Offer in Compromise Tax Lien Tax Levy Wage Garnishment Tax Filing

IRS Tax Lien Help - Tax Lien Removal Services

Tax Liens can be subordinated to allow you to buy, sell or refinance real estate!
Tax Liens can be appealed before or after they are issued!
Tax Liens can be lifted when it is in the mutual benefit of you and the IRS!
A Tax Lien must be removed if it is premature or otherwise not in accordance with the administrative procedures of the IRS!
Tax Liens are removed when a tax liability is settled in an offer in compromise!
The IRS has a discretion to remove a lien when you enter into an Installment Agreement to pay your tax liability!
Tax Liens are removed when the statute of limitations on collections has expired!
The IRS can be sued for erroneous filing of a tax lien!
Every effort should be made to remove the tax lien because it is a serious impediment to your ability to obtain credit as needed and when needed. The tax lien, filed in public records, is also a collection action that can soon be followed by other collection actions such as "levy" and "seizure" of all personal assets (including your home), business assets, and garnishment of your wages.

Nevertheless, the tax lien may be appealed; it may be invalid; there are procedures to have the IRS lift the tax lien; and there are statutory circumstances in which the IRS is required to lift the tax lien.

Your tax lien is invalid if the notice of tax lien is not in writing and issued within 5 business days after the day of the filing. The notice must state the amount of unpaid tax, the right to appeal the lien during a 30-day period following the end of the 5-day notification period.

The tax lien must be based on a valid assessment. There are technical requirements to support a valid assessment.

The IRS can remove a lien: where an installment agreement has been approved; where the withdrawal would be in the best interest of the taxpayer, as determined by the National Taxpayer Advocate; and where it would be in the best interests of both the U.S. and the taxpayer (where it serves no useful purpose).

A tax lien must be removed when your tax liability is paid, eliminated by the ten-year statute of limitations, or settled in an Offer in Compromise. The IRS can be forced to accept an Offer in Compromise settlement based on what is "collectible" from you rather than on the basis of how much you owe (even if that settlement is nominal). Settlements are often "pennies on the dollar."

The IRS can also be forced to consider "hardship" issues in Offer in compromise cases. Once an Offer in compromise has been accepted, the IRS must remove the tax lien in 30 days.

LIENS

Notice of Lien Filing: Synopsis - Collection Due Process Hearing Notice and opportunity for Collection Due Process hearing upon filing of lien

The IRS is required to file a notice of federal tax lien (NFTL) in order to obtain priority over purchasers, holders of a security interest, mechanic's lienors, or judgment lien creditors (Code Sec. 6323(a)). The notice is generally filed in an office designated by the state in which the property subject to the lien is located (Code Sec. 6323(f)).

The IRS is required to provide a taxpayer with the opportunity to administratively appeal the lien by filing a formal request for a hearing with the IRS Appeals Office (Code Sec. 6320). The hearing is referred to as a Collection Due Process hearing (CDP hearing).

The IRS must notify a taxpayer within five business days after the notice of federal tax lien is filed that the taxpayer may request a CDP hearing. This notice is referred to as a Collection Due Process Hearing Notice (CDP Notice).

The taxpayer (whether residing inside or outside of the U.S.) has 30 days after the end of the fifth business day in which to submit a request for a CDP hearing (Code Sec. 6320(a)(3)(B); Reg. §301.6320-1(c), Q&A-C3 and Q&A-C5). The request must be in writing and include the reason or reasons why the taxpayer disagrees with the filing of the NFTL (Reg. §301.6320-1(c), Q&A-C2). Form 12153, Request for a Collection Due Process hearing, is provided with the CDP Notice and may be used for this purpose. Form 12153 may also be obtained by calling the IRS, toll free, at 1-800-829-3676 (Reg. §301.6320-1(c), Q&A-C1). Generally, the CDP hearing request is filed with the IRS office that issued the CDP Notice. If that office is unknown, the request is sent to the compliance area director serving the compliance area in which the taxpayer resides or has its principal place of business. Taxpayers without a residence or principal place of business in the U.S. must send the request to the compliance director, Philadelphia Submission Processing Center (Reg. §301.6320-1(c), Q&A-C6).

The timeliness of a CDP hearing request is determined under the timely mailing as timely filing rules of Code Sec. 7502 and the weekend and holiday rules of Code Sec. 7503 (Reg. §301.6320-1(c), Q&A-C4).

Issues that may be raised at CDP hearing. In general, the taxpayer may raise any relevant issue related to the unpaid tax at the CDP hearing. For example, the taxpayer may assert innocent spouse status, challenge the appropriateness of the lien, request collection alternatives, such as installment payments and offers in compromise, and suggest which assets should be used to satisfy the tax liability. The existence or amount of the tax liability, however, may only be challenged if the taxpayer did not receive a timely statutory notice of deficiency or otherwise have the opportunity to dispute the tax liability.

Judicial review of hearing results. The determination of the Appeals Office is subject to judicial review if the taxpayer files a timely appeal (Code Sec. 6320(c); Code Sec. 6330(d)). This determination is referred to as the Notice of Determination. The CDP hearing must be conducted by an impartial IRS officer (Code Sec. 6320(b)(3)).

