8.22.5 Receipt, Control and Pre-Conference Considerations

Manual Transmittal

August 11, 2017

Purpose

(1) This transmits revised IRM 8.22.5, Collection Due Process, Receipt, Control and Pre-Conference Considerations.

Material Changes

(1) See the table below for material changes in this IRM:

IRM Title and Brief Description
8.22.5.1, Overview Removed reference to Uniform Acknowledgement Letter as it was discontinued
8.22.5.2.1, eCase Overview Removed reference to CDP Tracking system. Appeals has discontinued use of CDPTS
8.22.5.2.2.1, Linked and Separate Work Units (WUNOs) Added reference to IRM 8.22.8.8.3 for account mirroring procedures
8.22.5.2.2.3, Feature Codes
  • Added new feature code "EZ" for paperless CDP cases

  • "LI" redefined as any liability issue

  • "CO" feature code removed from the table. Since Collection investigates all CDP OICs, this feature code is no longer used.

8.22.5.2.2.4, CSC Changes Added instruction to input a TC 972 for periods that were included in error and need to be removed.
8.22.5.2.2, Case Summary Card (CSC) Added a reminder that timely requested CDP periods being added to the CSC require APS to add a TC 971 with AC:
  • 275 for a timely CDP

  • 278 for an EH

  • 630 for a combo lien and levy

8.22.5.2.3, Imperfect Hearing Request (4) (d) Clarified the IRS internal data base through which an SSN might be found is IDRS
8.22.5.2.4, Premature Referrals
  • Clarified that (c) applies to cases withdrawn with no Appeals time charged

  • Removed reference to Uniform Acknowledgement Letter as it was discontinued

  • removed guidance for treating a withdrawn CDP with no time charged as a premature referral

8.22.5.2.4.1, Non-Processable Hearing Request Added The request for hearing was made before the Service issued a CDP notice.
8.22.5.2.5, CDP Withdrawals Clarified and added that when an agreed resolution is reached, do not request a withdrawal. Instead:
  • For timely CDPs: Request the taxpayer sign and return Form 12257, Summary Notice of Determination, which protects the taxpayer's right to a retained jurisdiction hearing

  • For EH cases: Issue Letter 5145, Agreed Equivalent Hearing Closing Letter

8.22.5.3, CDP Statute Verification, Controls and Documentation Removed (1) as it repeats content at 8.22.5.3.2 Documentation Requirements - CDP Statute Controls and Verifications
8.22.5.3.1, Determining Timeliness - General Procedures Removed DHL from the list of domestic carriers as they no longer provide domestic delivery
8.22.5.3.2 Documentation Requirements - CDP Statute Controls and Verifications Incorporated Interim Guidance AP-08-0615-0006, Initial Case Actions for Offers in Compromise and Collection Due Process/Equivalent Hearings, which changed the statute review requirement from 5 days to 30 days.
8.22.5.4.1, No Prior Involvement
  • Added "without securing a Form 14041 waiver" to (3)

  • Added "and there are no other hearing officers located in that office" to (8)

8.22.5.4.2, Legal and Administrative (L & A) Procedure Review In the chart at (4), added and the liability is correct to description for the Valid Assessment requirement
8.22.5.4.2.1, Valid Assessment A new introduction to the valid assessment discussions
8.22.5.4.2.1.2, BMF 6020(b) Assessment In (1), added clarification that BMF 6020(b) assessments for employment taxes do not require the issuance of a SNOD.
8.22.5.4.2.1.6, Self-Filed Return Formerly IRM 8.22.5.4.2.1, Valid Assessment - Self-Filed Return. Moved for clarity and flow.
8.22.5.4.2.1.4, Frivolous Return/Submission Penalties New step table for verifying the validity of the assessment.
8.22.5.5, Issues Excluded from CDP Added new (2) for TEFRA issues excluded from CDP.
8.22.5.5.3.1 Processing Frivolous, Desire to Delay or Impede Requests Removed reference to Letter 4836Substantive Contact Letter as it was discontinued
8.22.5.6.1, Types of Appeals Conference
  • Revised to incorporate Interim Guidance on Appeals’ Conference Practices, AP-08-0916-0008

  • Removed reference to Uniform Acknowledgement Letter as it was discontinued

8.22.5.6.1.1, In-Person Conference in the Absence of Eligibility for Collection Alternatives Revised to incorporate Interim Guidance on Appeals’ Conference Practices, AP-08-0916-0008
8.22.5.6.1.2, In-Person Conference and Currently Not Collectible (CNC) Hardship Revised to incorporate Interim Guidance on Appeals’ Conference Practices, AP-08-0916-0008
8.22.5.6.1.3, Case Transfer Requests Revised to incorporate Interim Guidance on Appeals’ Conference Practices, AP-08-0916-0008
8.22.5.6.2, Recording Requirements Changed face-to-face to in-person throughout
8.22.5.6.3, Multilingual Taxpayers Changed face-to-face to in-person
8.22.5.7, Uniform Acknowledgement Letter (UAL) Removed this subsection entirely as the UAL was discontinued as per Interim Guidance AP-08-0615-0006, Initial Case Actions for Offers in Compromise and Collection Due Process/Equivalent Hearings
8.22.5.7 Pre-Substantive Contact Letter (SCL) on Resolved Case Formerly IRM 8.22.5.7.1
8.22.5.8, Substantive Contact Letters (SCL)
  • Clarified that in a suspense case with an unissued SCL, the SCL is issued after the case is taken out of suspense

  • Clarified that a SCL is not necessary when a conference is conducted before the 30 day deadline for issuing the SCL

  • Clarified a SCL is issued for the key CDP case and not for related WUNOs (DP case types IS, OIC or INT)

8.22.5.8, Substantive Contact Letters (SCL) Removed Letter 4836Substantive Contact Letter from the table as it was replaced by Letter 4837 Substantive Contact Letter
8.22.5.9 Separate Timeliness Determinations (CDPTD) Removed reference to Uniform Acknowledgement Letter as was discontinued as per Interim Guidance AP-08-0615-0006, Initial Case Actions for Offers in Compromise and Collection Due Process/Equivalent Hearings
8.22.5.9.1, AARS CDPTD Closing Procedures Clarified that a manager’s approval is not necessary when closing a CDPTD as per Interim Guidance Memorandum AP-08-0916-0006. Also incorporated Interim Guidance Memorandum AP-08-0417-0003 at (3).
Throughout Revised to:
  • Update citations and references

  • Incorporate plain language writing, active voice and organization

Effect on Other Documents

IRM 8.22.5 dated September 30, 2014, is superseded.

Audience

Appeals hearing officers, Appeals Account Resolution Specialists and Appeals Team Managers

Effective Date

(08-11-2017)

Anita M. Hill,
Director, Case and Operations Support

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. Substantive Contact Letters

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

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.

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

    • Telephone 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 telephone 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 received or 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)

  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.

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.

  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. When adding CDP tax periods to the CSC, ask APS to input to the new periods a TC 971 with AC:

    • 275 for a timely CDP hearing

    • 278 for an EH hearing

    • 630 combo lien and levy hearing

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

  7. 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.

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. Refer to IRM 8.22.8.8.3 , Appeals Processing of IS Claim Related to CDP Case, for account mirroring information. 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
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.

    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.

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
    EZ Paperless CDP
    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 Liability issue
    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
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

    3. Input a TC 972 for any periods that were included on Form 12153-B or Form 14461 in error and need to be removed from the CSC.

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 IDRS.

  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.

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 for examples

    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. 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.

  5. 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 6/30/2010 and 9/30/2010; and a CDP lien notice for Form 941 liabilities 12/31/2010 and 3/31/2011. The taxpayer submitted a single Form 12153 requesting only a CDP hearing. The RO determined Form 12153 was submitted timely for both a CDP lien and 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 lien and levy 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 RO determined Form 12153 was submitted timely for both a CDP lien and levy hearing. APS carded the case in as a DPL2 WUNO. 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.

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. The request for hearing was made before the Service issued a CDP notice.

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

    4. 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

    5. 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.

