  
    Individual taxpayer submits Form 12153 requesting CDP and EH for MFT 30 debts for years 2008 and 2009. The taxpayer is entitled to a CDP hearing for 2008 and an EH for 2009   X
    IRS issued two CDP notices on the same day as follows:
    • CDP levy notice for MFT 30 for years 2008 and 2009, and

    • CDP lien notice for MFT 30 debts for years 2007, 2008 and 2009

    The taxpayer submitted a timely hearing request for both a CDP levy hearing for years 2008 and 2009 and a CDP lien hearing for years 2007, 2008 and 2009.
      X
    Individual taxpayer owes MFT 30 and Form 941 MFT 01 tax as a sole proprietor   X
    Corporate taxpayer owes Form 941 MFT 01 and Form 1120 MFT 02 X  
    A group of three shareholders operate three related hospitals as separate corporations with separate Employer Identification Numbers (EINs)   X

8.22.5.2.2.2  (09-30-2014)
CDP Case Type

  1. CDP cases are assigned one of the following case TYPE codes:

    • DPLN for CDP lien

    • DPLV for CDP levy

    • DPL2 for combination CDP lien and levy

    • CDPTD for Separate Timeliness Determinations. See IRM 8.22.5.9, Separate Timeliness Determinations.

    Note:

    Revenue officers identify combination CDP lien and levy cases as "CDP Both" on the Form 14461 and the ACS identifies such cases as "DPBO" on the Form 12153-B.

  2. Combination CDP lien and levy cases present challenges when making sure ACDS accurately captures the correct case type and tax periods. The following table has information and examples explaining how to verify the accuracy of the TYPE code in combination cases:

    IF... AND... THEN...
    Taxpayer was issued both CDP lien and CDP levy notices Taxpayer checked both the "Filed Notice of Federal Tax Lien" and "Proposed Levy or Actual Levy" boxes on the Form 12153 Independently determine the timeliness of the hearing request for each CDP notice. See IRM 8.22.5.3.1 through IRM 8.22.5.3.1.5 below.
    The taxpayer simultaneously requested a CDP hearing for both lien and levy The hearing request is:
    • Timely - CDP lien

    • Timely - CDP levy

    Case TYPE = DPL2

    Note:

    While a single DPL2 WUNO is preferred, do not correct if APS established separate DPLN and DPLV WUNOs.

    The taxpayer requested and qualified for an EH hearing

    Note:

    See also IRM 8.22.5.3.1.2 below for information on the time frame for requesting an EH hearing.

    Hearing request is:
    • Timely - CDP lien

    • Untimely - CDP levy

    Requires two separate WUNOs:
    • Case TYPE for WUNO one = DPLN (timely)

    • Case TYPE for WUNO two = DPLV with ACDS feature code EH

    The taxpayer requested and qualified for an EH hearing for both lien and levy Hearing request is:
    • Untimely - CDP lien

    • Untimely - CDP levy

    Case TYPE = DPL2 with feature code EH

    Note:

    While a single DPL2 WUNO with feature code EH is preferred, do not correct if APS established separate DPLN and DPLV WUNOs each with feature code EH.

    Taxpayer checked both the "Filed Notice of Federal Tax Lien" and "Proposed Levy or Actual Levy" boxes on the Form 12153 Taxpayer was issued a CDP levy notice but not a CDP lien notice
    • Case TYPE = DPLV for the lone WUNO

    • Request for DPLN hearing is not valid because no CDP lien notice was issued

      Note:

      See IRM 8.22.5.2.4 and IRM 8.22.5.2.4.1 below for information on closing non-processable requests.

    Taxpayer checked the "Filed Notice of Federal Tax Lien" Taxpayer was issued a CDP levy notice Case TYPE = DPLV

    Note:

    Taxpayer is entitled to a CDP levy hearing even though the wrong box was checked on the Form 12153.

    The taxpayer
    • Did not request an EH (either verbal or written)

    • Either specifically stated he or she did not want an EH or was unresponsive during Collection's efforts to perfect the hearing request

    Hearing request is:
    • Untimely - CDP lien and/or untimely - CDP levy

    See IRM 8.22.5.2.4 below for instructions.
    The taxpayer lists multiple tax periods on the Form 12153 and the hearing request is timely for some and untimely for others The taxpayer:
    • Did not request an EH (either verbal or written)

    • Either specifically stated he or she did not want an EH or was unresponsive during Collection's efforts to perfect the hearing request

    See IRM 8.22.5.2.4 below for instructions.
  3. It is vital that ACDS reflect the correct case type and tax periods due to the limit of one hearing per type of tax and tax period.

8.22.5.2.2.3  (09-30-2014)
Feature Codes

  1. Feature codes identify cases with unique elements and assist in identifying trends, staffing and budget needs. CDP cases may have one or more feature code. The table below lists feature codes used in CDP and their description:

    Feature Code Description
    CO COIC investigated OIC
    • Added to both the CDP and related OIC WUNOs

    • Both WUNOs should also have 'DP' Feature Code

    DP Related WUNO
    • Used with related OIC, Interest Abatement (ABINT), or Innocent Spouse (IS) WUNOs

    • Both the CDP and related WUNO must have the Feature Code

    DR Disaster Relief
    • Case involves taxpayer who was/is in presidentially declared disaster area

    EH Equivalent Hearing
    • Taxpayer's request for a CDP hearing was not timely

    EI Earned Income Tax Credit (EITC) issue considered as part of CDP case.
    FV Frivolous or delaying argument raised
    ID Identity Theft indicator
    LI OIC based on doubt as to liability
    PY Rapid Response Appeals Process cases
    RI Referral Investigation
    RJ Retained Jurisdiction
    SD Spousal Defense
    • Innocent Spouse claim is under consideration as part of CDP case

    T1 Economic hardship Taxpayer Advocate Service (TAS) case
    T5 Systemic hardship TAS case
    TR Transferred in from another Appeals area

8.22.5.2.2.4  (09-30-2014)
CSC Changes

  1. Hearing officers may input CSC changes such as:

    • Taxpayer address and telephone number

    • POA name, address and telephone number

    • Most ACDS feature codes

    • Add or removed ACDS feature code "EH."