Suspension of certain limitation periods. The period of limitations relating to collection after assessment (Code Sec. 6502), criminal prosecutions (Code Sec. 6531), and suits (Code Sec. 6532) are suspended until the determination of the Appeals Office becomes final by expiration of the time for seeking review or reconsideration before the appropriate court. These limitation periods are suspended upon receipt of a taxpayer's written request for a CDP hearing (Reg. §301.6320-1(c), Q&A-C2)..

Equivalent hearing. If the CDP hearing request is not timely filed, the taxpayer may request an "equivalent hearing." Although Appeals will consider the same issues that may be raised in a CDP hearing, important advantages of a CDP hearing are lost. Specifically, limitation periods are not suspended, collection action is not necessarily suspended, and the decision of Appeals is not subject to court review (Reg. §301.6320-1(c), Q&A-C7).

Additional taxpayer alternatives to CDP hearing. A taxpayer may attempt to resolve concerns regarding the filing of a notice of federal tax lien before or after requesting a CDP hearing. The taxpayer should contact the office that is collecting the tax or that has filed the NFTL. If the situation is resolved after filing a request for a CDP hearing, the taxpayer may withdraw the request for the hearing in writing. The 30-day period in which a taxpayer may file a request for a CDP hearing is not suspended or extended while a taxpayer is engaged in an informal attempt to settle the dispute (Reg. §301.6320-1(c, Q&A-C9).

Coordination with Code Sec. 6330 CDP hearings. To the extent practicable, a CDP hearing requested under Code Sec. 6320 will be held in conjunction with any CDP hearing that the taxpayer requests under Code Sec. 6330 (Notice and Opportunity for Hearing Before Levy). Code Sec. 6330 provides procedural rules that apply before the IRS may levy upon a taxpayer's property, including a right to a hearing before Appeals and judicial review of the hearing determination.

A taxpayer may raise issues regarding spousal defenses, the appropriateness of the NFTL filing, and offers of collection alternatives at a Code Sec. 6320 CDP hearing even though the taxpayer did not take advantage of a prior opportunity to request a Code Sec. 6330 CDP hearing that would have covered the same tax and tax period. However, the taxpayer may not challenge the tax liability under this circumstance (Reg. §301.6320-1(e)(3), Q&A-E7).

Notice of Lien Filing: Taxpayers affected

A Collection Due Process Hearing Notice must be provided to the person named in a notice of federal tax lien. The notice provides the taxpayer with the opportunity to administratively appeal the lien by filing a formal request for a hearing with the IRS Appeals Office.

Notice of Lien Filing: Collection Due Process Hearing Notice

A Collection Due Process Hearing Notice (CDP Notice) must be provided in a letter given in person to the taxpayer subject to a federal tax lien, left at the dwelling or usual place of business of the taxpayer, or sent by certified or registered mail to the taxpayer's last known address not more than five business days after a notice of federal tax lien (NFTL) is filed (Code Sec. 6320(a)(1); Code Sec. 6320(a)(2); Reg. §301.6320-1(a)(1); Reg. §301.6320-1(a)(2), Q&A-A9). If one of these delivery methods is used, it is not necessary that the taxpayer actually receive or accept the CDP Notice (Reg. §301.6320-1(a)(2), Q&A-A11). The 30-day period in which the taxpayer must file a request for a CDP hearing will begin to run and, if the request is not timely filed, the taxpayer's right to the CDP hearing is lost.

However, the taxpayer may request an "equivalent hearing." An equivalent hearing may consider the same issues that may be raised at a CDP hearing but limitation periods will not be suspended, collection activities may continue, and the decision of the equivalent hearing may not be appealed to a court.

IRS failure to properly provide CDP Notice. If a taxpayer does not receive the CDP Notice because the IRS did not use one of the prescribed delivery methods, the IRS must provide the taxpayer with a Substitute CDP Notice and an opportunity to request a CDP hearing. The validity or priority of the related NFTL, however, is not affected by the improper delivery of an original CDP Notice (Reg. §301.6320-1(a)(2), Q&A-A12). The CDP hearing with respect to a substitute CDP Notice must be requested in writing prior to the end of the 30-day period commencing the day after the date of the substitute CDP Notice (Reg. §301.6320-1(c)(2), Q&A-C8).

Content of CDP Notice. The CDP Notice must state in simple and nontechnical terms:

(1) the amount of unpaid tax;

(2) the right to request a CDP hearing with the IRS Appeals Office within 30 days;

(3) the administrative appeals available to the taxpayer with respect to the NFTL and the procedures relating to such appeals; and

(4) the statutory provisions and procedures relating to the release of liens on property (Reg. §301.6320-1(a)(2), Q&A-A10).

A Form 12153, Request for Due Process Hearing, which may be used by the taxpayer to request a CDP hearing with the IRS Appeals Office, is generally included with a CDP Notice.

The CDP Notice will specify each tax and tax period listed in the notice of federal tax lien if the notice covers more than one tax period (Reg. §301.6320-1(a)(2), Q&A-A3).

