Music. Hi, I'm Dennis Prager. I'm a former IRS trial attorney and a California state board-certified tax specialist. This is just one in a series of videos designed to give you answers to questions that my clients frequently ask. Today, I'd like to talk about a Collection Due Process hearing. A Collection Due Process hearing, also known as a CDP hearing, may be your last best chance to resolve a tax controversy with the IRS, short of tax litigation. Generally, the IRS must issue a notice of intent to levy and a right to request a hearing before it sends a levy. If you file a request for a CDP hearing within 30 days of the date of its mailing, the IRS may not serve a levy until you've had a chance for that hearing. At the hearing, you may ask for an installment agreement, an offer in compromise, or another collection alternative. You also may be asked to be treated as an innocent spouse, and if you have not already had an opportunity to do so, you can dispute the amount of your tax liability. The notice of intent to levy and right to request the hearing is generally sent by certified or registered mail, return receipt requested, to a taxpayer's last known address. As we explained in another one of our videos, if the notice is not sent to your last known address, it may not be valid, and therefore, the IRS would be prohibited from levying on your bank accounts or other assets. You can find this video about the last known address by typing that phrase, "last known address," in the search bar on our website. Instead of mailing the notice of intent to levy and right to request a hearing by certified or registered mail, the IRS can also...
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Collection due process hearing installment agreement Form: What You Should Know
It is the process of having the Taxpayer Advocate Service (TAS) review and potentially settle your tax debt. After the Notice of Federal Tax Lien or Levy was originally sent, the original notice and settlement agreement are sent to the taxpayer on line 10 or the TEST/TIF (transaction history/payment history) as part of a second notice. After an opportunity for the taxpayer to have a hearing, you should receive an answer on the IRS Response due date to your claim or a Notice of Federal Tax Lien or Levy. You'll receive a copy of the response and settlement agreement to your Claim or Statement. Depending upon the result when the Notice of Federal Tax Lien or Levy was originally sent, you are either required to appear for the hearing, or be served with a Notice of Federal Tax Lien or Levy. If you wish to go to trial with the taxpayer regarding a tax lien or levy, you are advised to have the taxpayer send a letter to the Service, prior to mailing of the Notice of Federal Tax Lien or Levy. When the Taxpayer Advocate Service (TAS) receives the Notice of Federal Tax Lien or Levy, they will review the Notice of Federal Tax Lien or Levy and, based upon the amount assessed, will send you a notice indicating whether you will go to trial and if you agree to proceed, you'll be ordered by the Service to attend the hearing, at which time you will be informed of the outcome. If you are required to attend and agree to appear, the Service will schedule an initial appearance at the TAS office, which will determine the appropriate date to have your Trial by Court, at which time you may be represented by an attorney. If you fail to appear for your Trial by Court or the Court finds you delinquent on a tax lien or levy, the Service can file a motion to transfer the lien and levy. The Trial by Court date depends upon the result of the initial hearing and is set by the TAS at the earliest convenience; and in some cases, the date is changed due to the date the Service receives the tax lien or levy or due to other reasons. If an answer is not received before the Trial by Court, you may want to contact one of your attorneys, or to consider whether it would be in your best interest to file for an extension of your TPA filing deadline. In the event the Government wins the Collection Due Process hearing, it must be remitted into the Treasury.
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