    6. 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

    7. 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
    8. 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

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 the taxpayer and you reach an agreed resolution, do not request a withdrawal. Instead, see below:

    • For timely CDPs: Request the taxpayer sign and return Form 12257, Summary Notice of Determination, which protects the taxpayer's right to a retained jurisdiction hearing.

    • For EH cases: Issue Letter 5145, Agreed Equivalent Hearing Closing Letter.

  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

CDP Statute Verification, Controls and Documentation

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

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. Federal Express (FedEx)

    2. 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.

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

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 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.

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.

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.

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.

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.

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. 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.

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).

Documentation Requirements - CDP Statute Controls and Verifications

  1. Verify and document the following in the CAR within 30 days of receipt of a 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

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.

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 without securing a Form 14041 waiver.

  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 and there are no other hearing officers located in that office, the taxpayer is not offered an in-person conference at that Appeals location unless the taxpayer waives the "no prior involvement" requirement. The taxpayer is offered an in-person conference at another Appeals office if the taxpayer otherwise qualifies for an in-person hearing.

  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.

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.

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).

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 and the liability is correct.
    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 can be 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 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.

Valid Assessment
  1. The subsection below discusses how to verify the validity of different assessments.

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
BMF 6020(b) Assessment
  1. A 6020(b) assessment may be for an individual (IMF) or business (BMF):

    • IMF 6020(b) assessments require the issuance of a SNOD. For IMF 6020(b) assessments, follow IRM 8.22.5.4.2.1.1,Valid Assessment - Statutory Notice of Deficiency (SNOD) above.

    • BMF 6020(b) assessments for employment taxes do not require the issuance of a SNOD. For BMF 6020(b) assessments, follow the guidance below.

  2. A document signed by an authorized IRS employee is a return under IRC 6020(b) if it contains:

    • The taxpayer's name and SSN, EIN or ITIN,

    • Sufficient information to compute the tax liability, and

    • Purports to be a return

    Form 13496, IRC Section 6020(b) Certification, or its automated counterpart, the IRC Section 6020(b) ASFR Certification, meet these requirements.

  3. Appeals may generally rely on TXMOD transcripts to verify that the assessment was properly made. SFR assessments are identified in TXMOD with a TC 150 showing $0.00 assessed.

  4. BMF 6020(b) assessments require the issuance of Letter 1085, 30 Day Letter Proposed IRC 6020(B) Assessment, or Letter 1616, 30 Day Letter, Proposed IRC 6020(b) Assessment Partnership Return. These letters are not sent by certified mail. If the taxpayer denies receipt of the letter, see IRM 8.22.8.7.3, BMF 6020(b) Assessments, and the process for considering liability.

Trust Fund Recovery Penalty (TFRP)
  1. A TFRP assessment is valid if the IRS:

    1. Issued Letter 1153 to the taxpayer’s last known address

    2. Assessed the IRC 6672 penalty more than 60 days after mailing Letter 1153, and

    3. The penalty was assessed within the ASED

  2. Presumptive Rule.Form 941 is filed quarterly. Form 943, Form 944, and Form 945 are filed annually on or before April 15. For purposes of the statute of limitations on assessment, IRC 6501(b)(2) provides a "deemed" filing date for taxes imposed by the following chapters of the IRC:

    • Chapter 3 — Withholding of Tax on Nonresident Aliens and Foreign Corporations

    • Chapter 21 — Federal Insurance Contributions Act

    • Chapter 24 — Collection of Income Tax at Source on Wages

    • Chapter 4 – Taxes to Enforce Reporting on Certain Foreign Accounts

    Any Form 941, Form 943, Form 944 or Form 945 filed for a calendar year before April 15 of the succeeding year is deemed filed on April 15th of the succeeding year and the period of assessment is 3 years from that date. If the return is filed after April 15th of the succeeding calendar year, the period of assessment is three years from the date the return is filed. See also Treas. Reg. 301.6501(b)–1(b) and IRM 4.23.14.1, Examining Process, Employment Taxes, Overview: Period of Limitation for Assessment.

  3. Appeals may rely on TXMOD transcripts showing the IRC 6672 penalty assessments were made to verify that these assessments were properly made. TFRP assessments are identified in TXMOD as a TC 240 with a civil penalty code of 618 and an MFT 55. An extension of the ASED, Form 2750, Waiver Extending Statutory Period for Assessment of Trust Fund Recovery Penalty, or a consent to assessment Form 2751, Proposed Assessment of Trust Fund Recovery Penalty, is verified in TXMOD as well.

  4. Always ask the taxpayer if they received Letter 1153 and document their response.

  5. The taxpayer has alleged an irregularity when they:

    • Deny or can't recall receipt of Letter 1153

    • Deny signing Form 2750 extending the ASED and transcripts show an extension

    • Deny signing Form 2751 consent to assessment and transcripts show a consent

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

    • The source document for the alleged irregularity (Letter 1153, Form 2750 or Form 2751) in the TFRP administrative file

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

  7. If Letter 1153 is not in the CDP file:

    Step Action
    1 Review the corporate ICS history for documentation of personal delivery of Letter 1153 to the taxpayer
    2 If you can't confirm delivery in ICS, generate the "TP disputes TFRP civil penalty" form in APGolf to request a copy of the Letter 1153 and proof of mailing from Collection Advisory (see the Collection Advisory Contact List link in the Resources section of the Appeals CDP web page, or Pub 4235, Collection Advisory Group Addresses. Ask them to check the Automated Trust Fund Recovery (ATFR) program for documentation of personal delivery
    3 Fax the completed form to the appropriate Collection Advisory group ATFR Control Point Monitoring. A list of the fax numbers based on Area can be found on the Control Point Monitors link available on the Appeals TFRP web page
  8. If the Letter 1153 can't be located, the CML can establish Letter 1153 was issued prior to the assessment.

  9. For an alleged irregularity regarding Form 2750 or Form 2751, request the TFRP administrative file from Collection Advisory.

  10. See the table below for how to proceed once you verify whether or not the Letter 1153 was properly issued:

    IF... THEN...
    The taxpayer signed a Form 2751, Consent to Assessment. Verifying Letter 1153 was properly issued is not necessary unless the taxpayer denies signing the consent.
    The IRS did not mail/hand deliver Letter 1153 more than 60 days prior to assessment (absent jeopardy - see IRC 6672(b)(4)) The assessment is invalid and must be abated.
    The IRS did not assess the TFRP before the expiration of the ASED defined by IRC 6501(a). The assessment is invalid and must be abated.
    The Letter 1153 can't be located Use CML to establish the SNOD was issued prior to assessment
    Neither Letter 1153 nor the CML can be located and no other proof of mailing can be found Consult with Area Counsel
Frivolous Return/Submission
  1. It is a requirement of IRC 6320(c) and 6330(c)(1) for Appeals to obtain verification that requirements of applicable law and procedure have been met, including verification that supervisory approval was obtained. This is true even if the taxpayer does not raise the issue of supervisory approval.

  2. To confirm the validity of a frivolous return/submission under IRC 6702 or IRC 6682, see the Step Table below:

    Managerial Approval
    Step Action
    1 Check IDRS for the notation "EFDS/CV/PN" in the MFT 55.
    • If found: Note that ‘EFDS/CV/PN’ confirms the EFDS system determined the penalty and the taxpayer did not respond to the penalty letter. In this situation, managerial approval is not required because an exception exists for penalties automatically calculated by electronic means.

    • If not found: Note that managerial approval of the penalty is required and proceed to Step 2.

    2 Request an ESTAB of the MFT 30 TC 150 and the MFT 55 TC 240. Form 8278 Assessment and Abatement of Miscellaneous Civil Penalties, is attached to one of these documents. The appropriate signature blocks must be completed by the originator and immediate supervisor. Beginning April 1, 2017, electronic copies of signed Form 8278 will be retained on the FRP master database. An electronic copy of Form 8278 may be used to verify approval. If Form 8278 is not located, proceed to Step 3.
    3 Check IDRS for an open control for Frivolous Return Program. If yes, request a copy by calling 1-866-883-0235 or 1-801-620-2406. If no, proceed to Step 4.
    4 If Form 8278 is missing take the following steps:
    1. Obtain a printout of the FRP Master Database for the administrative file

    2. Search for an entry showing the Form 8278 was prepared and submitted to the supervisor for approval, followed by an entry showing that the proposed penalty assessment was either denied or made

      Note:

      If after April 1, 2017, a made assessment entry will also indicate that the assessment was approved.