CDP Notice provided only to taxpayer owing tax. The CDP Notice is provided only to the taxpayer named in the NFTL who is liable to pay the tax due (Code Sec. 6320(a)(1); Reg. §301.6320-1(a)(2), Q&A-A1). Thus, for example, a nominee of a taxpayer or a person who holds property for a taxpayer is not entitled to a CDP Notice even though that person is named on the lien (Reg. §301.6320-1(a)(2), Q&A-A7).

Circumstances under which CDP Notice is provided. A CDP Notice will be provided for each filing of a NFTL after January 19, 1999, at any location. The CDP Notice is required even if the IRS previously filed a notice of lien that covers the same tax period or periods (Reg. §301.6320-1(a)(2), Q&A-A4 and Q&A-5). For example, a CDP Notice will be provided for a NFTL filed on or after January 19, 1999, for a tax period or periods for which a NFTL was filed prior to that date.

Although a taxpayer will generally receive a CDP Notice for each NFTL filed on or after January 19, 1999, a taxpayer is entitled to only one CDP hearing if an earlier NFTL that was filed on or after January 19, 1999, covers the same tax and tax period (Code Sec. 6320(b)(2); Reg. §301.6320-1(b)(1), Q&A-B4). The hearing must be requested within the requisite 30-day period following the first post-January 18, 1999, NFTL and CDP Notice (Reg. §301.6320-1(b)(1), Q&A-B1). If a timely request for a CDP hearing is not made, the taxpayer may request an "equivalent hearing". A taxpayer may request a CDP hearing where a NFTL for a tax and tax period is filed on or after January 19, 1999, and a NFTL was filed prior to that date in another recording office (Reg. §301.6320-1(b)(1), Q&A-B2).

A CDP Notice is not provided if the IRS is refiling a NFTL. This is so even if the first NFTL was filed prior to January 19, 1999, and the second, refiled NFTL, was filed on or after January 19, 1999. Although a CDP hearing is not available with respect to the refiled lien, the taxpayer may seek reconsideration by the IRS office that is collecting the tax or filing the NFTL, an administrative hearing before the IRS Appeals Office, or assistance from the National Taxpayer Advocate (Reg. §301.6320-1(a)(2), Q&A-A6).

Notice of Lien Filing: Collection Due Process hearing procedures

A CDP hearing is held by the Internal Revenue Service Office of Appeals (Appeals) (Code Sec. 6320(b)(1)). The hearing must be conducted by an employee or officer who has no prior involvement with the unpaid tax unless the taxpayer waives this requirement in writing (Code Sec. 6320(a)(3); Reg. §301.6320-1(d)(1); Reg. §301.6320-1(d)(2), Q&A-D5). Prior involvement includes participation or involvement in an Appeals hearing (other than a Code Sec. 6320 Collection Due Process (CDP) hearing or Code Sec. 6330 pre-levy CDP hearing) that the taxpayer may have had with respect to the tax and tax period or periods shown on the notice of federal tax lien (NFTL) (Reg. §301.6320-1(d)(2), Q&A-D4).

CDP hearings are informal and are not required to be held face-to-face. The taxpayer has no right to subpoena and examine witnesses, and, according to the regulations, no transcripts or recordings of any meeting or conversation between an Appeals officer or employee and the taxpayer or the taxpayer's representative is required (Reg. §301.6320-1(d)(2), Q&A-D6). However, at least one District Court has held that informality did not completely obviate the need for the Appeals officer to compile a hearing record of some sort (Mesa Oil, Inc., DC Colo., 2001-1 USTC ¶50,130 (Nonacq.)).

One CDP hearing permitted. A taxpayer is entitled to only one CDP hearing for a tax and tax period set forth in a NFTL with respect to the first filing of a NFTL on or after January 19, 1999 (Reg. §301.6320-1(d)). A taxpayer, however, may be entitled to more than one CDP hearing with respect to a tax period if different types of taxes are involved (e.g., an income tax liability and an employment tax liability). A second CDP hearing for the same tax period may also be allowed where the amount of tax has changed as a result of an additional assessment or an additional accuracy-related or filing delinquency penalty has been assessed. The taxpayer is not entitled to another CDP hearing if the additional assessment represents accruals of interest or accruals of penalties (Reg. §301.6320-1(d)(2), Q&A-D1).

To the extent practicable, a hearing with respect to one tax period shown on an NFTL will be combined with all other hearings to which the taxpayer may be entitled with respect to other tax periods shown on the same NFTL (Reg. §301.6320-1(d)(2), Q&A-D2).

Location of CDP hearing. Generally, the CDP hearing is conducted in the IRS Appeals Office closest to the taxpayer's residence. .

Matters considered at CDP hearing. The following items are considered by Appeals at the CDP hearing:

(1) the validity, sufficiency, and timeliness of the CDP Notice and any request for a CDP hearing made by the taxpayer;

(2) any appropriate issue relating to the unpaid tax liability raised by the taxpayer;

(3) appropriate spousal defenses raised by the taxpayer;

(4) challenges made by the taxpayer to the appropriateness of the NFTL;

(5) any offers by the taxpayer for collection alternatives; and

(6) whether the continued existence of the NFTL represents a balance between the need for the efficient collection of taxes and the legitimate concern of the taxpayer that any collection be no more intrusive than necessary (Code Sec. 6320(c); Code Sec. 6330(c); Reg. §301.6320-1(e)(1)).

