A Collection Due Process (CDP) hearing is a taxpayer’s right to appeal IRS collection actions, such as levies, garnishments, or liens, before they are enforced. Taxpayers can request a CDP hearing if they receive certain notices from the IRS, such as a Final Notice of Intent to Levy or a Notice of Federal Tax Lien.
The CDP hearing allows taxpayers to:
- Challenge the appropriateness of the IRS’s collection action.
- Propose alternatives, such as Installment Agreements or Offers in Compromise.
- Present evidence of financial hardship or dispute the tax liability.
Taxpayers must request a CDP hearing within 30 days of receiving the IRS notice by filing Form 12153. During the hearing, a neutral IRS appeals officer reviews the case and determines whether the IRS’s collection actions should proceed or if an alternative arrangement is possible.
A CDP hearing provides taxpayers with a critical opportunity to resolve their tax issues before the IRS takes more severe enforcement actions, such as seizing property or garnishing wages.