    3. If the indicator shows that the assessment was made, secure from the database entry that Form 8278 was prepared and submitted the SEID of the employee making the assessment

    4. Visit the Discovery Directory and enter the employees SEID into the search box

    5. Contact the employee and ask whether their immediate supervisor approved the assessment of the penalty in writing

      • If answered "yes" , document the statement and names of the employee and approving supervisor. This statement is sufficient verification of written supervisory approval

      • If answered "no" , the assessment is not verified - move to step 5

        Note:

        If an employee remembers that written approval or denial was received but cannot remember the name of the approving supervisor, the employee’s statement is also sufficient verification that written approval was given.

    .
    5 If you determine that proper approval was not obtained prior to the assessment, the penalty must be abated.
Math Error
  1. A notice of deficiency is not initially required for math error liabilities. A notice of mathematical error is issued notifying the taxpayer that an amount of tax in excess of that shown on the return is due. The notice must identify the alleged error.

  2. The taxpayer may request abatement of the math error liability within 60 days of the notice of mathematical error and the IRS must abate the liability. If the IRS did not abate a math error liability after the taxpayer’s timely request, then the assessment is invalid and must be abated.

  3. If the taxpayer did not timely request abatement of the math error but can show that the assessment was erroneous, then Appeals may reconsider the information and abate the 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.

Notice and Demand Properly Issued
  1. Verify that the IRS issued notice of assessment of tax and demand for payment (notice and demand). IRC 6303 requires the issuance of notice and demand within 60 days of an assessment. You may rely on an TXMOD transcript to verify notice and demand was sent to the taxpayer in accordance with IRC 6303.

  2. A taxpayer may claim the IRS failed to timely issue notice and demand. Failure to issue notice and demand within 60 days doesn’t invalidate the notice or the assessment. See Treas. Reg. 301.6303-1(a). If the IRC 6303 notice was not issued or issued late, any other collection notice constitutes notice and demand for the purposes of the statute.

  3. Treas. Reg. 301.6331-2(a)(1) permits issuance of the Notice of Intent to Levy at the same time as the notice and demand. A Notice of Intent to Levy issued before the expiration of the 10 day notice and demand period is valid.

Balance Due
  1. Balance due verification requires confirming there was a balance due at the time the Notice of Intent to Levy was issued or the NFTL filed. You may rely on TXMOD transcripts and the administrative file to verify there was a balance due.

  2. If there was no balance due at the time the Notice of Intent to Levy was issued, issue a determination that collection may not proceed. See IRM 8.22.5.4.2.4.2 below for corrective actions on improperly issued CDP notices.

  3. If there was no balance due at the time the NFTL was filed:

    1. Prepare Form 13794, Request for Release or Partial Release of Notice of Federal Tax Lien, and identify the NFTL as erroneously filed. Submit it to your ATM to process to Collection Advisory. See the Collection Advisory Contact List link in the Resources section of the Appeals CDP web page, or Pub 4235 , Collection Advisory Group Addresses.

    2. Issue a determination or decision stating that the NFTL was erroneously filed and the lien subsequently released.

      Note:

      Form 13794 is used to release the lien rather than the CDP decision because IRC 6326 requires the IRS to expeditiously (and, to the extent practicable, within 14 days) issue a certificate of release of a lien identified as erroneous.


CDP Notice Properly Issued
  1. You may rely on TXMOD transcripts and the administrative file from Collection to verify a CDP notice was properly issued. That a taxpayer is in Appeals for a timely CDP hearing confirms that any errors in issuance were overcome and not harmful to the taxpayer's request for a hearing.

  2. If an EH taxpayer disputes the timeliness determination on the grounds that notice was not properly issued, confirm that the CDP notice was:

    1. Delivered personally to the taxpayer, or

    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

  3. If you determine an CDP notice was not properly issued and resulted in an EH hearing, the notice is invalid and the following steps are needed:

    1. Step Action
      1 Close the CDP as a premature referral with resolution reason code "IV" on Form 5402, Appeals Transmittal and Case Memo
      2 Inform Collection via Form 5402 that:
      1. The CDP notice is invalid

      2. A substitute notice must be issued, giving the taxpayer a new opportunity to request a hearing

      3 Inform the taxpayer that:
      1. You determined the CDP notice is invalid because it was not issued properly

      2. The request for a CDP hearing request is being returned to Collection so that a proper CDP notice can be issued, and

      3. The taxpayer should request a CDP hearing when the proper notice is received

      Note:

      If the EH taxpayer was in bankruptcy when the CDP notice was issued, inform collection that a substitute notice must be issued after the automatic stay is no longer in effect

  4. Do not withdraw the NFTL on an improperly issued CDP lien notice as that does not affect the validity of the NFTL.

Rescinding a CDP Notice
  1. There is no circumstance in which Appeals rescinds a CDP notice. The tables below describe the corrective action necessary when Appeals discovers an improperly issued CDP notice or a notice issued in error.

Corrective Actions on Improperly Issued CDP Notices and Notices Issued in Error
  1. The table below describes errors that may be found during the CDP lien notice verification and the corrective action:

    IF... Corrective Action Citation
    The NFTL was filed during the automatic stay under the Bankruptcy Code Suspend the hearing while the bankruptcy proceeding is pending and refer the taxpayer to the appropriate Insolvency group regarding the NFTL, which is void if filed in violation of the automatic stay. See IRM 5.12.3.38, Administrative Appeal Rights-Erroneous Lien Filings. The CDP lien notice is nevertheless effective. During the pendency of the bankruptcy's proceeding, suspend the CDP hearing as actions taken during the hearing may risk violating the automatic stay. Upon resumption of the hearing, the taxpayer would still be entitled to a hearing to dispute the future filing of an NFTL and resolve collection of the unpaid tax.
    • Treas. Reg. 301.6326-1

    • Bankruptcy Code 362(a)

    The liability that gave rise to the lien was assessed in violation of the deficiency procedures in IRC 6213 Do not sustain the lien as all legal requirements were not met Treas. Reg. 301.6326-1
    The liability that gave rise to lien was satisfied prior to the filing of the NFTL Do not sustain the lien as all legal requirements were not met Treas. Reg. 301.6326-1
    The collection statute for the liability that gave rise to the lien expired prior to the filing of the NFTL Do not sustain the lien as all legal requirements were not met Treas. Reg. 301.6326-1
    The taxpayer served in or entered a combat zone during the period for filing a request for a CDP/EH hearing The hearing can proceed unless the taxpayer or his legal representative request it to be postponed per IRC 7508. See IRM 8.22.6.12, Combat Zone (CZ) Indicators.
    • IRC 7508

    • Rev. Proc. 2007-56

    The CDP notice was not sent to the taxpayer's last known address AND the taxpayer's request was not timely Close as a Premature Referral and direct Collection to issue a substitute notice per Treas. Reg. 301.6320-1 Q&A-A12. Do not release the lien Treas. Reg. 301.6320-1 Q&A-A12
    If a CDP notice was not sent individually to each joint filer and the individual to whom Collection failed to properly provide notice did not otherwise receive the notice in sufficient time to timely request a CDP hearing
    • Return the case to Collection as a premature referral for that individual who did not properly receive the CDP notice

    • Instruct collection to issue a substitute CDP notice to that individual

    • Proceed with the CDP hearing for the individual who did receive proper CDP notice

    • Treas. Reg. 301.6320-1 Q&A-A12

    • Field - IRM 5.12.1.2.5, When is the CDP Notice (L3172) Generated

    • ACS - IRM 5.19.8.4.1, Notice of Collection Due Process (CDP) Appeal Rights

    The taxpayer waived their right to a CDP notice and hearing but a CDP notice was issued anyway. Close as a Premature Referral per IRM 8.22.5.2.4
    • Form 906, Closing Agreement on Final Determination Covering Specific Matters

    Note:

    See the Collection Advisory Contact List link in the Resources section of the Appeals CDP web page or Pub 4235, Collection Advisory Group Addresses, for a listing with contact information for local Collection Advisory Units.