In addition, the hearing officer is required to obtain verification from the IRS that the requirements of any applicable law or administrative procedure for the filing of the NFTL have been met (Code Sec. 6320(c); Code Sec. 6330(c)(1); Reg. §301.6320-1(e)(3), Q&A-E1).

A taxpayer may waive, in writing, Appeal's consideration of matters it would otherwise consider in making its determination. Generally, this will occur with respect to issues that the taxpayer is able to resolve with the IRS office that collects the tax or files the NFTL. The taxpayer may also waive, in writing, its request that Appeals conduct a CDP hearing (Reg. §301.6320-1(e)(3), Q&A-E8).

Challenges to tax liability. A taxpayer may challenge the existence or amount of the tax liability specified in the CDP Notice only if the taxpayer did not (a) receive a statutory notice of deficiency or did not receive such notice in time to petition the Tax Court for a redetermination of the deficiency or (b) otherwise have an opportunity to dispute the tax liability.

A taxpayer has had the opportunity to dispute the tax liability if previously offered a conference with Appeals either before or after the assessment of the liability (Code Sec. 6320(c); Code Sec. 6330(c)(2)(B); Reg. §301.6320-1(e)(3), Q&A-E2). A taxpayer who previously received a Code Sec. 6330 CDP pre-levy Notice covering the same tax and tax period and did not request a CDP pre-levy hearing had the opportunity to dispute the tax liability and may not raise that issue at a later Code Sec. 6320 CDP hearing (Reg. §301.6320-1(e)(3), Q&A-E7).

Example:

The IRS properly assesses a trust fund recovery penalty against Bill Brown. If Brown is offered and declines the opportunity for a conference at which the liability may be disputed, he may not challenge the existence or amount of the tax in a subsequent CDP hearing.

Spousal defenses. A spousal defense may be raised in a CDP hearing provided that the defense was not raised and considered in a prior administrative or judicial proceeding that has become final (Reg. §301.6320-1(e)(3), Q&A-E4 and Q&A-E5). The taxpayer must raise spousal defenses under Code Sec. 6015 in writing. Code Sec. 6015 spousal defenses are governed by the terms of Code Sec. 6015 and its regulations and procedures (Reg. §301.6320-1(e)(2))..

Collection alternatives. The appeals officer will consider collection alternatives offered by the taxpayer in making the CDP hearing determination. Among possible collection alternatives that a taxpayer may offer is the withdrawal of the NFTL in order to facilitate the collection of the outstanding tax, an installment agreement, an offer-in-compromise, the posting of a bond, or the substitution of other assets for the property subject to the lien (Reg. §301.6320-1(e)(3), Q&A-E6).

of Lien Filing: Notice of Determination

Appeals will issue its findings with respect to a Code Sec. 6320 Collection Due Process hearing in a Notice of Determination. There is no deadline for issuing the Notice of Determination. The regulations, however, require the appeals officer to conduct the hearing "as expeditiously as possible" (Reg. §301.6320-1(e)(3), Q&A-E9). A taxpayer has 30 days after the date the Notice of Determination is issued in which to seek judicial review from a court that has jurisdiction over the type of tax involved (Reg. §301.6320-1(e)(3), Q&A-E10). For income taxes, this is the Tax Court.

A dated Notice of Determination, which sets forth findings and decisions, will be sent by certified or registered mail to the taxpayer (Reg. §301.6320-1(e)(3), Q&A-E8).

Contents of Notice of Determination. The dated Notice of Determination is required to:

(1) state whether the IRS met the requirements of any applicable law or administrative procedure;

(2) decide any allowable issue raised by the taxpayer at the hearing (e.g., challenges to the tax liability, spousal defenses, the appropriateness of the notice of federal tax lien (NFTL) filing, and collection alternatives);

(3) decide whether the NFTL is required for the efficient collection of taxes in light of a taxpayer's legitimate concern that the collection action be no more intrusive than necessary;

(4) set forth any agreements reached with the taxpayer, any relief given to the taxpayer, and any actions that the taxpayer or IRS are required to take; and

(5) advise the taxpayer that judicial review to the Tax Court or a U.S. district court must be sought within 30 days after the date of the Notice of Determination (Reg. §301.6320-1(e)(3), Q&A-E8).

Notice of Lien Filing: Judicial review of Notice of Determination

A taxpayer may seek judicial review of a finding contained in a Notice of Determination issued by the IRS Appeals Office. The appeal must be filed within 30 days after the date appearing on the Notice of Determination (Reg. §301.6320-1(f)(1)). However, if the taxpayer is only appealing the denial of innocent spouse relief under Code Sec. 6015(b) or Code Sec. 6015(c), the appeal may be filed with the Tax Court within 90 days of the determination as provided by Code Sec. 6015(e). Other issues may not be considered when an appeal is not filed within the 30-day period (Reg. §301.6320-1(f)(2), Q&A-F2).