  2. Submit an ACDS Update Request Form to APS to request other necessary changes, such as:

    • Taxpayer name

    • SSN or EIN

    • MFT Code

    • Tax year or period

    • CDP case type (DPLV, DPLN, etc.)

  3. If a taxpayer states they only want the hearing to apply to a specific period(s), submit an ACDS Update Request Form to APS to:

    1. Remove the non-hearing periods from the WUNO

    2. Input IDRS Transaction Code (TC) 522 to reverse the TC 520 closing code (cc) 76/77 on non-hearing periods

8.22.5.2.3  (11-08-2013)
Imperfect Hearing Request

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

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

    1. Signature of the taxpayer or taxpayer's authorized representative

      Note:

      The hearing request is not processable if the Form 12153 is signed by someone not authorized to sign on behalf of the taxpayer, such as a spouse, unenrolled return preparer or an attorney, CPA or enrolled agent with no Form 2848.

    2. Taxpayer identification number, such as an Individual Taxpayer Identification Number (ITIN), SSN or EIN and it can't be located in the documents submitted with the CDP request, such as a Form 433-A, cover letter, Form 2848

    3. A statement that the taxpayer requests a hearing with Appeals (built into Form 12153)

    4. The reason(s) why the taxpayer disagrees with the collection action (may simply be a checked box on Form 12153)

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

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

    1. Taxpayer's name is missing from Form 12153, Block 1, but a copy of the CDP notice reflecting the taxpayer's name was attached

      Note:

      If the tax liability is jointly owed and the taxpayers did not list either name on Form 12153 but attached a copy of the CDP notice, consider the request to be a joint request if jointly signed.

    2. Taxpayer did not put mailing address on Form 12153, but it can be retrieved from IDRS

    3. Taxpayer did not list the tax or tax periods on Form 12153, but a copy of the CDP notice was attached

    4. Taxpayer identification number not listed on Form 12153, but is listed in a cover letter or can be identified through IRS internal databases

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

8.22.5.2.4  (09-30-2014)
Premature Referrals

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

    1. The hearing request is not processable (see IRM 8.22.5.2.4.1 below), or

    2. Collection issued the CDP notice erroneously (see IRM 8.22.5.4.2.4.2 below)

    3. The taxpayer withdraws the request for a CDP hearing (see IRM 8.22.5.2.5 below).

    Caution:

    Errors or omissions by Collection in preparing Form 14461 or 12153-B referral forms are not reasons to return a case as a premature referral.

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

    • Closing Code = 20

    • Instruct APS to input TC 522 instead of TC 521

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

  4. If the Uniform Acknowledgement Letter (UAL) was issued, notify the taxpayer why the case is being returned to Collection as a premature referral. This is an important customer service action because the UAL tells taxpayers to expect to hear from Appeals.

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

    1. The request for a hearing was not timely, or

    2. That one or some periods are timely and one or some periods are not timely in a case involving multiple periods.

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

    IF... AND... THEN...
    Collection forwarded a case to Appeals as a timely CDP case involving a single CDP notice Appeals determines the hearing request was not timely and the taxpayer did not request an EH Take the following steps to close out the DPLX WUNO:
    1. Request APS change the WUNO from CASE TYPE = DPLX to CASE TYPE = CDPTD

    2. Follow IRM 8.22.5.9.1 below for closing out a CDPTD determination using cc 14

    Collection issued separate CDP levy notices for 200909 and 200912 and forwarded the case to Appeals as a timely DPLV case for both periods Appeals determines the hearing request was timely for 200912 but not timely for 200909 and the taxpayer did not request an EH
    1. Request APS remove the 2000909 period and create a CDPTD WUNO for that period,

    2. Close the newly created CDPTD WUNO for the 200909 period using CC 14, and

    3. Proceed with the CDP hearing for 200912

    Collection forwarded a case to Appeals as a timely DPL2 case for period 2009 Appeals determines the hearing request was timely for CDP lien but not timely for CDP levy and the taxpayer did not request an EH
    1. Request APS change the DPL2 case to a DPLN and create a CDPTD WUNO for the untimely CDP levy

    2. Close the newly created CDPTD WUNO for the untimely CDP levy using CC 14, and

    3. Proceed with the CDP hearing for the timely DPLN case

    Example:

    On different dates, Collection issued a CDP levy notice for Form 941 liabilities for periods 6/30/2010 and 9/30/2010; and a CDP lien notice for Form 941 liabilities for periods 12/31/2010 and 3/31/2011. The taxpayer submitted a single Form 12153 requesting only a CDP hearing. The revenue officer determined the Form 12153 was submitted timely for both a CDP lien and CDP levy hearing. APS carded in a DPLV WUNO for 01/201006 and 01/201009, and a DPLN WUNO for 01/201012 and 01/201103. Appeals determined the hearing request was timely for a CDP lien hearing but was not timely for a CDP levy hearing. Submit a request to APS to have the DPLV WUNO changed to CDPTD WUNO. The CDPTD is closed out using cc 14 and proceed with the CDP lien hearing.

    Example:

    On different dates, Collection issued a CDP levy notice for Form 941 liabilities for periods 3/31/2009 and 6/30/2009, and a CDP lien notice for Form 941 liabilities for periods 3/31/2009 and 6/30/2009. The taxpayer submitted a single Form 12153 requesting only a CDP hearing. The revenue officer determined the Form 12153 was submitted timely for both a CDP lien and CDP levy hearing. APS carded the case in as a DPL2 WUNO for 01/200903 and 01/200906. Appeals determined the hearing request was timely for a CDP lien hearing but was not timely for a CDP levy hearing. Submit a request to APS to have the DPL2 WUNO changed to a DPLN and to have a CDPTD WUNO created for the CDP levy. The CDPTD is closed out using cc 14 and proceed with the CDP lien hearing.