  2. The table below describes errors that may be found during the CDP levy notice verification and the corrective action:

    IF... Corrective Action Citation
    The Notice of Intent to Levy was issued during the automatic stay under the Bankruptcy Code Close as a Premature Referral and direct Collection to issue a substitute notice per Treas. Reg. 301.6330-1(a)(3) Q&A-A10 after the automatic stay is no longer in effect. Direct collection to send the taxpayer a letter informing that the notice was invalid and another notice will be sent.
    • Bankruptcy Code 362(a)

    • Treas. Reg. 301.6330-1 (a)(3) Q&A-A10

    • IRM 5.11.1.2.2, issuing A Substitute Notice of Intent to Levy/Notice of a Right to Hearing

    The liability that gave rise to the Notice of Intent to Levy was assessed in violation of the deficiency procedures in IRC 6213 Collection may not proceed because the assessment is invalid. Do not sustain levy as all legal requirements were not met. State in the determination or decision the assessment must be abated. IRM 8.22.5.4.2.1.1
    The taxpayer served in or entered a combat zone during the period for filing a request for a hearing The hearing can proceed unless the taxpayer or his legal representative request it to be postponed per IRC 7508 . See IRM 8.22.6.12, Combat Zone (CZ) Indicators.
    • IRC 7508

    • Rev. Proc. 2007-56

    The taxpayer had a pending IA proposal or an approved IA in effect. Make a determination on the IA if still pending. If the taxpayer has an approved IA in effect, make a determination that levy is prohibited.
    • IRC 6331(k)

    • IRM 5.14.1.5, Levy Restrictions and Installment Agreements

    If the taxpayer had a pending OIC. Make a determination on the OIC if still pending
    • IRC 6331(k)

    • IRM 5.8.1.10, Offer in Compromise, Withholding Collection

    If refund litigation was pending for certain types of tax or penalties. Levy action may be prohibited. Research the penalty and applicable collection procedures. If levy is prohibited, close as a Premature Referral
    • IRM 5.11.1.3.10, Refund Litigation

    • IRM 5.7.7.4.2, Withholding Collection — IRC 6672(c)

    • IRM 5.20.8.7, Appealing IRC 6700 and IRC 6701 Penalty Assessments

    If the taxpayer is the requesting spouse in a pending IS claim Make a determination on the IS claim IRC 6015(e)(1)(B)
    The CDP notice was not sent to the taxpayer's last known address AND the taxpayer's request was not timely Close as a Premature Referral and direct Collection to issue a substitute notice. Treas. Reg. 301.6320-1 Q&A-A12
    If a CDP notice was not sent individually to each joint filer and the individual to whom Collection failed to properly provide notice did not otherwise receive the notice in sufficient time to timely request a CDP hearing
    • Return the case to Collection as a premature referral for that individual who did not properly receive the CDP notice

    • Instruct collection to issue a substitute CDP notice to that individual

    • Proceed with the CDP hearing for the individual who did receive proper CDP notice

    • Treas. Reg. 301.6330-1 Q&A-A10

    • Field - IRM 5.11.1.2.2.3, Issuing Notice of Intent to Levy/Notice of a Right to a Hearing for Joint IMF Bal Due account)

    • ACS - IRM 5.19.8.4.1

    The taxpayer waived their right to a CDP notice and hearing but a CDP notice was issued anyway. Close as a Premature Referral per IRM 8.22.5.2.4
    • IRM 5.11.1.2.2.10, Waiver of Notice of Intent to Levy/Notice of a Right to a Hearing

    • Form 13207, Waiver of Right to Receive a Collection Due Process Hearing under IRC 6330

    • Form 906

  3. If levy action is prohibited, issuing a Notice of Intent to Levy may or may not be prohibited.

    Example:

    IRC 6331(k) prohibits levy while an IA proposal is pending plus an additional 30 days after such is rejected. However, the Notice of Intent to Levy may be issued at the same time that the IRS issues the letter formally rejecting the IA proposal. See IRM 5.14.9.7, Independent Administrative Review after Recommended Rejection of Installment Agreement Requests.

Issues Excluded from CDP

  1. This section addresses issues excluded from CDP such as:

    1. Issues specifically excluded by IRC 6330(c)(2)(B) or IRC 6330(c)(4)

    2. Child Support Obligations

    3. Frivolous issues or issues that reflect a desire to delay or impede the administration of federal tax laws

    4. The merits of a refund claim for a non-CDP tax liability

  2. Refer to Notice 2016-007 for TEFRA issues excluded from CDP.

Issues Excluded under IRC 6330(c)(2)(B) and IRC 6330(c)(4)(A)

  1. IRC 6330(c) provides two instances in which Appeals is precluded from considering an issue under CDP:

    1. IRC 6330(c)(2)(B) - Liability is precluded if the taxpayer received a statutory notice of deficiency or otherwise had an opportunity to dispute the tax liability

    2. IRC 6330(c)(4)(A) - An issue was raised and considered at a previous hearing under IRC 6320 or in any other previous administrative or judicial proceeding and the person seeking to raise the issue participated meaningfully in the hearing or proceeding

      Note:

      An administrative or judicial determination under IRC 7429 Jeopardy/Termination Assessment or Jeopardy Levy Review, does not preclude a taxpayer from challenging the existence or amount of the underlying tax liability in a CDP hearing. The IRC 7429 review does not determine the underlying tax liability but involves whether the jeopardy levy was reasonable and whether the method of calculating the assessment amount was done improperly.

  2. The phrase "previous administrative hearing" is limited to an Appeals hearing. The Appeals CAR from a previous hearing shows what issues the taxpayer presented as well as Appeals decision. Similarly, if a court entered a decision on the same issue in a judicial proceeding to which the taxpayer was a party, then the taxpayer is precluded from having the issue considered in the CDP hearing. If there is a question regarding whether an issue was previously "raised and considered" or whether the taxpayer "participated meaningfully," give the taxpayer the benefit of the doubt.

    Example:

    Taxpayer has a CDP lien hearing regarding a 2009 tax liability. The taxpayer had a previous CAP hearing where she proposed an IA which Appeals rejected. The taxpayer's financial situation has not changed since the CAP hearing. The taxpayer is precluded from presenting the same IA proposal in her CDP hearing.

    Example:

    Taxpayer has a CDP levy hearing regarding a 2008 tax liability. The taxpayer had a previous CDP lien hearing for the same tax period during which he submitted an OIC that was not accepted. Since the previous CDP lien hearing, The taxpayer's financial circumstances declined. The taxpayer would not be precluded from submitting the same OIC proposal in the CDP levy hearing. This would not be the same issue raised previously because of the changed financial circumstances.

    Example:

    Taxpayer proposed an IA to Collection which was rejected. The taxpayer could have appealed the rejection to Appeals through CAP, but did not. Taxpayer's financial condition has not changed. The taxpayer is not precluded from raising the same IA proposal in a CDP hearing.

  3. See IRM 8.22.8, Liability Issues and Relief from Liability, for a discussion of liability issues precluded under IRC 6330(c)(2)(B).

Child Support Obligations (CSO)

  1. CSO cases have no CDP hearing rights. IRC 6305 states federal courts have no jurisdiction to restrain or review the assessment and collection of CSO cases. It also states neither the assessment nor the collection of CSOs are subject to review by the Secretary in any proceeding.

  2. Letter 3524, Final Notice - Notice of Intent to Levy, (delinquent child support balance due) is issued specifically for CSOs. The notice of assessment of tax and demand for payment and Letter 3524 are all that is required for IRS to initiate enforced collection on CSO cases.

  3. If Collection forwards a CDP/EH case to Appeals solely on a CSO, advise the taxpayer to contact the CSO agency to resolve the matter. Close the CDP as a premature referral per IRM 8.22.5.2.4.

Frivolous Issues

  1. Appeals may disregard any portion of a CDP or EH hearing request if it:

    1. Is based on a frivolous position which the Service has publicly identified as such, or

    2. Reflects a desire to delay or impede the administration of the federal tax laws



  2. If the entire CDP request is frivolous or reflects a desire to delay, the taxpayer is not entitled to a CDP/EH hearing.

