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Collection Due Process (CDP) FAQs

Q. I just got a Notice Number CP504. It says – “Urgent!! They intend to levy Certain Assets.” I don’t agree that I owe this amount. How can I appeal? Will that stop the levy action?

A. The IRS cannot levy with just this notice. The IRS must first issue a formal Notice of Intent to Levy, which is the next step after this notice. Call the number on the notice to discuss this situation and your payment options.

Your case is closed as far as any determination about how much you owe, so there is nothing for you to appeal at this point. However, you do have three options to have your case re-opened so the IRS can consider whether you owe any additional amounts:

  • Pay the amount due in full and file a claim for refund. If the IRS disallows your claim, you will have the right to appeal at that time.
  • Follow the instructions in Publication 3598 and request an Audit Reconsideration. Note that you must submit new information the IRS did not previously consider in order to have an audit reconsideration.
  • Follow the instructions in Form 656-B and file an Offer in Compromise, Doubt as to Liability. Read the instructions in this booklet to determine if you are eligible for this option, and if it is the best one for you.

Q. The IRS Collection function says they are going to file a lien or levy my assets. What can I do?

A. Contact the Collection function to discuss your situation and your payment options. Refer to Publication 1660, Collection Appeal Rights to review your appeal rights. Some Collection actions qualify for appeal under the Collection Appeals Program (CAP) and some qualify under the Collection Due Process (CDP) appeal. These two programs offer different advantages depending on the facts of your case, and participation in one type of hearing could preclude certain issues from also being considered in a second hearing. Publication 1660 will help you decide which is best for you.

Q. I just received a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320, Letter 3172. I don’t believe I owe this amount. What can I do?

A. Refer to Publication 1660. Letter 3172 gives you 30 days to request a Collection Due Process (CDP) hearing to discuss the lien filing. You should request a CDP hearing using Form 12153 if you feel the lien is inappropriate.

However, as explained in Publication 1660, in a CDP hearing Appeals can only discuss the existence of or amount that you owe under limited circumstances. If Appeals cannot consider the underlying liability, you have three options to re-open that issue:

  • Pay the amount due in full and file a claim for refund. If the IRS disallows your claim you will have the right to appeal at that time.
  • Follow the instructions in Publication 3598 and request an Audit Reconsideration. Note that you must submit new information the IRS did not previously consider in order to have an audit reconsideration.
  • Follow the instructions in Form 656 and file an Offer in Compromise, Doubt as to Liability. Read the instructions in this booklet to determine if you are eligible for this option, and if it is the best one for you.

Q. I just received a Letter L-1058 Notice of Intent to Levy and Notice of Your Right to a Hearing or LT11 Final Notice of Intent to Levy and Notice of Your Right to a Hearing. I don’t believe I owe this amount. What can I do?

A. Refer to Publication 1660. You have 30 days from receipt of an LT11 or -1058 to request a Collection Due Process (CDP) hearing. You should request a CDP hearing using Form 12153 if you feel the levy is inappropriate.

However, as explained in Publication 1660, in a CDP hearing Appeals can only discuss the existence of or amount that you owe under very limited circumstances. If Appeals cannot consider the underlying liability, you have three options to re-open that issue:

  • Pay the amount due in full and file a claim for refund. If the IRS disallows your claim you will have the right to appeal at that time.
  • Follow the instructions in Publication 3598 and request an Audit Reconsideration. Note that you must submit new information the IRS did not previously consider in order to have an audit reconsideration.
  • Follow the instructions in Form 656-B and file an Offer in Compromise, Doubt as to Liability. Read the instructions in this booklet to determine if you are eligible for this option, and if it is the best one for you.

Q. I want to appeal the L-1058 or LT-11 because I don't think I can pay the liability all at once; What should I do?

A. Prepare the Form 12153. Use as much detail as possible to state your issues. To consider collection alternatives, Appeals will also need for you to provide a financial statement, so include Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals and/or Form 433-B, Collection Information Statement for Businesses, as needed. To include this information with your appeal, in addition to the supporting documents these forms request, will greatly reduce the amount of time Appeals needs to make its decision in your case. Appeals will evaluate the financial information and your unique circumstances to try to reach an agreement with you regarding payment of the liability.