Should collection due process hearings be recorded?

• Author: Smith, Annette B.

Collection due process (CDP) hearings, unlike many other administrative hearings, are not required to be, and often are not, recorded. Because the basis on which a taxpayer may seek review of a final determination relating to a CDP hearing is limited to the issues raised at the hearing, the lack of a full record of a CDP hearing can result in cases where a taxpayer effectively is unable to appeal resolution of issues properly raised at the hearing. In Keene, 121 T.C. 8 (2003), the Tax Court acknowledged that having a recording of a hearing was helpful to the court in determining which issues had been properly raised and held that a taxpayer was entitled to record a CDP hearing.

Procedural Requirements

In 1998, Congress added provisions to the Code relating to due process for liens and collections to allow taxpayers certain rights and privileges when interacting with the IRS. Under these provisions, the IRS must comply with certain requirements after filing a notice of lien in favor of the United States on all property of a delinquent taxpayer and before proceeding with a levy on the taxpayer's property.

After receiving a notice of the filing of a tax lien or a notice of intent to levy, a delinquent taxpayer may request an administrative hearing before the IRS Office of Appeals. The IRS conducts these hear-ings, commonly referred to as CDP hearings, in accordance with rules set forth in Secs. 6330( b) and (c), and the hearings are informal. As provided in Regs. Secs. 301.6320-1(d)(2), Q&A-D6, and 301.6330-1(d)(2), Q&A-D6, a CDP hearing "may, but is not required to, consist of a face-to-face meeting, one or more written or oral communications between an Appeals officer or employee and the taxpayer or the taxpayer's representative, or some combination thereof."

CDP Hearing Content

At the CDP hearing, the taxpayer may raise "any relevant issue relating to the unpaid tax or the proposed levy," according to Sec. 6330(c)(2)(A). This includes spousal defenses, challenges to the appropriateness of the collection action, and possible collection alternatives. In certain circumstances, the taxpayer also may raise challenges to the existence or amount of the underlying tax liability.

At the conclusion of the CDP hearing, the Appeals officer, taking into account certain criteria, must make a final determination as to whether and how to proceed with collection. If the taxpayer subsequently disagrees with the Appeals officer's final determination, the...