  3. Frivolous position: A hearing request containing a position identified as frivolous in Notice 2010-33 or any successor notices or revenue rulings.

    Example:

    The taxpayer's CDP request states he is morally opposed to war and refuses to pay the portion of his taxes equal to the percentage of the federal budget being spent on any war effort. Notice 2010-33 identifies a taxpayer’s disagreement with the government’s use of tax revenues as a "frivolous position." Because the taxpayer's position is identified as frivolous in Notice 2010-33, it may be disregarded.

  4. Desire to delay or impede the administration of federal tax laws: A hearing request containing a statement reflecting a desire to delay or impede the administration of federal tax laws that reflects one or more of the following:

    1. A reason that is not a "specified frivolous position" but is a frivolous reason reflecting a desire to delay or impede federal tax administration

    2. A reason that is not a "specified frivolous position" but is a based on moral, religious, political, constitutional, conscientious, or similar objections to the imposition or payment of federal taxes

      Note:

      With the exception of a legitimate, unsettled constitutional question, such objections reflect a desire to delay or impede the administration of federal tax laws.

      Example:

      The taxpayer's request states he is not required to pay federal income taxes because the Oklahoma Constitution exempts him from having to pay federal taxes. Even though this position is not a "specified frivolous position" listed in Notice 2010-33, it is still frivolous as it shows a desire to delay or impede federal tax administration.

      Example:

      The taxpayer's request states the interest she earned on unregistered, publicly offered long-term bonds issued by a state government is exempt from federal income tax by the 10th Amendment to the Constitution. The Supreme Court has held that it is not unconstitutional for Congress to tax such interest (see South Carolina v. Baker, 485 U.S. 505, 108 S. Ct. 1355, 99 L. Ed. 2d 592 (1988)). Even though this is not a "specified frivolous position" listed in Notice 2010-33, it is well-settled law that such interest is taxable. This position demonstrates the taxpayer’s desire to impede the administration of taxes. Ensure the taxpayer is aware of the Supreme Court decision before disregarding the position or hearing request.

      Example:

      The taxpayer's request states he wants his federal taxes waived because he's entitled to his own personal bailout. The taxpayer objects to government bailouts of banks and believes he's entitled to equal treatment. Even though this is not a "specified frivolous position" listed in Notice 2010-33, it is frivolous and shows a desire to delay or impede federal tax administration.

  5. Hybrid: A hearing request where the taxpayer raises at least one relevant issue in addition to frivolous, delaying or impeding issues. Appeals must proceed with a CDP/EH hearing on the relevant issue(s) while disregarding the frivolous/desire-to-delay issues.

  6. See the table below to determine how to proceed with a frivolous or desire to delay CDP request:

    If the taxpayer's CDP request includes... Then...
    Only frivolous or desire to delay issues See IRM 8.22.5.5.3.1
    Frivolous or desire to delay issues AND at least one relevant issue See IRM 8.22.5.5.3.2
Processing Frivolous, Desire to Delay or Impede Requests
  1. Input ACDS Feature Code 'FV' to ACDS.

  2. Letter 4380, Appeals Received Your Request for a Collection Due Process and/or Equivalent Hearing (specified frivolous position), is used to allow the taxpayer 30 days to:

    1. Amend the request to state a relevant issue and withdraw the frivolous issues or issue reflecting a desire to delay or impede federal tax administration in cases where no relevant issue has been raised, or

    2. Withdraw the frivolous/desire-to-delay hearing request.

      Note:

      Due to the seriousness of disregarding hearing requests, assign such cases to employees trained to recognize such requests.

  3. Before sending Letter 4380, verify that the taxpayer did not raise a relevant issue in a non-specific manner. Examples of non-specific, relevant issues include:

    • "I would like to propose a collection alternative"

    • "I believe the collection action is not appropriate or would create a hardship"

    • "I believe the assessment is not valid"

    Note:

    Checking a box (excluding the "other" box) on Form 12153 is sufficient to raise an issue, and requires a hearing even if the taxpayer does not write anything in the space provided or separately in a letter.

    If... Then...
    The taxpayer has raised a relevant issue in a non-specific manner, along with frivolous, delaying or impeding issues DO NOT issue Letter 4380. Follow the instructions in IRM 8.22.5.5.3.2 on hybrid requests
    You completed a thorough evaluation of the taxpayer's submissions and verified that no relevant issues were raised Check Notice 2010-33, effective for frivolous submissions after April 7, 2010, and determine whether all the taxpayer's issues have been identified as published frivolous issues
    All issues raised are published frivolous issues Issue Letter 4380 within 30 days of the date of the assignment of the case
  4. If the taxpayer has raised no relevant issues, prepare a separate Letter 4380 for each taxpayer if the hearing request is signed by both joint taxpayers. This is required even if the taxpayers are living at the same address.

  5. The following table contains instructions and next steps after the Letter 4380 is issued:

    If... Then...
    The taxpayer responds to Letter 4380 with a relevant issue and withdraws the frivolous/delaying/impeding issue Issue Letter 4837 within 15 calendar days of receiving the taxpayer's response. Eligibility for an in-person conference is subject to procedures in IRM 8.22.5.6.1 through IRM 8.22.5.6.1.1
    The taxpayer responds to Letter 4380 with a relevant issue and does not withdraw the frivolous issue Issue Letter 3846 within 15 calendar days of receiving the taxpayer's response. The taxpayer is not eligible for an in-person conference as per IRM 8.22.5.6.1
    The taxpayer either fails to respond to the Letter 4380 within 30 days, or responds solely with the same or additional frivolous/desire to delay or impede issues Proceed to IRM 8.22.9.5.2, Letter 4381 Disregarded Hearing Request
  6. Never disregard a CDP hearing request after offering the taxpayer the opportunity for a conference, even if the taxpayer is a no show/no response.

Processing Hybrid Requests
  1. Input ACDS Feature Code 'FV' to ACDS.

  2. Letter 3846 is issued:

    1. Within 30 days of receipt of a CDP hearing request identified as a hybrid request case, or

    2. Within 15 days of receipt of the taxpayer's response to the previously issued Letter 4380 raising a relevant issue for the first time

  3. If the taxpayer proposed an alternative to collection, use Letter 3846 to request required financial information and address any unresolved compliance issues. Letter 3846 serves two purposes:

    1. Schedules a telephone conference with the taxpayer, and

    2. Offers the taxpayer the opportunity to withdraw the "specified frivolous position" or issues reflecting a desire to delay or impede collection of the tax.

  4. If the taxpayer asks for but does not qualify for an in-person conference because the frivolous, delaying or impeding issues were not withdrawn, document at least one of frivolous, delaying or impeding issue in the CAR so that the Tax Court can see why an in-person conference was not given.

  5. If the taxpayer does not discuss relevant issues and pursues frivolous, desire to delay, impede arguments during the conference, warn that the conference will be discontinued. If the taxpayer continues to espouse only frivolous, or desire to delay or impede arguments, discontinue the conference.

  6. Document any discussion with the taxpayer about withdrawal of the frivolous or desire-to-delay position.

The Merits of a Non-CDP Tax Liability

  1. Taxpayers may not raise a non-CDP tax period liability by characterizing it as a "relevant issue" under IRC 6330(c)(2)(A). Appeals will not consider the substantive merits of a refund claim for a non-CDP tax period to determine whether there is an overpayment that could be applied to the CDP liability.

Pre-Conference Considerations

  1. This section contains CDP-specific guidance on preparing for and conducting conferences, supplementing IRM 8.6.1.4, Conference Techniques Used by Appeals Technical Employees.

  2. Appeals must follow the terms of the Service Level Agreement between TAS and Appeals for all TAS Criteria Code 1-4, signified by ACDS feature code 'T1,' and TAS Criteria Code 5-7 cases, signified by ACDS feature code 'T5.' The Service Level Agreement is available on the Appeals web.

Types of Appeals Conference

  1. Appeals conference practices are found in IRM 8.6.1.4, Conference Techniques Used by Appeals Technical Employees, and the following subsections:

    • IRM 8.6.1.4.1, Conference Practice

    • IRM 8.6.1.4.1.1, In-Person Conferences: Case Assistance

    • IRM 8.6.1.4.1.2, In-Person Conferences: Circuit Riding

    • IRM 8.6.1.4.5, Virtual Service Delivery (VSD), where it is available

      Note:

      VSD employs teleconferencing technology permitting virtual face-to-face meetings from remote locations.