8.22.5.2.4.1  (03-29-2012)
Non-Processable Hearing Request

  1. It is not Appeals' role to perfect an invalid hearing request. Cases with one or more of the following are not processable and must be returned to Collection as a premature referral:

    1. No CDP notice was issued

    2. A CDP notice was issued but it is the second such notice for the same period and assessment

    3. A CDP notice was issued but the taxpayer waived all rights to an Appeals hearing, including a CDP hearing, on Form 906, Closing Agreement on Final Determination Covering Specific Matters

    4. The taxpayer did not sign the hearing request

      Note:

      A Form 12153 is considered valid and processable if the taxpayer or the authorized representative signed correspondence attached to the Form 12153 but failed to sign the Form 12153 itself.

      Note:

      The regulations do not authorize a digital or electronic signature with a CDP hearing request. A digital or electronic signature is considered a signature-related flaw that Collection is responsible to correct with the taxpayer.

      Note:

      If only one spouse signed the CDP hearing request with respect to a joint liability, consider the hearing request valid for the requesting spouse but not for the non-requesting spouse.

    5. The hearing request was signed by a person not authorized to represent the taxpayer, including the taxpayer's non-liable spouse or other unauthorized representative

    6. The hearing request failed to list a reason for the dispute, which includes failure to check a box on Form 12153 and failure to list a reason in attached correspondence

      Note:

      Collection can orally secure the reason for the dispute from the taxpayer and document the reason in the case file PROVIDED the dispute is not frivolous. The taxpayer does not need to make a further written submission for non-frivolous issues.

      Description Request Processable?
      Taxpayer checked the "Installment Agreement" box on the Form 12153 but wrote nothing in the remarks and provided no further details. Yes
      Taxpayer checked the "Other" box but wrote nothing in "remarks" or in an attached letter. The revenue officer offered the taxpayer an opportunity to provide a reason for the dispute. The taxpayer called the revenue officer and stated the NFTL is causing financial problems and she would like to discuss payment options. Yes
      Taxpayer checked the "Other" box on Form 12153 but wrote nothing in "remarks" or in an attached letter. The revenue officer offered the taxpayer an opportunity to provide a reason for the dispute, but the taxpayer did not respond within the time frame given by the Revenue Officer. No, because the taxpayer did not list a reason for the dispute
    7. The hearing request does not have a valid SSN, ITIN, or EIN and a valid one can't be obtained from an internal IRS database

  2. If Collection received a timely but incomplete request for a CDP or EH hearing and the taxpayer perfected the request with Collection sufficient to make it processable, then the hearing request is considered timely filed and may not be returned as a premature referral. See Treas. Reg. 301.6320-1(c) and 301.6330-1(c).

    Example:

    Collection issued a CDP levy notice on September 15, 2013. Form 12153 was signed by the taxpayer's representative October 7, 2013 and mailed the same day. Collection determined there was no valid Form 2848 on file for the representative. Collection contacted the taxpayer and asked for a Form 2848 listing the representative as power of attorney. The taxpayer submitted a properly executed Form 2848 within the time period specified by Collection, so the hearing request is processable.

  3. The following cases are not premature referrals. Instead, work these as Separate Timeliness Determinations as per IRM 8.22.5.9:

    • Late filed CDP hearing request in which the taxpayer or authorized representative failed to request an EH

    • Late filed EH request

8.22.5.2.5  (09-30-2014)
CDP Withdrawals

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

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

    Note:

    EH requests may be verbally withdrawn.

  3. The most common reasons for withdrawal are the taxpayer:

    1. Resolves the issue with Collection

    2. Realizes he/she is unable to resolve the CDP issues with Appeals due to compliance issues or the statutory preclusion of liability.

      Note:

      A taxpayer may be eligible to have the case placed in CNC status despite compliance issues.

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

  5. The legal and administrative review is not required when a taxpayer withdraws a hearing request. Advise the taxpayer seeking withdrawal that he/she is giving up Appeals’ legal and administrative verification.

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

    • The taxpayer's only issue is a collection alternative that was granted by Collection

    • The CDP liability was full paid and the taxpayer isn't raising Innocent Spouse or Interest Abatement

    Allow the taxpayer 14 days from the date of Letter 4388 to withdraw.

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

  8. If you reach an agreed resolution, do not request a withdrawal. Instead, request Form 12257, Summary Notice of Determination, which protects the taxpayer's right to a retained jurisdiction hearing.

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

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

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

    1. Note the request in the CAR

    2. Request APS remove the withdrawn periods from the CSC, establish a new CSC for the withdrawn periods and assign the new case to you

    3. The new CSC has the same carding information but with a new WUNO

    4. Copy and paste the CAR entries from the original case to the new case

8.22.5.3  (03-29-2012)
CDP Statute Verifications, Controls and Documentation

  1. Within 5 work days of receipt of the case, you must review and document the following in the CAR:

    1. Whether the request for a hearing was timely

    2. The proper statute controls are on both IDRS and ACDS

    3. The statute controls contain the date of timely receipt of the CDP request by the office identified on the notice

  2. This section contains information and instructions for determining the timeliness of the CDP and/or EH requests and documentation requirements.