The regulations provide that a taxpayer may only seek review of an issue that was raised in the Code Sec. 6320 Collection Due Process (CDP) hearing (Reg. §301.6320-1(f)(2), Q&A-F5).

Court to which appeal filed. The appeal is filed with the Tax Court if that court has jurisdiction over the type of tax specified in the CDP Notice (e.g., income, estate, and excise taxes). The Tax Court has jurisdiction over innocent spouse relief (except in the context of a refund suit) (Code Sec. 6015(e)). Otherwise the appeal is filed with the appropriate U.S. district court (e.g., employment taxes) (Reg. §301.6320-1(f)(2), Q&A-F3).

Appeal filed in wrong court. If a taxpayer files the appeal with the wrong court, it has an additional 30 days after that court's determination to file with the proper court. The regulations provide for the additional 30 days regardless of the reason that the court initially chosen is incorrect. For example, if the case is dismissed for lack of jurisdiction or venue, the taxpayer may file with the proper court within 30 days (Reg. §301.6320-1(f)(2), Q&A-F4).

Review standard applied by court. The regulations do not address the standard to be applied by a court in reviewing the findings of a Notice of Determination. However, the Conference Agreement to the IRS Restructuring and Reform Act of 1998 (P.L. 105-206) addresses this issue in the context of a Notice of Determination issued in connection with a pre-levy Collection Due Process hearing under Code Sec. 6330.

The Conference Agreement to P.L. 105-206 provides for a de novo review where the amount of the taxpayer's tax liability is at issue. All other issues are reviewed using an abuse of discretion standard. Presumably, these review standards apply equally to the review of a Code Sec. 6320 Notice of Determination.

Notice of Lien Filing: Tolling of limitation periods during Collection Due Process hearing

The following periods of limitations are suspended for the period during which the CDP hearing and any judicial appeal are pending:

(1) Code Sec. 6502 (relating to the 10-year statute of limitations for the collection of taxes after assessment);

(2) Code Sec. 6531 (relating to the 3- and 6-year limitations period on the institution of a criminal prosecution under an internal revenue law); and

(3) Code Sec. 6532 (relating to 2-year limitations period for taxpayer refund suits) (Code Sec. 6320(a)(4); Code Sec. 6330(e); Reg. §301.6320-1(g)(1)).

The regulations provide that the suspension begins on the date the IRS receives the taxpayer's written request for a Collection Due Process (CDP) hearing and continues until the IRS receives a written withdrawal of the request for the CDP hearing or the determination of the CDP hearing becomes final by reason of the expiration of the time for seeking judicial review or reconsideration (Reg. §301.6320-1(g)(2), Q&A-G1).

The suspended periods of limitation will not expire before the 90th day after the date on which the IRS receives the taxpayer's written withdrawal of the request for a CDP hearing or there is a final determination with respect to the hearing (Code Sec. 6320(a)(4); Code Sec. 6330(e); Reg. §301.6320-1(g)(1)).

The time for seeking judicial review generally expires 30 days after the date of the Notice of Determination.

Example (1):

The IRS assessed a tax liability against John James in 1995. The 10-year limitations period on the collection of James' tax liability (Code Sec. 6502) is scheduled to expire after August 1, 2005. A notice of federal tax lien is filed on certain land owned by James on May 1, 2004, and the IRS sends a Code Sec. 6320 Collection Due Process Hearing Notice (CDP Notice) to James within the required 5-business day period. The IRS receives a request to conduct a CDP hearing from James on May 15, 2004. The hearing is conducted and the Hearing Determination Letter is dated June 15, 2004. Assuming that James does not request judicial review within 30 days after the June 15, 2004, Determination Letter date, the Code Sec. 6502 statute of limitations is suspended from May 15, 2004 (the date of the IRS's receipt of the hearing request), until July 15, 2004 (expiration of time for seeking judicial review). The August 1, 2005, expiration date is extended an additional 60 days (i.e., the period from May 15, 2004, through July 15, 2004) and will expire after September 30, 2005.

Example (2):

Assume the same facts as in Example (1), above, except that the limitations period is scheduled to expire after August 1, 2004. The statute of limitations would normally be extended 60 days, as illustrated in the previous example, through September 30, 2004. However, the limitations period may not expire before the 90th day after the date of the final determination with respect to the CDP hearing. The final determination date is July 15 --the date that the time for seeking judicial review expired. The statute of limitation is therefore extended through October 13, 2004 (90 days after July 15, 2004).

The suspension only applies to taxes and the tax period or periods to which the CDP Notice relates. Additionally, the IRS may file notices of federal tax liens (NFTLs) for tax periods or taxes not covered by the CDP Notice, may file at other recording offices NFTLs for the same tax and tax period stated in the CDP Notice, and may take other non-levy collection actions (Reg. §301.6320-1(g)(2), Q&A-G3).

These periods of limitation are not suspended if a taxpayer fails to file a timely CDP hearing. Although the IRS will conduct an equivalent hearing in such a case, the equivalent hearing does not toll these periods of limitation..