  2. The Substantive Contact (SCL) Letter offers taxpayers the opportunity for an in-person conference. Individual taxpayers who request and qualify for an in-person conference will be accommodated following procedures in IRM 8.6.1.4.1.1, In-Person Conferences: Case Related Assistance, IRM 8.6.1.4.1.2, In-Person Conferences: Circuit Riding, or IRM 8.6.1.4.5, Virtual Service Delivery. Employees will utilize these procedures to afford taxpayers an in-person conference at an Appeals office closest to their residence or principal place of business.

  3. If the taxpayer is entitled to a CDP hearing but neglects to participate, a review of the documents in the case file constitutes the CDP hearing.

  4. Regardless of the provisions in IRM 8.6.1.4.1, Conference Practice, an in-person conference will not be offered in the following circumstances:

    1. Taxpayers identified as potentially dangerous, without Criminal Investigation or Treasury Inspector General Tax Administration protection at the meeting. See IRM 25.4 for additional information about Potentially Dangerous Taxpayer and Caution upon Contact Programs.

    2. Taxpayers who include a frivolous, delaying or impeding argument in their hearing request.

    3. Taxpayers who are not eligible for the collection alternative they seek based on IRS policy.

In-Person Conference in the Absence of Eligibility for Collection Alternatives
  1. A taxpayer seeking an in-person conference must meet the criteria in IRM 8.6.1.4.1.

  2. If a taxpayer meets the criteria for an in-person conference and the sole purpose of the conference is to discuss a collection alternative, Appeals may require financial information and/or compliance with filing requirements or deposits of tax as a condition to granting the in-person conference if the collection alternative requires such.

  3. Treas. Reg. 301.6330-1(e) states, Taxpayers will be expected to provide all relevant information requested by Appeals, including financial statements, for its consideration of the facts and issues involved in the hearing. Treas. Reg. 301.6330-1 Q&A-D8 further states, A face-to-face CDP conference concerning a collection alternative, such as an installment agreement or an offer to compromise liability, will not be granted unless other taxpayers would be eligible for the alternative in similar circumstances. Eligibility requirements are those threshold conditions that must be met in order for Appeals to consider the taxpayer's proposed alternative to collection. The regulations give the filing of required returns and making certain required deposits of tax as examples of eligibility requirements.

  4. If the taxpayer otherwise meets the criteria for an in-person conference and the sole purpose of the CDP hearing is to discuss a collection alternative which the taxpayer does not appear eligible for, Appeals must give taxpayers an opportunity to present:

    1. Required financial information

    2. Unfiled returns

    3. Evidence of deposit of tax necessary to enable consideration of collection alternative – see table below

  5. The following table contains the requirements for consideration of collection alternatives and thus, when "other taxpayers would be eligible for the alternative in similar circumstances:"

    Collection Alternative IRM Reference Financial Info Unfiled Returns ES/FTDs
    Yes No Yes No Yes No
    Installment payment agreement (including partial payment installment agreements) involving non-trust fund tax
    • IRM 5.14.1.3, Identifying Pending, Approved and Rejected Installment Agreement Proposals on IDRS, regarding financial information

    • IRM 5.14.1.4.1, Compliance and Installment Agreements, regarding unfiled returns and deposits of tax

    X X X
    Guaranteed or streamlined installment payment agreement
    • IRM 5.14.5, Streamlined, Guaranteed and In-Business Trust Fund Express Installment Agreements, regarding financial info

    • IRM 5.14.1.4.1 regarding unfiled returns and deposits of tax (ES and FTDs)

    X X X
    In-business trust fund installment agreement IRM 5.14.7.4, In-Business Trust Fund Installment Agreements Requiring Financial Analysis and Determining Ability to Pay X X X
    Express in-business trust fund installment payment agreement IRM 5.14.5.4, In-Business Trust Fund Express Installment Agreements X X X
    Offer in compromise for individual (based upon doubt as to collectibility)
    • IRM 5.8.3.5, Processing Forms 656 and Initial Offer Payments, regarding financial information

    • IRM 5.8.7.2.2.2, Return for Inadequate Estimated or Insufficient Withholding Tax Payments, regarding ES and adequate withholding (and that such is a basis for returning an offering but not a basis for not considering the offer)

    X X X
    Offer in compromise involving unpaid trust fund tax
    • IRM 5.8.3.5, regarding financial information

    • IRM 5.8.7.2.2.3, Return for Failure to Make Timely Federal Tax Deposit, regarding FTDs (and that such is a basis for returning an offering but not a basis for not considering the offer)

    X X X

    Caution:

    The determination of a taxpayer's eligibility for a collection alternative must be made without regard to the taxpayer's ability to pay the unpaid tax. Submission of financial information is not an opportunity for Appeals to prejudge the viability of a collection alternative prior to the conference. An in-person conference can't be denied because the initial review of the financial information shows that the taxpayer appears to be able to pay the tax in full or isn’t able to make the payments proposed.

  6. If the taxpayer meets the criteria for an in-person conference as noted in IRM 8.6.1.4.1 and the sole basis of the CDP request is to discuss a collection alternative, give the taxpayer a reasonable opportunity (14 calendar days) to:

    1. Demonstrate they are eligible for the collection alternative they seek (e.g., the taxpayer has already filed the required return or there was no filing requirement for a particular tax period), or

    2. Become eligible by filing required returns and/or making required deposit of tax

  7. Advise the taxpayer that Appeals will schedule a telephone conference if he/she fails to provide the necessary financial information by the deadline.

  8. There may be instances in which a taxpayer needs more than 14 days to make a deposit of tax, prepare financial information or file a delinquent return. An extension to a deadline may be granted if the facts support it.

  9. If the taxpayer submits some but not all requested financial information, determine whether the information is sufficient to practically discuss the proposed collection alternative at an in-person conference. For example: the missing information is insignificant in determining ability to pay or may be easily obtained from a different, routinely used source.

  10. Do not condition an in-person conference on the production of supporting documents to the collection information statement for a taxpayer who otherwise meets the criteria for an in-person conference.

  11. Grant an in-person conference if the financial information is less than 12 months old as this meets the general eligibility requirement. An in-person conference may be conditioned on the submission of updated financial information if the taxpayer's financial condition is known to have significantly changed since the date the prior financial information was prepared.

  12. The following table contains scenarios to assist in determining whether a taxpayer who meets the criteria in IRM 8.6.1.4.1 and whose sole issue is the discussion of a collection alternative should be granted an in-person conference:

    Scenario In-Person?
    Taxpayer requests an in-person conference to discuss an IA. You inform the taxpayer that she must submit her unfiled returns for 2009 and 2010 to qualify for an IA and to obtain the in-person conference. Taxpayer states these will be refund returns and neglects to submit them by the deadline given. No
    Taxpayer requests an in-person conference to discuss a doubt as to collectibility OIC. She submitted a Form 433-A that was missing information. You determine there is sufficient information to discuss the merits of her OIC and that the missing information can be secured from another source. Yes
    Taxpayer requests an in-person conference to discuss evidence he has that shows payments made towards the liability are not reflected on his transcript. Since the taxpayer raised the issue of application of payments, you schedule an in-person conference. Yes
    Taxpayer requests an in-person conference for a collection alternative. Taxpayer states he does not understand how to calculate the offer amount on an OIC. You schedule an in-person conference to explain how to fill out Form 656. Yes
In-Person Conference and Currently Not Collectible (CNC) Hardship
  1. A taxpayer seeking an in-person conference must meet the criteria in IRM 8.6.1.4.1.

  2. If a taxpayer meets the criteria for an in-person conference and the sole purpose of the CDP conference is to discuss CNC hardship, Appeals may require the taxpayer to provide the financial or other documentation necessary to consider the claim of CNC hardship as an additional condition to granting an in-person conference, unless Appeals determines that the in-person conference is necessary to explain the requirements for obtaining CNC-hardship status.