8.22.5.3.1  (03-29-2012)
Determining Timeliness - General Procedures

  1. A taxpayer's request for a CDP hearing must be in writing and requested within the prescribed time period. In general, the written request must be sent or hand-delivered to the IRS office and address as directed on the CDP notice. The following table reflects the requirements for various manners of delivery:

    Delivery Method How Hearing Request Must be Made
    Mail Timely mailed to the address of the IRS office listed in the CDP notice
    Fax Timely transmitted to the fax number listed in the CDP notice
    Hand-Delivery Timely received at the address of the IRS office listed in the CDP notice. See also IRM 8.22.5.3.1.3 for guidance on hand delivery to an IRS Taxpayer Assistance Center.
  2. Timely mailing is treated as timely filing/submitting as per IRC 7502 and IRC 7503.

    IF... AND... THEN...
    The due date for filing a timely hearing request is a Saturday, Sunday or legal holiday The postmark, meter date or fax transmission date is for the next business day after the Saturday, Sunday, or legal holiday It is timely
    The received date is after the due date for filing a timely hearing request Postmarked or metered timely, or if the fax transmission date is timely It is timely

    Example:

    The 30th day for a timely request falls on Sunday, August 7, 2013. The taxpayer faxes the request to the fax number listed in the CDP notice on Monday, August 8, 2013. The request is timely.

    Example:

    The taxpayer mails his CDP hearing request to the Atlanta campus, where he filed his tax return, not to the Philadelphia campus as directed in the CDP notice. Atlanta received the request on Wednesday, September 7, 2013. On September 8, 2013 an Atlanta campus employee faxed the request to Philadelphia, the correct CDP unit. The due date for requesting a CDP hearing was September 7, 2013. The request was not timely received.

  3. A postmark made by a non-U.S. Postal Service (USPS) system, such as a private postage meter stamp or a designated Private Delivery Service (PDS), requires both of the following to be considered timely:

    1. Legible postmark must be dated on or before the due date, and

    2. The appeal must be received by the required IRS office not later than the time that a letter sent by the same class of mail would ordinarily have been received if it were sent from the same point of origin via the USPS on the last day for timely mailing the appeal.

  4. The current designated PDS are:

    1. DHL Express (DHL)

    2. Federal Express (FedEx)

    3. United Parcel Service (UPS)

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

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

    If... Then...
    Postmark or mail meter date is not legible Ask the taxpayer when the request was mailed. If the taxpayer appears credible, use that date. If you can't reach the taxpayer or the taxpayer is not credible, subtract three days for regular mail and seven days for overseas mail from the IRS received date
    Fax transmission date is not legible Use the date the Service received the request unless the taxpayer otherwise provides proof of timely fax transmission
    There is no IRS received date Use the signature date
    There is no IRS received date or signature date Consider timely if received within 45 days of date required to be timely
  7. The CDP notice sent to the taxpayer is the controlling notice for determining timeliness. The letter transmitting the POA's copy of the CDP notice and the taxpayer's CDP notice should have the same issuance date. However, if the POA sends his/her copy of the CDP notice with the hearing request, verify that the POA's copy and the taxpayer's controlling copy have the same issuance date.

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

    1. Delivered the notice personally to the taxpayer;

    2. Left at the taxpayer's dwelling or usual place of business; or

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

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

8.22.5.3.1.1  (03-29-2012)
CDP Statute Suspension

  1. A timely and valid request for a CDP hearing suspends the statutory periods of time permitted for the following:

    1. IRC 6502, collection after assessment (CSED)

    2. IRC 6531, relating to criminal prosecutions

    3. IRC 6532, relating to suits

  2. The suspension period starts on the date the IRS receives the taxpayer's written request for a CDP hearing and continues until one of the following occurs:

    1. IRS receives a taxpayer's written withdrawal of the request for a CDP hearing,

    2. A Notice of Determination becomes final upon either the expiration of the time for seeking judicial review or upon exhaustion of any rights to appeals following judicial review, or

    3. A Form 12257, Summary Notice of Determination..., is secured and signed by both the taxpayer and the delegated Appeals official.

  3. In no event shall any of the periods of limitation expire before the 90th day after the day on which there is a final determination with respect to such hearing. See Treas. Reg. 301.6330-1(g).

  4. See also IRM 8.22.5.3.2 below for statute verification, control and documentation, including TC 520 requirements.

8.22.5.3.1.2  (03-29-2012)
Determining Timeliness - Equivalent Hearing (EH)

  1. Caution: Review the Determining Timeliness - General Procedures section in IRM 8.22.5.3.1 before reviewing this subsection on EH timeliness determinations.

  2. A taxpayer who fails to make a timely request for a CDP hearing is not entitled to a CDP hearing, but may request an administrative Appeals hearing, which is referred to as an EH. The EH is held by Appeals and generally follows Appeals procedures for a CDP hearing.

  3. A taxpayer must submit a written request for an EH within the one-year period beginning:

    1. Levy - The day after the date of the CDP levy notice

    2. Lien - The day after the end of the five-business-day period following the filing of the NFTL

      Note:

      The NFTL is considered to be filed as of the date the NFTL is received by the recording office

  4. Late-filed CDP hearing requests are not automatically classified as EH requests. The taxpayer requests an EH by:

    1. Checking the EH box on Form 12153,

    2. Otherwise indicating in writing that he/she wants an EH if the CDP hearing request is untimely, or

    3. Verbally confirming to Collection that he/she wants the untimely CDP hearing request to be treated as an EH when notified by Collection of the untimely CDP hearing request

  5. The taxpayer must affirmatively respond to Collection in order to be entitled to an EH.

    1. The affirmative response may be verbal

    2. The taxpayer need not submit an additional request form

    3. Collection documents the taxpayer's verbal request

    IRM 5.1.9.3.2.3Perfection of Hearing Requests, (field), and IRM 5.19.8.4.3.2, Perfection of Timely Equivalent Hearing Requests, (ACS) contain Collection's procedures .

  6. If the taxpayer disagrees with Appeals' decision that the request for a CDP hearing was not timely, the Substantive Contact Letter informs the taxpayer that he/she "may appeal to the appropriate court if you disagree with our decision that your hearing request was late."