Notice of Lien Filing: Jurisdiction of Appeals retained following Notice of Determination

The IRS Appeals Office (Appeals) retains jurisdiction over its Collection Due Process (CDP) hearing determination, including any additional administrative hearing requested by a taxpayer regarding the notice of federal tax lien and any collection actions taken or proposed with respect to the determination (Code Sec. 6320(c); Code Sec. 6320(d)(2); Reg. §301.6320-1(h)(1)).

The Notice of Determination may be changed if there is a change in the taxpayer's circumstances. Once a taxpayer has exhausted all other remedies, Appeals retains jurisdiction to consider whether the taxpayer's change in circumstances warrants a change to its earlier determination (Code Sec. 6320(c); Code Sec. 6320(d)(2); Reg. §301.6320-1(h)(1)).

No limitation periods are suspended while Appeals considers any matters raised by the taxpayer pursuant to the retained jurisdiction of Appeals (Reg. §301.6320-1(h)(2), Q&A-H1). Decisions made pursuant to retained jurisdiction are not appealable to the Tax Court or a District Court (Reg. §301.6320-1(h)(2), Q&A-H2).

Notice of Lien Filing: Equivalent hearings if Collection Due Process hearing not timely requested

A taxpayer who fails to request a Collection Due Process (CDP) hearing within the requisite 30-day period is not entitled to a CDP hearing. However, such a taxpayer may request an administrative hearing with the IRS Appeals Office (Appeals), which is referred to as an "equivalent hearing." Appeals will consider the same issues that it would have considered at a CDP hearing and follow the same procedures in arriving at its decision. The decision of Appeals in an equivalent hearing is issued in the form of a written Decision Letter. The written decision in a CDP hearing is referred to as a Notice of Determination (Reg. §301.6320-1(i)).

A Decision Letter will generally contain the same information as a Notice of Determination.

Although the same issues are considered at an equivalent hearing, an equivalent hearing has some significant disadvantages when compared to a CDP hearing.

Specifically, limitation periods are not suspended during the equivalent hearing and the Decision Letter is not appealable to the Tax Court or to a U.S. District Court. However, if the decision relates to the denial of innocent spouse relief under Code Sec. 6015(b) or Code Sec. 6015(c), review may be sought in the Tax Court within 90 days of the determination of Appeals, as provided by Code Sec. 6015(e); (Reg. §301.6320-1(i), Q&A-I5).

Finally, collection action is not automatically suspended during the period of the equivalent hearing. Appeals may request the IRS office responsible for collecting the taxes to suspend some or all collection action if appropriate or necessary under the circumstances (Reg. §301.6320-1(i).

INTERNAL REVENUE CODE – SECTION 6330 - NOTICE AND OPPORTUNITY FOR HEARING UPON FILING OF NOTICE OF LIEN

6320(a) REQUIREMENT OF NOTICE. --

6320(a)(1) IN GENERAL. --The Secretary shall notify in writing the person described in section 6321 of the filing of a notice of lien under section 6323.

6320(a)(2) TIME AND METHOD FOR NOTICE. --The notice required under paragraph (1) shall be --

6320(a)(2)(A) given in person;

6320(a)(2)(B) left at the dwelling or usual place of business of such person; or

6320(a)(2)(C) sent by certified or registered mail to such person's last known address,

not more than 5 business days after the day of the filing of the notice of lien.

6320(a)(3) INFORMATION INCLUDED WITH NOTICE. --The notice required under paragraph (1) shall include in simple and nontechnical terms --

6320(a)(3)(A) the amount of unpaid tax;

6320(a)(3)(B) the right of the person to request a hearing during the 30-day period beginning on the day after the 5-day period described in paragraph (2);

6320(a)(3)(C) the administrative appeals available to the taxpayer with respect to such lien and the procedures relating to such appeals; and

6320(a)(3)(D) the provisions of this title and procedures relating to the release of liens on property.

6320(b) RIGHT TO FAIR HEARING. --

6320(b)(1) IN GENERAL. --If the person requests a hearing under subsection (a)(3)(B), such hearing shall be held by the Internal Revenue Service Office of Appeals.

6320(b)(2) ONE HEARING PER PERIOD. --A person shall be entitled to only one hearing under this section with respect to the taxable period to which the unpaid tax specified in subsection (a)(3)(A) relates.

6320(b)(3) IMPARTIAL OFFICER. --The hearing under this subsection shall be conducted by an officer or employee who has had no prior involvement with respect to the unpaid tax specified in subsection (a)(3)(A) before the first hearing under this section or section 6330. A taxpayer may waive the requirement of this paragraph.

6320(b)(4) COORDINATION WITH SECTION 6330. --To the extent practicable, a hearing under this section shall be held in conjunction with a hearing under section 6330.

6320(c) CONDUCT OF HEARING; REVIEW; SUSPENSIONS. --For purposes of this section, subsections (c), (d) (other than paragraph (2)(B) thereof), and (e) of section 6330 shall apply.