    Example:

    The taxpayer meets the criteria in IRM 8.6.1.4.1 because the taxpayer has special needs and the ATE determined those special needs would require an in-person conference to explain CNC hardship requirements without the submission of financial or other documentation.

  3. Give the taxpayer a reasonable opportunity (14 calendar days) to provide the financial or other documentation necessary to consider the claim of CNC hardship. Advise the taxpayer that Appeals must schedule a telephone conference if he/she fails to provide the necessary information by the deadline.

  4. If a taxpayer submits some but not all of the requested financial or other documentation, determine whether the information is complete enough to practically discuss the CNC request at an in-person conference. If it is not, give the taxpayer a reasonable opportunity (14 calendar days) to supplement its submission to qualify for the in-person conference requested.

  5. If taxpayer otherwise qualifies for an in-person conference and the UPBA is less than $10,000, the taxpayer may not need to submit financial information to qualify for CNC-hardship. See IRM 5.16.1.2.9, Hardship.

Case Transfer Requests
  1. Procedures regarding the transfer of cases can be found in IRM 8.6.1.4.2, Change of Appeals Technical Employee (ATE) After Initial Contact.

  2. Generally, a taxpayer does not have the right to a conference with an ATE other than the one assigned to his or her case. However, in CDP cases, where the ATE has had prior involvement, the case must be reassigned to an ATE with no prior involvement. If the assigned ATE 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 and there are no other ATEs in that office, the taxpayer is not offered an in-person conference at that Appeals location unless the taxpayer waives the no prior involvement requirement. The taxpayer is offered an in-person conference at another Appeals office if the taxpayer otherwise qualifies for an in-person hearing. See Treas. Reg. 301.6330-1(d)(2). See IRM 8.22.5.4.1, No Prior Involvement.

  3. Employees will utilize procedures in IRM 8.6.1.4.1.1, In-Person Conferences: Case Related Assistance, IRM 8.6.1.4.1.2, In-Person Conferences: Circuit Riding, or IRM 8.6.1.4.5, Virtual Service Delivery, to accommodate an in-person conference request when an in-person conference is appropriate.

Recording Requirements

  1. Audio recordings are allowed in in-person conferences if a taxpayer provides:

    • 10 days advanced notice, and

    • Their own recording equipment

  2. Review Notice 89-51, 1989-1 C.B. 691 for audio recording procedures. While this Notice requires 10 days advanced notice before a conference is to be recorded, Appeals may choose to waive this requirement.

  3. Inform your ATM of audio recording requests and make an audio recording of the conference with IRS equipment.

  4. The right to make an audio recording of an in-person conference does not extend to telephone conferences. If you become aware that a taxpayer or representative is recording or attempting to record a telephone conversation, advise that the recording must stop. If the recording is not stopped, terminate the call and document your case activity record.

  5. Taxpayers raising frivolous issues are not eligible for an in-person conference and thus, not eligible to make an audio recording of an Appeals conference.

  6. Appeals allows stenographic recordings by court reporters provided they have the following credentials and the taxpayer qualifies for an in-person conference:

    1. Qualified as a court reporter of the United States District Court,

    2. An independent reporter qualified to take depositions for use in a United States District Court, or

    3. Licensed or certified by any state to be a court reporter or to take depositions

  7. Appeals audio records any conference where a stenographic recording is made and request a copy of the stenographer's record. If costs involved are too high, do not secure a copy of the stenographer's record.

  8. Additional audio recording procedures for Appeals are found in IRM 8.6.1.5, Audio and Stenographic Recording of Conferences.

Multilingual Taxpayers

  1. Executive Order 13166, "Improving Access to Services for Persons with Limited English Proficiency” requires Federal agencies to:

    1. Examine the services they provide,

    2. Identify needs for services to those with limited English proficiency (LEP), and

    3. Develop and implement a system that ensures meaningful access to necessary services for LEP persons

  2. Guidelines and procedures for implementing Executive Order 13166 are found in IRM 22.31.1, The Multilingual Initiative.

  3. IRS contracts with an outside vendor to provide over-the-phone interpreter (OPI) services in over 170 languages. A conference using the OPI service consists of the Appeals employee, the taxpayer and the interpreter. The OPI service is fast, easy to use and available to everyone in Appeals. Step-by-step instructions for using the OPI service as well as other useful links and information are available on the Appeals Multi-Language Strategy (MLS) web page.

  4. Per guidance issued by Disclosure, a minor child can serve as an interpreter for his/her parent during an Appeals conference.

  5. A CDP may be transferred to an Appeals office with required cultural knowledge even if it does not otherwise qualify for transfer or an in-person conference.

Specialized Industry Taxpayers

  1. Recognize and be sensitive to taxpayers with issues that require specialized:

    1. Industry knowledge (e.g., oil and gas, agriculture)

    2. Legal expertise (e.g., community property law)

  2. A CDP may be transferred to an Appeals office with required industry or legal knowledge even if it does not otherwise qualify for transfer for an in-person conference.

Pre-Substantive Contact Letter (SCL) on Resolved Case

  1. You may discover the issue raised by a taxpayer in the CDP/EH request was fully resolved by Collection. Examples include:

    • Full payment via refund offset

    • IA

    • Adjustment to the liability

    • Account placed in CNC status

  2. In such instances, request a withdrawal using Letter 4388 and a fourteen (14) calendar day deadline.

  3. If the taxpayer does not withdraw, issue the SCL per IRM 8.22.5.8 below.

Substantive Contact Letters (SCL)

  1. SCLs include information about the Appeals process and what Appeals considers as part of the CDP/EH hearing. See the table below to determine the appropriate SCL to use for your case:

    Letter Number Purpose Time Frame for Issuing
    Letter 4837
    • Schedule the conference

    • Inform taxpayers of the opportunity to request an in-person conference

    • Request supplemental information or documentation

    • Standard Case: 30 days from receipt

    • Rapid Response Appeal Process (RRAP) Case: 10 days from assignment to Appeals hearing officer. See IRM 8.22.6.2.1

    • Liability Issue Case: 60 days from receipt if the case involves a liability challenge requiring a return and/or administrative file

    • Frivolous Issue Case: 15 days if a response is received to Letter 4380 with relevant issue(s) raised and previous frivolous arguments or issues are withdrawn (see Letter 3846 below for case in which the frivolous arguments are not withdrawn)

    Letter 3846
    • Offers taxpayer raising frivolous or delaying arguments an opportunity to withdraw such arguments or issues

    • Provides information about possible imposition of IRC 6702(b) penalty

    • Informs taxpayer that he/she is not entitled to an in-person conference

    • 15 days if a response is received to Letter 4380 with relevant issue(s) raised and previous frivolous arguments or issues are not withdrawn

    • 30 days receipt if both frivolous and relevant issues have already been raised

  2. Letter 4837 is not required by statute, so separate correspondence to joint filers is not required. Conversely, combination UAL-SCL Letter 3846, which advises taxpayers that the CDP hearing request contains a frivolous argument and informs them of the right to withdraw the argument to avoid a civil penalty under IRC 6702(b), is required by statute and must be sent separately to joint filers.

  3. If a conference takes place before the issuance of the Letter 4837 or if substantive contact is made by telephone, the SCL is not necessary provided you discuss the key items addressed in the SCL. Document your discussion of these items in your CAR:

    • Timeliness of the hearing request

    • Appeals independence

    • Your impartiality

    • Types of hearings available: teleconference, correspondence and in-person

    • Appeals verifies legal and administrative procedures were met, considers issues raised and conducts a balancing test

    • If timely CDP, availability of Tax Court rights

    • Accrual of interest on an unpaid liability

    • The taxpayer’s right to representation

  4. A SCL is issued for the key CDP case and not for related WUNOs (DP case types, usually IS, OIC or INT).

  5. If the case is placed in a suspended status prior to issuance of the SCL, issue the SCL after the case is taken out of suspense. The following table contains common reasons why a CDP case is suspended and where guidance on the issue may be found:

    Reason for Suspense IRM Reference ACDS Status Code
    Innocent spouse IRM 8.22.8.9 E/OTH
    Offer in compromise under consideration by Collection IRM 8.22.7.10.6 E/OIC
    Criminal investigation IRM 8.22.6.10 E/OTH
    Bankruptcy IRM 8.22.6.8 E/BNK
    Combat zone IRM 8.22.6.12 E/OTH
    Liability being considered by appeals officer IRM 8.22.8.5.1 E/AP
    TFRP IRM 8.22.8.11 E/OTH

Establishing Deadlines

  1. Deadlines in CDP are determined on a case-by-case basis and often communicated in the SCL. Before establishing a deadline, consider:

    • The complexity or volume of information needed, and

    • The circumstances of the taxpayer

  2. Allow at least 14 calendar days for a taxpayer to collect and provide information necessary for considering collection alternatives or issues of dispute.

