By Jon Call, EA — Enrolled Agent & NTPI Fellow • CLAW Tax Group
A Collection Due Process hearing — CDP — is a formal right granted to taxpayers when the IRS intends to take significant collection action against them. It gives you the opportunity to challenge that action before an independent IRS appeals officer before any seizure of property or income occurs.
CDP is one of the most valuable procedural rights in the tax code. It is also one of the most commonly misunderstood — and missed.
What Triggers CDP Rights
CDP rights are triggered by specific IRS notices. There are two:
Final Notice of Intent to Levy (Letter 1058 or LT11) — Sent when the IRS intends to levy your wages, bank account, or other assets. This is the primary CDP trigger for most taxpayers with unpaid balances.
Notice of Federal Tax Lien Filing (Letter 3172) — Sent when the IRS files a Notice of Federal Tax Lien. Filing a CDP request in response to a lien notice does not stop the lien, but it gives you the right to appeal it through the same CDP process.
When you receive either of these notices, the clock starts. You have 30 days from the date on the notice to request a CDP hearing.
The 30-Day Window
Thirty days is not a suggestion. If you miss it, you lose CDP rights for that notice — and with them, the right to take your case to Tax Court if you disagree with the appeals officer’s decision.
You may still be able to request an Equivalent Hearing after the 30-day window closes, but an equivalent hearing carries fewer protections. You cannot challenge the underlying liability in most cases, and you have no right to Tax Court review.
If you have received a Letter 1058 or LT11, the most important thing you can do is note the date on the notice and contact a representative immediately. The 30 days are calendar days, not business days.
What Happens at a CDP Hearing
A CDP hearing is not a courtroom proceeding. It is a conference with an IRS Settlement Officer in the Office of Appeals — a division that functions independently from the collection side of the IRS.
At the hearing, you can:
Propose a collection alternative. This is the most common use of CDP. You can propose an installment agreement, an Offer in Compromise, Currently Not Collectible status, or a request for release of levy based on hardship. The appeals officer evaluates whether the IRS’s proposed collection action is appropriate given the alternatives available.
Contest the underlying liability. Under certain circumstances, CDP is also the forum for challenging the amount the IRS says you owe. If you never had a prior opportunity to dispute the liability — for example, the balance came from a substitute for return the IRS filed on your behalf, or from an assessment you were never properly notified about — you can raise that dispute at the CDP hearing. This is a significant right. If you already received a notice of deficiency and had the opportunity to petition Tax Court at that time, you cannot re-litigate the liability at CDP. But when that prior opportunity did not exist, CDP may be your only remaining avenue to contest what you owe.
Request penalty abatement. The CDP hearing is also a forum for raising penalty relief — first-time abatement, reasonable cause, or other grounds for reducing or eliminating penalties that have accrued on the underlying liability. Penalty abatement does not eliminate the tax itself, but it can meaningfully reduce the total balance owed and change the resolution calculus.
Challenge IRS procedure. If the IRS failed to follow required procedures before issuing the notice — improper notice, failure to credit payments, misapplication of credits — that can be raised at the hearing.
Request lien withdrawal or subordination. In response to a lien notice, you can request that the IRS withdraw the lien, subordinate it to allow refinancing, or discharge it from specific property.
CDP and the CSED
Requesting a CDP hearing tolls the Collection Statute Expiration Date. The 10-year collection clock pauses from the date you request the hearing through the date the CDP process concludes, including any Tax Court review.
This is an important strategic consideration. If the CSED on a liability is close to expiring, requesting a CDP hearing — which can take months or longer to resolve — may extend the IRS’s collection window significantly. In those situations, the calculus of whether to request CDP versus letting the statute run needs to be evaluated carefully. Learn more about the CSED →
Tax Court After CDP
If you disagree with the appeals officer’s determination at a CDP hearing, you have the right to petition the United States Tax Court for review. The Tax Court will review whether the IRS abused its discretion in sustaining the collection action.
This right to Tax Court review is only available after a timely CDP hearing — not after an equivalent hearing. It is one of the key reasons that meeting the 30-day deadline matters.
Equivalent Hearing
If you miss the 30-day window, you can request an Equivalent Hearing within one year of the notice date. The process is similar — you meet with an appeals officer and can propose collection alternatives — but the protections are narrower:
- You cannot challenge the underlying tax liability in most cases
- You have no right to Tax Court review of the outcome
- The CSED is still tolled during an equivalent hearing
An equivalent hearing is better than nothing, but it is a significant step down from a timely CDP hearing.
Strategic Use of CDP
CDP is not simply a delay tactic. Used correctly, it is a path to the IRS Office of Appeals — an environment that is generally more receptive to negotiated resolution than the collection division.
For taxpayers who have been unable to get traction through normal IRS channels, a CDP hearing can reset the process and put the case in front of a fresh set of eyes with authority to accept alternatives the collection division rejected.
For taxpayers with strong collection alternative cases — a well-documented OIC, a clear hardship situation, or a liability the IRS calculated incorrectly — CDP is often the best vehicle for reaching resolution.
The decision to request a CDP hearing should not be made without understanding the CSED implications, the strength of any collection alternative being proposed, and the likelihood of a favorable outcome at appeals. It is a right worth using strategically, not reflexively.
What We Do
When a client receives a Final Notice of Intent to Levy, the first question is whether to request a CDP hearing and on what basis. We pull transcripts immediately, assess the CSED dates, evaluate the collection alternatives available, and make a recommendation before the 30-day window closes.
If CDP is the right move, we prepare the request, represent the client at the appeals conference, and — if necessary — petition Tax Court.
Call or text: (651) 323-2255
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CLAW Tax Group is a tax resolution firm based in White Bear Lake, Minnesota, serving clients in all 50 states. Affiliated with Wildes At Law.
References: IRC § 6320 (lien CDP rights); IRC § 6330 (levy CDP rights); IRM 8.22.2 (Collection Due Process)