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REGULATIONS: §301.6320-1Notice and opportunity for hearing upon filing of notice of federal tax lien

(a) Notification

(1) In general. --For a notice of Federal tax lien (NFTL) filed on or after January 19, 1999, the Commissioner, or his or her delegate (the Commissioner), will prescribe procedures to notify the person described in section 6321 of the filing of a NFTL not more than five business days after the date of any such filing. The Collection Due Process Hearing Notice (CDP Notice) and other notices given under section 6320 must be given in person, left at the dwelling or usual place of business of such person, or sent by certified or registered mail to such person's last known address, not more than five business days after the day the NFTL was filed. For further guidance regarding the definition of last known address, see §301.6212-2.

(2) Questions and answers. --The questions and answers illustrate the provisions of this paragraph (a) as follows:

Q-A1. Who is the person entitled to notice under section 6320?

A-A1. Under section 6320(a)(1), notification of the filing of a NFTL on or after January 19, 1999, is required to be given only to the person described in section 6321 who is named on the NFTL that is filed. The person described in section 6321 is the person liable to pay the tax due after notice and demand who refuses or neglects to pay the tax due (hereinafter, referred to as the taxpayer).

Q-A2. When will the Internal Revenue Service (IRS) provide the notice required under section 6320?

A-A2. The IRS will provide this notice within five business days after the filing of the NFTL.

Q-A3. Will the IRS give notification to the taxpayer for each tax period listed in a NFTL filed on or after January 19, 1999?

A-A3. Yes. A NFTL can be filed for more than one tax period. The notification of the filing of a NFTL will specify each unpaid tax and tax period listed in the NFTL.

Q-A4. Will the IRS give notification to the taxpayer of any filing of a NFTL for the same tax period or periods at another place of filing?

A-A4. Yes. The IRS will notify a taxpayer when a NFTL is filed on or after January 19, 1999, for a tax period or periods at any recording office.

Q-A5. Will the IRS give notification to the taxpayer if a NFTL is filed on or after January 19, 1999, for a tax period or periods for which a NFTL was filed in another recording office prior to that date?

A-A5. Yes. The IRS will notify a taxpayer when each NFTL is filed on or after January 19, 1999, for a tax period or periods at any recording office.

Q-A6. Will the IRS give notification to the taxpayer when a NFTL is refiled on or after January 19, 1999?

A-A6. No. Section 6320(a)(1) does not require the IRS to notify the taxpayer of the refiling of a NFTL. A taxpayer may, however, seek reconsideration by the IRS office that is collecting the tax or refiling the NFTL, an administrative hearing before the IRS Office of Appeals (Appeals), or assistance from the National Taxpayer Advocate.

Q-A7. Will the IRS give notification to a known nominee of, or a person holding property of, the taxpayer of the filing of the NFTL?

A-A7. No. Such person is not the person described in section 6321 and, therefore, is not entitled to notice, but such persons have other remedies. See A-B5 of paragraph (b)(2) of this section.

Q-A8. Will the IRS give notification to the taxpayer when a subsequent NFTL is filed for the same period or periods?

A-A8. Yes. If the IRS files an additional NFTL with respect to the same tax period or periods for which an original NFTL was filed, the IRS will notify the taxpayer when the subsequent NFTL is filed. Not all such notices will, however, give rise to a right to a CDP hearing (see paragraph (b) of this section).

Q-A9. How will notification under section 6320 be accomplished?

A-A9. The IRS will notify the taxpayer by letter. Included with this letter will be the additional information the IRS is required to provide taxpayers as well as, when appropriate, a Form 12153, Request for a Due Process Hearing. The IRS may effect delivery of the letter (and accompanying materials) in one of three ways: by delivering the notice personally to the taxpayer; by leaving the notice at the taxpayer's dwelling or usual place of business; or by mailing the notice to the taxpayer at his last known address by certified or registered mail.

Q-A10. What must a CDP Notice given under section 6320 include?

A-A10. These notices must include, in simple and nontechnical terms:

(i) The amount of the unpaid tax.

(ii) A statement concerning the taxpayer's right to request a CDP hearing during the 30-day period that commences the day after the end of the five business day period within which the IRS is required to provide the taxpayer with notice of the filing of the NFTL.

(iii) The administrative appeals available to the taxpayer with respect to the NFTL and the procedures relating to such appeals.

(iv) The statutory provisions and the procedures relating to the release of liens on property.

Q-A11. What are the consequences if the taxpayer does not receive or accept a CDP Notice that is properly left at the taxpayer's dwelling or usual place of business, or sent by certified or registered mail to the taxpayer's last known address?

A-A11. A CDP Notice properly sent by certified or registered mail to the taxpayer's last known address or left at the taxpayer's dwelling or usual place of business is sufficient to start the 30-day period, commencing the day after the end of the five business day notification period, within which the taxpayer may request a CDP hearing. Actual receipt is not a prerequisite to the validity of the CDP Notice.

Q-A12. What if the taxpayer does not receive the CDP Notice because the IRS did not send that notice by certified or registered mail to the taxpayer's last known address, or failed to leave it at the dwelling or usual place of business of the taxpayer, and the taxpayer fails to request a CDP hearing with Appeals within the 30-day period commencing the day after the end of the five business day notification period?