  3. Allow at least 21 calendar days for a taxpayer to file or amend a tax return.

  4. If a taxpayer requests an extension of time to provide information requested, the deadline may be extended.

  5. If a taxpayer fails to provide information requested, proceed based on the information available and note this in your determination/decision. A taxpayer's failure to provide information requested precludes Appeals from considering collection alternatives.

No Response Cases

  1. If a taxpayer does not respond to the SCL letter, you must make a second attempt at contact. In such instances, your case history must reflect a minimum of 2 contact attempts.

  2. Letter 4000, Last Chance Letter, is the preferred method for the second contact attempt. If the second attempt is made by telephone, document it in the CAR.

  3. For the second contact attempt:

    1. Give the taxpayer a reasonable and specific deadline to respond. As a general rule, allow 14 calendar days

    2. Ask the taxpayer if he/she has any further information for consideration

    3. Inform the taxpayer that Appeals must proceed with its determination(s) based on the administrative file and whatever other information the taxpayer previously provided if the taxpayer does not respond

    4. The issuance of Letter 4000 does not preclude giving the taxpayer a second opportunity for a CDP conference if the circumstances warrant.

  4. A well documented administrative file with copies of all correspondence is critical in such cases. If a taxpayer petitions claiming you did not allow a reasonable opportunity to participate or respond, the Tax Court relies on the administrative file to evaluate whether you abused your discretion.

Separate Timeliness Determinations (CDPTD)

  1. Appeals makes a separate timeliness determination for CDP cases in the following instances:

    The CDP hearing request was not timely and the taxpayer did not check the EH box on Form 12153 or verbally request an EH. See IRM 8.22.5.3.1, Determining Timeliness - General Procedures.
    The CDP hearing request was timely but not processable. The taxpayer perfected the hearing request late and did not request an EH.
    The EH hearing request was not timely received. See IRM 8.22.5.3.1.2. Determining Timeliness - Equivalent Hearing, and IRM 5.1.9.3.2.2, Equivalent Hearing (EH) and Timeliness of Equivalent Hearing Requests.
    The taxpayer perfected the hearing request after the time period specified by collection and after the one year period for requesting an EH.
  2. Collection faxes the following documents to APS:

    1. Form 12153

    2. The envelope the request was mailed in

    3. A copy of the CDP notice (Letter 3172, LT11, etc.)

    4. Any written correspondence to and from the taxpayer, including any documents submitted by the taxpayer

    5. History (only ACS required to fax history; Appeals has access to ICS history on field Revenue Officer cases)

  3. APS cards in the separate timeliness determination case as TYPE = CDPTD in the OTHER/Miscellaneous category.

  4. AARS works and closes CDPTD requests within 5 workdays of assignment.

  5. If Collection misidentifies a case on Form 14461 or Form 12153-B and APS cards the case in as a DPxx, request APS:

    • Reverse the TC 520 with TC 522. TC 522 reverses all open TC 520s having either CC 76 or 77

    • Close the case using CC 14 because Appeals sustains Collection’s Timeliness Determination that the request was not timely.

  6. For a case referred as a DPXX case where you determine that one or more of the periods are untimely, request APS:

    • Delete the untimely periods from the case summary card

    • Reverse the TC 520 with TC 522

AARS CDPTD Closing Procedures

  1. Select one (or both) of the following paragraphs appropriate to the CDPTD:

    1. CDP-EH hearing request was untimely USPS postmarked or metered, or was received greater than one-year after issuance of the CDP notice

    2. CDP hearing request was untimely received and the taxpayer did not request an EH.

      Note:

      If you select both paragraphs you need to clearly identify which tax periods apply to each paragraph.

  2. Enter the periods for which Appeals does not sustain Collection's timeliness determination in the "Remarks" section of Form 5402.

    Note:

    Sometimes the Form 12153 contains multiple tax periods from more than one CDP notice and the request for a hearing can be timely for some periods and not timely for others.

  3. Procedures for CDPTD paperwork:

    1. Provide a copy of Form 5402 to the ATM for entry of the ACAP date on ACDS. There is no need for the ATM to sign the form.

      Note:

      There is no need for an ATM signature on the form.

    2. Provide copy of Form 5402 to APS to close case on ACDS

    3. Fax all documents back to originator

  4. Use the table below to determine the closing code for a CDPTD case where Collection considered the CDP request untimely:

    IF... AND... THEN...
    Appeals determines the CDP request was not received timely The taxpayer did not request an EH Use cc 14, Appeals sustains Collection’s Timeliness Determination
    Appeals determines the CDP request was received timely Use cc 15, Appeals does not sustain Collection’s Timeliness Determination
    Appeals determines the CDP hearing request was received timely for some of the periods and not timely for others The taxpayer did not request an EH Use cc 16, Appeals partially sustains Collection’s Timeliness Determination

    Note:

    Specify in the "Remarks" section of Form 5402 which periods are timely and which are not timely

  5. Use the table below to determine the closing code for a CDPTD case where Collection considered the CDP request to have been perfected late:

    IF... AND... THEN...
    Appeals determines the CDP request was not received timely Use cc 14, Appeals sustains Collection’s Timeliness Determination
    Appeals determines the CDP request was received timely but was not processable when submitted by the taxpayer
    • The taxpayer was given a reasonable period of time to perfect the hearing request (see IRM 5.1.9.3.2.3 (field) and IRM 5.19.8.4.2.2 (ACS), and

    • The taxpayer failed to perfect the hearing or perfected it beyond of the time period for perfection

    Use cc 14, Appeals sustains Collection’s Timeliness Determination
    Appeals determines the CDP request was received timely but was not processable when submitted by the taxpayer
    • The taxpayer perfected the hearing request with a timely and adequate response within the reasonable time period specified by Collection, or

    • The taxpayer perfected the hearing request beyond the time period of perfection, but the time period for perfection was not reasonable under the circumstances

    Use cc 15, Appeals does not sustain Collection’s Timeliness Determination
  6. Use the table below to determine the closing code for a CDPTD case where Collection considered the EH request untimely:

    IF... THEN...
    Appeals determines the EH request was not received timely Use cc 14, Appeals sustains Collection’s Timeliness Determination
    Appeals determines the EH request was received timely Use cc 15, Appeals does not sustain Collection’s Timeliness Determination
    Appeals determines the EH request was received timely for some periods and not for others Use cc 16, Appeals partially sustains Collection’s Timeliness Determination

    Note:

    Specify in the "Remarks" section of Form 5402 which periods are timely and which are not timely

  7. Use the table below to determine the closing code for a CDPTD case where Collection considered the CDP request to have been perfected late:

    IF... AND... THEN...
    Appeals determines the EH request was not received timely Use cc 14, Appeals sustains Collection’s Timeliness Determination
    Appeals determines the EH request was received timely but was not processable when submitted by the taxpayer
    • The taxpayer was given a reasonable period of time to perfect the hearing request (see IRM 5.1.9.3.2.3 (field) and IRM 5.19.8.4.2.2 (ACS), and

    • The taxpayer failed to perfect the hearing or perfected it beyond of the time period for perfection and after the one year period for requesting an EH

    Use cc 14, Appeals sustains Collection’s Timeliness Determination
    Appeals determines the EH request was received timely but was not processable when submitted by the taxpayer
    • The taxpayer perfected the hearing request with a timely and adequate response within the time specified by Collection, or

    • The taxpayer perfected the hearing request beyond the time period of perfection, but the time period for perfection was not reasonable under the circumstances

    Use cc 15, Appeals does not sustain Collection’s Timeliness Determination