CDP procedures finalized.

• Author: Ely, Mark H.
• Position: Collection due-process hearings for taxpayers

Treasury has issued final regulations on taxpayers' rights to collection due-process (CDP) hearings as provided under the Revenue Reconciliation Act of 1998 in Secs. 6320 and 6330. Regulations provide the procedures for:

1. Notifying taxpayers when the IRS files a notice of Federal tax lien (NFTL);

2. Notifying taxpayers before the Service levies a tax;

3. Notifying taxpayers of their right to a CDP hearing for both of the above; and

4. Conducting CDP hearings and appealing the results.

The final regulations apply to any NFTL filed, or any levy occurring, after Jan. 8,1999.

Notice Procedures

The IRS should issue an NFTL within five business days after it files a lien. The Service must send pre-levy notices to taxpayers at least 30 days before the levy. Notices should include the statutory provisions and procedures on release of liens or relating to levy and sale of property, and should also include alternatives that may prevent further levies (such as an installment agreement).

The IRS must deliver an NFTL to taxpayers either by personal delivery (leaving the notice at the taxpayer's dwelling or usual place of business) or by certified or registered mail sent to the taxpayer's last-known address. An NFTL informs taxpayers of their right to request a CDP hearing.

A proper delivery starts the period within which a taxpayer must request a CDP hearing, even if the taxpayer does not receive the notice. If a taxpayer does not receive a notice and the IRS determines that it did not properly deliver the notice, it will provide the taxpayer with a substitute CDP notice and an opportunity to request a hearing. The validity and priority of an NFTL are not affected.

Requesting a CDP Hearing

Taxpayers must request a Sec. 6320 NFTL CDP hearing by the 30th day after the fifth business day within the period in which the IRS must give notice of filing. In case of a substitute notice, the taxpayer must make a request by the 30th day after the date of the substitute notice. Taxpayers must request a Sec. 6330 pre- or post-levy CDP hearing by the 30th day after the date of the CDP notice. Requests must be in writing (to resolve potential disputes over timeliness).

Form 12153, request for a Due Process Hearing, should be included with the notice the taxpayer uses to request a hearing. However, a written request in any form that includes the taxpayer's name, address and daytime telephone number, and is signed and dated by the taxpayer or authorized representative...