  7. See IRM 8.22.5.2.4 for procedures if Collection forwarded an untimely request for a CDP hearing and the taxpayer did not request an EH.

8.22.5.3.1.3  (03-29-2012)
Determining Timeliness - Taxpayer Assistance Center (TAC) Receipts

  1. Treas. Regs. require timely written filing of a CDP hearing request with the office indicated on the CDP notice. However, IRC 6091 permits more flexibility with respect to hand-delivered hearing requests. If a taxpayer hand delivers the CDP hearing request to a local TAC, the request is timely if received no later than:

    1. 30 days from the date of the CDP levy notice, or

    2. The "must file by" date on Letter 3172, Notice of Federal Tax Lien Filing and your Right to a Hearing Under IRC 6320

  2. A TAC employee receiving a CDP hearing request via hand-delivery should date stamp and initial the hearing request, then mail or fax the request to the appropriate Collection office listed on the CDP notice.

  3. A hearing request mailed to a TAC office is not considered properly filed.

8.22.5.3.1.4  (03-29-2012)
Determining Timeliness - Levy

  1. Caution: Review the Determining Timeliness - General Procedures section in IRM 8.22.5.3.1 before reviewing this subsection on determining timeliness in CDP levy cases.

  2. The CDP levy hearing request must be postmarked or received within the 30 day period commencing the day after the date of the CDP levy notice. The beginning of the 30 day period is determined by:

    1. The date of the taxpayer's CDP levy notice, if attached to the Form 12153 or otherwise obtainable

    2. The date of IDRS Transaction Code (TC) 971 Action Code (AC) 069

    3. The entry from the Collection Due Process Certified Mail Repository (CDP-CMR)

      Note:

      See rules regarding metered mail in IRM 8.22.5.3.1 above.

      Note:

      ACS Letter LT11 is available on Control D through the ACS CDP Coordinator. ACS also enters the USPS received date on The CDP-CMR. See the Appeals CDP web page for links entitled ACS CDP Coordinators, for Control-D information, and Locating Certified Mailing Lists, which contains current instructions and contacts for requesting a copy of the CML.

  3. The following Action Codes (AC) associated with the TC 971 entry may show the result of issuing the CDP levy notice:

    IF... THEN...
    AC 066 The certified mail return receipt was signed (not necessarily by the taxpayer), so the notice was delivered. If the TC 971 AC 066 and the TC 971 AC 069 have the same date, the CDP levy notice was given in person.
    AC 067 Delivery was refused or the CDP levy notice was unclaimed. If the TC 971 AC 067 and the TC 971 AC 069 have the same date, the CDP levy notice was left at the taxpayer's home or business address.
    AC 068 The CDP levy notice was returned not delivered.
  4. Collection should only issue one CDP levy notice per tax period and there should only be one TC 971 AC 069 posted for that period.

    Exception:

    Collection must issue separate CDP notices to husband and wife when the tax period involves a joint liability. When separate notices are sent for a joint liability, the secondary taxpayer’s SSN is referenced on the second TC 971 AC 069 entry. This distinguishes the primary and secondary taxpayer’s CDP notices.

    Exception:

    For partnerships, Collection may issue separate notices to individual partners as well as the partnership entity.

  5. Collection inputs a TC 972 AC 069 to reverse a TC 971 AC 069 if the CDP levy notice was:

    1. Not issued (Collection decided not to mail the notice)

    2. Not issued to the last known address

    3. Rescinded because it was issued erroneously

  6. For ACS cases, the TC 971 AC 069 does not post to IDRS unless the notice is physically presented to the Post Office. The electronic response from the Post Office posts the 971 action code showing the delivery status and provides IRS with an electronic copy of the signature of the person who signed for the notice.

  7. Use the following table to determine timeliness when a second CDP levy notice is issued:

    IF... AND... THEN...
    More than one CDP levy notice was issued and a TC 972 AC 069 was not input for the first notice There is no record of the delivery of the first CDP levy notice Use the second CDP levy notice to determine timeliness (this is especially applicable when the taxpayer denies receiving the first CDP levy notice)
    More than one CDP levy notice is issued and a TC 972 AC 069 was not input for the first notice Delivery of the first CDP levy notice is verified Use the first CDP levy notice to determine timeliness
  8. IRS issues systemic levies through the Federal Payment Levy Program (FPLP). Sometimes the systemic FPLP levy is issued while the case is assigned to a revenue officer (RO). If this happens and the RO tells the taxpayer to mail the CDP hearing request to the RO, determine timeliness by the either the postmark date or the date received at the RO address even though the RO's address is not the address in the notice.

8.22.5.3.1.5  (11-08-2013)
Determining Timeliness - Lien

  1. Caution: Review the Determining Timeliness - General Procedures section in IRM 8.22.5.3.1 before reviewing this subsection on determining timeliness in CDP lien cases.

  2. Collection requests input of TC 971 AC 252 (indicating a notice was mailed) within ten business days of requesting the NFTL. Within 5 business days of receipt of returned mail, Collection requests input one of the following to each tax period listed on the NFTL:

    1. AC 253 = Undelivered

    2. AC 254 = Unclaimed

    3. AC 255 = Refused

  3. Collection scans the CDP lien notice and envelope, and attaches them as part of the ICS history. If scanning is not available, Collection retains the hard copy in the case file and documents ICS with the return mail status.

  4. If the return envelope is not available, Appeals relies on the above Action Codes and a copy of Letter 3172 available on ALS.

  5. The CDP lien hearing request must be postmarked or received on or before the "must file by" date in Letter 3172, Notice of Federal Tax Lien Filing and your Right to a Hearing Under IRC 6320.

