Collection Due Process (CDP) Hearings: How to Stop an IRS Levy and Get Your Case Before an Independent Appeals Officer

DRAFT: UNDER ATTORNEY REVIEW. This guide is a working draft posted temporarily so that Thomas F. DiLullo & Associates, P.C. can review it. It has not been approved, may contain errors, and must not be relied on as legal or tax advice. For help with your situation, schedule a confidential case evaluation or call (201) 488-0070.

Pending review by Nick Kokis, Esq., former IRS District Counsel trial attorney · Draft dated October 2026

Key takeaways

• A Collection Due Process hearing is your legal right to have the IRS Independent Office of Appeals review a proposed levy or a filed tax lien before enforcement continues (IRC §§6320, 6330).

• The deadline is short and strict: generally 30 days from the date on the notice for levies. For liens, use the deadline date printed on Letter 3172.

• A timely request on Form 12153 generally stops levy action on the periods covered. It also keeps your right to have the U.S. Tax Court review the outcome.

• Miss the deadline and you can still ask for an equivalent hearing within one year, but you lose the levy protection and the Tax Court review.

• Most CDP hearings succeed by getting a workable collection alternative approved: a payment plan, an offer in compromise, or currently-not-collectible status.

Which IRS notices give you hearing rights?

Look for the words "Notice of Your Right to a Hearing" in the notice title. The most common ones:

• LT11 or Letter 1058, Final Notice of Intent to Levy and Notice of Your Right to a Hearing — What it means: The IRS can levy wages, bank accounts and other assets 30 days after the notice date; Hearing type: Levy CDP (IRC §6330)

• CP90, Final Notice – Notice of Intent to Levy and Notice of Your Right to a Hearing — What it means: Same as above (another version of the final notice); Hearing type: Levy CDP (IRC §6330)

• Letter 3172, Notice of Federal Tax Lien Filing and Your Right to a Hearing — What it means: The IRS has filed a public tax lien; Hearing type: Lien CDP (IRC §6320)

What is not a hearing notice: CP14, CP501, CP503 and CP504. CP504 is a serious final demand, and after it the IRS can take your state tax refund. But it doesn't start the CDP clock. The hearing notice comes later. See our pages on CP504, LT11, Letter 1058 and Letter 3172.

In a few situations the IRS can levy first and offer the hearing afterward: state tax refund levies, jeopardy levies, levies on federal contractors, and certain employment-tax levies. The hearing rights still apply. They just come after the levy.

What the IRS must do before it can levy

The law makes the IRS take several steps before it can seize property or garnish wages:

1. Assess the tax and send notice and demand for payment (IRC §6303).

2. Send a final notice of intent to levy at least 30 days before levying (IRC §6331(d)).

3. Offer a Collection Due Process hearing at least 30 days before the levy (IRC §6330(a)).

4. Give advance notice that it may contact third parties, such as employers, banks or customers (IRC §7602(c)).

Even after those steps, a levy is generally prohibited while any of these is pending:

• a timely CDP hearing and any Tax Court appeal from it (IRC §6330(e));

• an offer in compromise (IRC §6331(k)(1));

• an installment agreement request, or an agreement in effect (IRC §6331(k)(2));

• an innocent spouse claim (IRC §6015(e)(1)(B));

• a bankruptcy case, under the automatic stay.

The IRS also can't levy on your principal residence without approval from a federal district court (IRC §6334(e)(1)).

One of the questions in every CDP hearing is whether the IRS actually followed these rules (IRC §6330(c)(1)).

Deadlines: CDP hearing vs. equivalent hearing

• Levy deadline — CDP hearing (timely): 30 days from the date of the LT11, Letter 1058 or CP90; Equivalent hearing (late): 1 year from the date of the levy notice

• Lien deadline — CDP hearing (timely): 30 days after the 5-business-day period following the lien filing (the date is printed on Letter 3172); Equivalent hearing (late): 1 year after that 5-business-day period ends

• Stops levy action? — CDP hearing (timely): Yes, for the periods covered (IRC §6330(e)); Equivalent hearing (late): No. The IRS may levy, though Appeals may ask it to hold off

• Collection statute suspended? — CDP hearing (timely): Yes, while the hearing and any appeal are pending; Equivalent hearing (late): No

• Tax Court review? — CDP hearing (timely): Yes, petition within 30 days of the Notice of Determination; Equivalent hearing (late): Generally no. Appeals issues a "decision letter"

Send Form 12153 to the address on your notice by a method that gives you proof of mailing, such as certified mail. A properly postmarked request counts as filed on time (IRC §7502). Don't wait until day 29.

How to request a hearing: Form 12153

Form 12153, Request for a Collection Due Process or Equivalent Hearing, asks you to:

• identify the notice, the tax types and the periods;

• check whether you're contesting a levy, a lien, or both;

• check the collection alternatives you want considered: installment agreement, offer in compromise, "I cannot pay," or lien withdrawal, subordination or discharge;

• explain why you disagree with the collection action.

Make the request specific. Appeals generally considers only the issues you raise. Vague or frivolous requests ("taxes are voluntary," for example) are rejected, and frivolous submissions can draw a $5,000 penalty (IRC §6702). Pursuing frivolous positions in Tax Court risks a further penalty of up to $25,000 (IRC §6673).

What Appeals can decide

A settlement officer from the IRS Independent Office of Appeals handles the hearing. That officer can't have had prior involvement with the tax at issue (IRC §6330(b)(3)). Hearings are usually held by phone or correspondence, and in-person conferences are sometimes available. The settlement officer must:

1. Verify that the IRS met every legal and procedural requirement.

2. Consider the issues you raise, including:

3. Collection alternatives: a payment plan, an offer in compromise, currently-not-collectible status, or lien withdrawal, subordination or discharge;

4. spousal defenses, such as innocent spouse relief (see our innocent spouse guide);

5. appropriateness: whether the proposed levy or lien is reasonable given your circumstances.

