A CDP hearing is an opportunity to discuss alternatives to forced collection and allows you to challenge the amount you owe if you haven't had a prior opportunity to do so. You don't need to wait for final notice and it's in your best interest to respond to Notice CP504. Check out our interactive tax map to see what phase of the tax process you are at. It could help you navigate the IRS. Before the IRS issues a garnishment, it must notify the taxpayer one last time of its intention to collect.
If the IRS files a tax lien, the IRS must notify the taxpayer after the tax lien has been filed. The notices give the taxpayer 30 days to request a due process of collection (CDP) hearing. If a CDP hearing is requested on time, all collection actions are suspended until the CDP is resolved. We will review the CDP request here when a notification of intent to collect is sent to the taxpayer.
Due process means fair treatment through the judicial system. Due process of collection simply refers to fair treatment in the tax collection process. A CDP hearing ensures that the IRS does not unfairly seize your assets or issue tax liens. A due process hearing offers you the opportunity to ask for “wait time” and propose an agreement to the IRS instead of facing forced collection.
Congress created the CDP process with the Internal Revenue Service Restructuring and Reform Act of 1998 (Act of 98). See IRS Publication 594, The IRS Collection Process, and Publication 1660, Collection Appeal Rights, for a full explanation of the CAP. This notice is contained in letter 1058, entitled Final Notice of Intent to Collect and Notification of Your Right to a Hearing. Form 12153, Request for a Due Process of Collection Hearing, is included in the CDP notification sent to the taxpayer.
If you have an outstanding debt with the Internal Revenue Service (IRS) that hasn't been resolved, the IRS can continue collection activities. If you miss the 30-day deadline, you can still request an equivalency hearing, but the IRS is authorized to process the debt against you pending the hearing. If the taxpayer and the settlement officer reached an agreement during the hearing, the notice will describe the terms of their agreement. This gives the taxpayer 30 days to request a CDP hearing before any garnishment occurs, and the CDP notification must contain a statement to that effect.
If you have an outstanding tax debt and are facing collection actions, you can consider appealing due process of collection (CDP). The notice of determination will also explain the terms of the payment plans, compromise offer agreements, or other agreements decided during the CDP hearing. File Form 12153 (Request for Collection of Due Process or Equivalent Hearing) to request a CDP hearing. This is a very strict requirement, and if you don't file your request within the required 30 days, you lose the right to a request for a hearing from the CDP.
A CDP appeal offers you the opportunity to stop IRS collections and speak directly with an IRS settlement officer. We have extensive experience helping clients request and manage CDP hearings at The W Tax Group.
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