  6. The date the NFTL is considered filed with the appropriate recording office is the date the NFTL is received by the recording office, not the date it was recorded. Because the Service does not obtain this date from the recording office, the Service uses an estimated filing date on the Letter 3172 to provide the taxpayer with a “must file by” date. The estimated filing date is calculated by adding 3 business days to the NFTL mailing date. The “must file” date is then determined by adding 5 business days plus 30 calendar days to the estimated filing date.

    Example:

    Must file by date = Estimated filing date (NFTL mailing date + 3 days) + 5 business days + 30 calendar days.

  7. If the taxpayer disagrees that their request was late, allow them to document that the actual date of receipt by the recording office was later than the estimated filing date. In such an instance, determine timeliness by adding 5 business days plus 30 calendar days to the actual date of receipt.

  8. If the taxpayer maintains the hearing request was late because Letter 3172 was sent to the wrong address, look at the taxpayer's copy, ALS or the returned mail to verify it was issued to the taxpayer's last known address.

8.22.5.3.1.5.1  (09-30-2014)
CDP Lien Hearing - NFTL Not Recorded

  1. If you discover an NFTL was filed by the IRS but not recorded by the recording office,, continue with the CDP hearing as Letter 3172 is valid.

  2. If Appeals held a CDP lien hearing and issued a Notice of Determination unaware the NFTL was not recorded, and IRS subsequently files an NFTL and issues a second Letter 3172, the taxpayer is not entitled to a CDP lien hearing based on the second Letter 3172.

8.22.5.3.1.5.2  (09-30-2014)
CDP Lien Hearing - Collection Withdraws NFTL

  1. If Collection withdraws an NFTL without rescinding Letter 3172, the taxpayer is entitled to request and receive a CDP lien hearing.

  2. .

  3. If Appeals conducts a CDP/EH lien hearing in this circumstance, the taxpayer is not entitled to a second CDP lien hearing if/when Collection files the NFTL again.

8.22.5.3.1.5.3  (09-30-2014)
CDP Lien Hearing - Revocation of Certificate of Release

  1. A taxpayer is entitled to a CDP lien hearing when an NFTL is filed after the revocation of a release of lien and they did not previously receive a Letter 3172 for the tax periods involved. Letter 3172 is issued for NFTLs filed after the effective date of IRC 6320 (January 19, 1999) even if an NFTL was previously filed prior to the effective date.

  2. Taxpayers who are not entitled to a CDP lien hearing or EH are still entitled to an appeal through the Collection Appeals Program (CAP).

8.22.5.3.2  (03-29-2012)
Documentation Requirements - CDP Statute Controls and Verifications

  1. You must verify and document the following in the CAR within 5 work days of receipt of the case:

    1. Whether the request for hearing was timely

    2. If timely, that the statute is suspended on IDRS with the correct date and closing code

    3. The statute on the case summary card is correct

    4. For EH cases only, the case summary card displays the earliest CSED

    Reminder:

    Instructions regarding the timeliness determination are found in IRM 8.22.5.3.1 through IRM 8.22.5.3.1.5 above.

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

    • 76 - CDP lien (Case Type = DPLN on ACDS) or combination CDP lien and levy (Case Type = DPL2 on ACDS) cases

    • 77 - CDP levy (Case Type = DPLV on ACDS) case

    Reminder:

    EH cases must not have a TC 520 on any of the tax periods since the CSED is not suspended.

  3. The following table reflects the TC 520 cc 76/77 date for various manners of delivery:

    IF the taxpayer... AND... THEN the TC 520 cc 76/77 date is...
    Mailed, faxed or hand-delivered the hearing request to the IRS office directed in the CDP notice The hearing request was received timely The date the hearing request was received
    Mailed the request to the IRS office directed in the CDP notice within the prescribed time period The hearing request was postmarked on or before the last date for submitting a timely hearing request but was received after such date The postmark date
    Mailed, faxed or hand-delivered the hearing request to an IRS office other than the one directed in the CDP notice The incorrect IRS office forwards the hearing request to the IRS office directed in the CDP notice and it is received timely by the correct IRS office The date the hearing request was received by the correct IRS office
    Mailed, faxed or hand-delivered the hearing request to an IRS office other than the one directed in the CDP notice The incorrect IRS office forwards the hearing request to the IRS office directed in the CDP notice and it is not received timely by the correct IRS office
    • The request for a hearing is not timely

    • TC 520 cc 76/77 is not appropriate

    • The taxpayer may request an EH from Collection

    Hand-delivered the hearing request to an IRS Taxpayer Assistance Center (TAC) rather than to the IRS office directed in the CDP notice The hearing request was received timely at the TAC The date the hearing request was received at the TAC
  4. In addition to TC 520 transaction codes, Appeals must also ensure the tax periods that are the subject of the CDP hearing contain the IDRS CSED suspension indicators. The suspension indicators for timely CDP cases are:

    • P - for the primary TIN only

    • S - for the secondary TIN only

    • B - for both TINs on a joint liability

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

    If you determine... Then verify... And document in the CAR...
    The CDP request was timely
    1. The TC 520 cc 76 or 77 was input to each tax period listed on the CDP notice (CSED is suspended),

    2. The TC 520 cc 76/77 is dated correctly,

    3. The IDRS CSED suspension indicator is correct

    1. The request for a CDP hearing was made timely,

    2. The CSED is suspended, and

    3. The TC 520 cc 76/77 was properly input with the correct date and CSED indicator

    The EH request was timely
    1. No TC 520 cc 76 or 77 was input to the tax periods listed on the CDP notice (CSED is not suspended), and

    2. ACDS reflects the proper 'CSED' statute code with the correct CSED date

    1. The request for an EH hearing was made timely, and

    2. The CSED is not suspended

    3. ACDS reflects the proper CSED date

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

    • Erroneous TC 520 entry (TC 520 input in case involving an untimely CDP hearing request)

    • Wrong TC 520 date

    • Wrong TC 520 closing code (76, 77)

    • Wrong CSED suspension indicator (P, S or B)

    Step Action
    1 Prepare ACDS Update Request Form found on APGolf under Category 'ACDS Updates'
    2 Complete the form with the information needed to correct the TC 520 and/or CSED suspension indicator
    3 When correcting a TC 520 cc 76/77 date, advise APS to input:
    1. A TC 522 cc 76/77 to reverse the erroneous TC 520

    2. A new TC 520 with the correct date and/or closing code along with instructions to delay posting code of one cycle for the correct TC 520 cc 76/77

      Caution:

      The TC 522 cc 76/77 reverses both the erroneous TC 520 and corrected TC 520 if both are input on the same day. Be sure to specifically ask APS to first input the TC 522 and then input the correct TC 520 with a posting delay of one cycle.