6. Balance the government's need to collect efficiently against your legitimate concern that the action be no more intrusive than necessary (IRC §6330(c)(3)).

Can you dispute the amount itself? Only if you didn't receive a statutory notice of deficiency for that tax, or didn't otherwise have an earlier opportunity to dispute it (IRC §6330(c)(2)(B)). Many people never received the notice of deficiency, or the tax came from a penalty the Tax Court couldn't review earlier. For them, the CDP hearing may be the first real chance to contest the liability.

Get compliant before the hearing

Appeals generally won't approve a payment plan or an offer unless you are current. That means every required return is filed, and estimated tax payments or federal tax deposits are up to date for the current year. If you're behind, fix that first; it is often what decides the outcome. Bring a complete financial statement (Form 433-A, 433-F or 433-B) and its supporting documents.

After the hearing: Notice of Determination and the Tax Court

Appeals issues a Notice of Determination. If you disagree with it, you can petition the U.S. Tax Court within 30 days (IRC §6330(d)(1)).

• In Boechler, P.C. v. Commissioner (2022), the Supreme Court held that this 30-day deadline can be extended by equitable tolling in exceptional circumstances. Never plan around that. File on time. See our discussion of whether Tax Court filing deadlines are jurisdictional.

• The Tax Court reviews Appeals' collection decisions for abuse of discretion. It reviews challenges to the underlying liability de novo, where the law permits them.

• If the unpaid tax at issue is $50,000 or less, you can elect the Tax Court's simplified small case ("S case") procedure (IRC §7463(f)(2)).

Other routes when the deadline has passed

• Equivalent hearing (Form 12153, within one year), as described above.

• Collection Appeals Program (CAP) (Form 9423). CAP is faster and covers levies (before or after), liens, and rejected or terminated installment agreements. It offers no Tax Court review, and Appeals' decision is final.

• Levy release. The IRS must release a levy if, among other grounds, the levy is causing economic hardship (you can't meet basic, reasonable living expenses), you've entered an installment agreement, or the collection statute has expired (IRC §6343(a)).

• Banks must hold levied funds for 21 days before sending them to the IRS (IRC §6332(c)). That's a short window to get a bank levy released.

• A wage levy continues every pay period until it is released.

How we use CDP hearings

Even when the tax is clearly owed, a timely CDP request is often the most valuable step a taxpayer can take. It stops levy action and moves the case from collections to an independent Appeals officer, and the officer has to consider alternatives on the record. Our team includes a former IRS District Counsel trial attorney who has litigated these issues, along with CPAs who prepare the financial analysis Appeals relies on.

In a typical CDP case we:

• confirm the deadline and file Form 12153 with every viable issue preserved;

• bring missing returns and current-year payments into compliance;

• prepare the financial statement and propose the strongest alternative (often an offer in compromise or a payment plan);

• challenge the liability where the law allows it;

• petition the Tax Court when Appeals abuses its discretion.

Frequently asked questions

I got a CP504. Is that my last chance to request a hearing? No. CP504 isn't a hearing notice. Your Collection Due Process rights come with the LT11, Letter 1058 or CP90 that follows. That said, the IRS can take your state tax refund after a CP504, so respond right away.

The 30 days have passed. Can I still get a hearing? Usually yes: an equivalent hearing, if you request it within one year. Levy protection isn't automatic in an equivalent hearing, and you generally can't go to Tax Court afterward.

Will the IRS levy while my CDP hearing is pending? Generally no, for the tax periods covered by a timely request. There are exceptions, such as state refund levies and jeopardy situations. A pending CDP request doesn't remove a lien that has already been filed.

Can I propose an offer in compromise in the hearing? Yes. Collection alternatives are one of the main things the hearing exists to consider. The offer still has to meet the normal offer requirements, including the application fee and the required forms, unless you qualify for the low-income exception.

How long does a CDP hearing take? Usually a few months, and longer if an offer in compromise is under review. The collection statute is suspended during that time, so the IRS doesn't lose collection time because you asked for a hearing.

Can my spouse and I request one hearing? If you both received notices for a joint liability, you can request the hearing on one Form 12153 with both names and signatures. A spouse who didn't receive a notice has no CDP right for that notice.

Sources

• Internal Revenue Code §§6320, 6330, 6331(d) and (k), 6332(c), 6334(e), 6343, 6015(e), 7463(f), 7502, 7602(c), 6702, 6673

• Treasury Regulations §§301.6320-1 and 301.6330-1 (Q&A format regulations on lien and levy hearings)

• Internal Revenue Manual Part 8.22, Collection Due Process

• Boechler, P.C. v. Commissioner, 596 U.S. 199 (2022)

• IRS Form 12153 · Publication 1660, Collection Appeal Rights · Publication 594, The IRS Collection Process

Holding an LT11, Letter 1058 or Letter 3172? The 30 days start on the date printed on the notice. Schedule a confidential case evaluation or call (201) 488-0070 today.

This guide is general information, not legal advice for your situation. Reading it doesn't create an attorney-client relationship.

DRAFT: UNDER ATTORNEY REVIEW. This guide is a working draft posted temporarily so that Thomas F. DiLullo & Associates, P.C. can review it. It has not been approved, may contain errors, and must not be relied on as legal or tax advice. For help with your situation, schedule a confidential case evaluation or call (201) 488-0070.