    4 Send an encrypted email with the ACDS Update Request Form attached to the APS unit that services your team. Find the email address on Outlook by searching: *AP-TS-APS-[East, West, or Campus] - [your APS local office] ACDS Update Request

8.22.5.4  (03-29-2012)
CDP Non-Statute Verification and Documentation

  1. In addition to statute verification and documentation, you must also address the following as part of making a determination in a CDP hearing:

    Verification Requirement IRC Reference
    The hearing must be "conducted by an officer or employee who has had no prior involvement with respect to the unpaid tax" IRC 6320(b)(3) and IRC 6330(b)(3)
    That "the requirements of any applicable law or administrative procedure have been met" IRC 6330(c)(1)
  2. This section contains information and instructions for determining, verifying and documenting these legal requirements.

8.22.5.4.1  (03-29-2012)
No Prior Involvement

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

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

    Exception:

    CDP cases filed in the jurisdiction of the Court of Appeals for the Tenth Circuit have a different definition for no prior involvement. See IRM 8.22.5.4.1.1 for separate requirements for cases filed in Colorado, Kansas, New Mexico, Oklahoma, Utah or Wyoming.

  3. Prior involvement applies to EH cases. An EH is a "non-CDP matter" . If you previously conducted an EH with a taxpayer for the same tax and period at issue in a CDP hearing, you've had prior involvement and may not conduct the CDP hearing.

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

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

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

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

    Scenario Prior Involvement?
    Taxpayer timely requests a CDP levy hearing for a 2008 income tax liability. You previously conducted a CDP hearing regarding an NFTL filed with respect to the taxpayer's 2008 liability. No. Your only prior involvement with the taxpayer's 2008 income tax liability was in connection with a prior CDP hearing.
    Taxpayer timely requests a CDP levy hearing for a 2006 income tax liability. You previously conducted an EH regarding an NFTL filed with respect to 2006. Yes. Your participation in the EH for the same tax and tax period is non-CDP prior involvement.
    Taxpayer timely requests a CDP levy hearing for a 2007 income tax liability. You conducted a Collection Appeals Program (CAP) hearing regarding an NFTL filed for 2008. No. You did not have prior involvement because the prior CAP hearing did not involve the 2007 income tax liability at issue in the CDP hearing.
    Taxpayer timely requests a CDP levy hearing for a 2008 income tax liability. You previously conducted a CAP hearing regarding an NFTL filed for 2008. Yes. Your prior involvement with the taxpayer's 2008 liability was in connection with a non-CDP hearing.
    You are assigned a CDP levy hearing for a 2008 income tax liability. You were previously a revenue officer assigned to collect taxpayer's 2008 liability. Yes. You previously worked with the taxpayer as a revenue officer trying to collect the same tax and period.
    You are assigned a CDP levy hearing for a 2006 income tax liability. You previously served as a mediator in a Fast Track Mediation matter involving the taxpayer's 2006 liability. Yes. You had prior involvement with the tax and period at issue.
  8. If the hearing officer at the office closest to an individual taxpayer's residence, place of employment or school, or a business taxpayer's principal place of business had prior involvement, the taxpayer is not offered a face-to-face conference at that Appeals location unless the taxpayer waives the "no prior involvement" requirement. The taxpayer is offered a face-to-face conference at another Appeals office if the taxpayer otherwise qualifies for a face-to-face hearing. See Treas. Reg. 301.6330-1(d)(2).

  9. As long as there is no prior involvement, a taxpayer does not have a right to a hearing with a hearing officer other than the one assigned. If requested by the taxpayer, a case transfer may be considered per IRM 8.6.1.2, Transfer of Cases in Appeals.

8.22.5.4.1.1  (03-29-2012)
10th Circuit Exception

  1. In Cox v. Commissioner 514 F.3d 1119 (10th Cir. 2008), the Tenth Circuit Court of Appeals ruled that prior involvement exists where the hearing officer considered the tax and tax periods that are the subject of the current CDP case as part of a prior CDP case involving collection of other tax periods.

    Example:

    A hearing officer conducted a CDP hearing involving taxpayer's income tax for 2008. As part of that hearing, the taxpayer proposed an IA. The hearing officer declined the IA due to a delinquent 2009 return. The taxpayer subsequently filed his delinquent return but did not pay the balance due. The taxpayer then receives a CDP levy notice with respect to 2009 and submits a timely request for CDP hearing. The hearing officer is considered by the 10th Circuit to have had prior involvement with the 2009 tax year because he considered the delinquent 2009 return as part of the previous CDP

  2. The Office of Chief Counsel disagrees with the Cox decision, so in cases where appeal lies outside of the jurisdiction of the Court of Appeals for the 10th Circuit, Appeals will not follow this decision. However, under the Golsen rule, Appeals must follow the Cox decision in cases that can't be meaningfully distinguished and the appeal lies in the 10th Circuit.

  3. The 10th Circuit exception applies if the taxpayer resides or has a business or principal office in one of the following states:

    • Colorado

    • Kansas

    • New Mexico

    • Oklahoma

    • Utah

    • Wyoming

    • Plus those portions of Yellowstone National Park extending into Montana and Idaho

  4. Use the taxpayer's residence (individual) or principal place of business (e.g., for a corporation or partnership) at the time of the hearing request to analyze which prior involvement rule applies. The venue for appeals of a Tax Court decision is based on the taxpayer's location as of the date the petition is filed. If the taxpayer's address changes during the hearing, reassess the matter.

8.22.5.4.1.2  (11-08-2013)
Documenting No Prior Involvement

  1. ACDS prompts each hearing officer working on a CDP case for the impartiality statement as the first entry after CR-RA, CR-TR or CR-NR. The CAR entry is either NP (no prior involvement) or PI (prior involvement).

8.22.5.4.2  (03-29-2012)
Legal and Administrative (L & A) Procedure Review

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

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

    • Disregarded hearing where the taxpayer is raising only frivolous issues

    • Premature referrals

    • Withdrawals

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

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

    Requirement Description
    Collection's Administrative Procedures All applicable procedures in IRM Part 5 and the Treasury Regulations relating to the filing of the NFTL or the issuance of the notice of intent to levy were followed.
    Valid Assessment A valid assessment was made for each tax and period on the CDP notice.
    Notice and Demand Notice of tax due and demand for payment (notice and demand) was issued to the taxpayer’s last known address.
    Balance Due There was a balance due when the CDP levy notice was issued or when the NFTL was requested.
    CDP Notice Properly Issued If a taxpayer disputes the timeliness determination, verify a CDP lien or levy notice was properly issued to the taxpayer
    • Notice of Intent to Levy: IRC 6330(a)(1) and IRC 6331(d)(1) (except for jeopardy levies)

    • Notice of Federal Tax Lien: IRC 6320(a)(1)

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

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

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

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

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

    1. The taxpayer’s full name

    2. The old address

    3. Taxpayer's SSN, ITIN or EIN

    4. Joint return filers should provide both names, SSNs and signatures

    Note:

    Clear and concise written notification must be specific as to a change of address. Thus, a new address in the letterhead of taxpayer correspondence does not by itself serve to change a taxpayer’s address of record.

8.22.5.4.2.1  (03-29-2012)
Valid Assessment - Self-Filed Return

  1. Where assessment of the tax is based on a self-filed return, it is sufficient to rely on the TC 150 on IDRS command code TXMOD to confirm the validity of the assessment.

8.22.5.4.2.1.1  (11-08-2013)
Valid Assessment - Statutory Notice of Deficiency (SNOD)

  1. For assessments that require issuance of a SNOD, the validity of the assessment is confirmed by verifying the SNOD was properly issued. Properly issued means the SNOD was issued:

    1. By certified or registered mail to the taxpayer's last known address, and

    2. Prior to the assessment of the deficiency

  2. Appeals may generally rely on IDRS command code TXMOD transcripts showing the SNOD assessment was made to verify that the assessment was properly made. Examine TXMOD transcripts and identify the TC 290 and TC 300 assessments. The TC 494 Notice of Deficiency may confirm the SNOD was issued.

  3. A consent to assessment is verified by examining TXMOD. Look for a TC 300 with a disposal code of:

    • 03 = agreement reached before issuance of the 30 day letter

    • 04 = agreement reached after issuance of 30 day letter

    • 09 = agreement reached after issuance of a SNOD

  4. Always ask the taxpayer if they received the SNOD and document their response.

  5. The taxpayer has alleged an irregularity when they:

    • Deny or can't recall receipt of the SNOD

    • Deny signing an extension of the assessment statute and transcripts show an extension

    • Deny signing a consent to assessment and transcripts show a signed consent

  6. If the taxpayer alleges an irregularity, you cannot rely solely on TXMOD. You need to review:

    • A copy of the SNOD, and

    • Postal Service Form 3877, or equivalent IRS certified mail list (CML) bearing a USPS date stamp or the initials of a postal employee (see below for CML instructions)

  7. If the tax return(s) for the subject tax year(s) are not in the CDP file, request them using IDRS command code ESTAB.

    1. Request a special search if the file is not received in 21 days

    2. Promptly return the original returns after photocopying them

    3. If the returns are too large to copy, flag them for APS to return after closing the case

  8. SNODs issued by Automated Underreporter (AUR) after 08/01/09 are maintained in Control-D and are identified with a TC 922 with an IDRS assignment number that ends in "5601." The AUR contacts at http://appeals.web.irs.gov/APS/AUR-C-D_contacts.htm provide Appeals with Control-D copies of the SNODs issued by AUR.

  9. If the SNOD can't be located, the CML can establish the SNOD was issued prior to the assessment. Determine the originator to locate the CML:

    • For a local examination, the Certified Mailing List (CML) is retained by the local office mail room. Contact the local office that issued the SNOD to determine the contact point to obtain the CML.

    • ASFR and AUR units in the campus retain a copy of the CML for three years. See the link entitled Locating Certified Mailing Lists on the Appeals CDP web page for instructions and contacts for requesting a copy of the CML.

  10. When an irregularity is discovered regarding the SNOD, see the decision table below:

    IF... THEN...
    The taxpayer signed a waiver Form 870, Waiver of Restrictions on Assessment & Collection of Deficiency in Tax & Acceptance of Overassessment, or Form 4549, Income Tax Examination Changes SNOD verification is not necessary unless the taxpayer denies signing the waiver
    The IRS did not mail a SNOD to the taxpayer's last known address The assessment is invalid and must be abated unless the taxpayer received the notice in time to petition Tax Court
    No SNOD was issued The assessment is invalid and must be abated
    The liability was incorrectly assessed under the math error procedures The assessment is invalid and must be abated
    The SNOD can't be located Use CML to establish the SNOD was issued prior to assessment
    Neither the SNOD nor the CML can be located and no other proof of mailing can be found Consult with Area Counsel

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