A-A12. A NFTL becomes effective upon filing. The validity and priority of a NFTL is not conditioned on notification to the taxpayer pursuant to section 6320. Therefore, the failure to notify the taxpayer concerning the filing of a NFTL does not affect the validity or priority of the NFTL. When the IRS determines that it failed properly to provide a taxpayer with a CDP Notice, it will promptly provide the taxpayer with a substitute CDP Notice and provide the taxpayer with an opportunity to request a CDP hearing. Substitute CDP Notices are discussed in Q & A-B3 of paragraph (b)(2) and Q & A-C8 of paragraph (c)(2) of this section.

(3) Examples. --The following examples illustrate the principles of this paragraph (a):

Example 1. H and W are jointly and severally liable with respect to a jointly filed income tax return for 1996. IRS files a NFTL with respect to H and W in County X on January 26, 1999. This is the first NFTL filed on or after January 19, 1999, for their 1996 liability. H and W will each be notified of the filing of the NFTL.

Example 2. Employment taxes for 1997 are assessed against ABC Corporation. A NFTL is filed against ABC Corporation for the 1997 liability in County X on June 5, 1998. A NFTL is filed against ABC Corporation for the 1997 liability in County Y on June 17, 1999. The IRS will notify the ABC Corporation with respect to the filing of the NFTL in County Y.

Example 3. Federal income tax liability for 1997 is assessed against individual D. D buys an asset and puts it in individual E's name. A NFTL is filed against D in County X on June 5, 1999, for D's federal income tax liability for 1997. On June 17, 1999, a NFTL for the same tax liability is filed in County Y against E, as nominee of D. The IRS will notify D of the filing of the NFTL in both County X and County Y. The IRS will not notify E of the NFTL filed in County X. The IRS is not required to notify E of the NFTL filed in County Y. Although E is named on the NFTL filed in County Y, E is not the person described in section 6321 (the taxpayer) who is named on the NFTL.

(b) Entitlement to a CDP hearing

(1) In general. --A taxpayer is entitled to one CDP hearing with respect to the first filing of a NFTL (on or after January 19, 1999) for a given tax period or periods with respect to the unpaid tax shown on the NFTL if the taxpayer timely requests such a hearing. The taxpayer must request such a hearing during the 30-day period that commences the day after the end of the five business day period within which the IRS is required to provide the taxpayer with notice of the filing of the NFTL.

(2) Questions and answers. --The questions and answers illustrate the provisions of this paragraph (b) as follows:

Q-B1. Is a taxpayer entitled to a CDP hearing with respect to the filing of a NFTL for a type of tax and tax periods previously subject to a CDP Notice with respect to a NFTL filed in a different location on or after January 19, 1999?

A-B1. No. Although the taxpayer will receive notice of each filing of a NFTL, under section 6320(b)(2), the taxpayer is entitled to only one CDP hearing under section 6320 for the type of tax and tax periods with respect to the first filing of a NFTL that occurs on or after January 19, 1999, with respect to that unpaid tax. Accordingly, if the taxpayer does not timely request a CDP hearing with respect to the first filing of a NFTL on or after January 19, 1999, for a given tax period or periods with respect to an unpaid tax, the taxpayer foregoes the right to a CDP hearing with Appeals and judicial review of the Appeals determination with respect to the NFTL. Under such circumstances, the taxpayer may request an equivalent hearing as described in paragraph (i) of this section.

Q-B2. Is the taxpayer entitled to a CDP hearing when a NFTL for an unpaid tax is filed on or after January 19, 1999, in one recording office and a NFTL was previously filed for the same unpaid tax in another recording office prior to that date?

A-B2. Yes. Under section 6320(b)(2), the taxpayer is entitled to a CDP hearing under section 6320 for each tax period with respect to the first filing of a NFTL on or after January 19, 1999, with respect to an unpaid tax, whether or not a NFTL was filed prior to January 19, 1999, for the same unpaid tax and tax period or periods.

Q-B3. When the IRS provides the taxpayer with a substitute CDP Notice and the taxpayer timely requests a CDP hearing, is the taxpayer entitled to a CDP hearing before Appeals?

A-B3. Yes. Unless the taxpayer provides the IRS a written withdrawal of the request that Appeals conduct a CDP hearing, the taxpayer is entitled to a CDP hearing before Appeals. Following the hearing, Appeals will issue a Notice of Determination, and the taxpayer is entitled to seek judicial review of that Notice of Determination.

Q-B4. If the IRS sends a second CDP Notice under section 6320 (other than a substitute CDP Notice) for a tax period and with respect to an unpaid tax for which a section 6320 CDP Notice was previously sent, is the taxpayer entitled to a section 6320 CDP hearing based on the second CDP Notice?

A-B4. No. The taxpayer is entitled to a CDP hearing under section 6320 for each tax period only with respect to the first filing of a NFTL on or after January 19, 1999, with respect to an unpaid tax.

Q-B5. Is a nominee of, or a person holding property of, the taxpayer entitled to a CDP hearing or an equivalent hearing?

A-B5. No. Such person is not the person described in section 6321 and is, therefore, not entitled to a CDP hearing or an equivalent hearing (as discussed in paragraph (i) of this section). Such person, however, may seek reconsideration by the IRS office collecting the tax or filing the NFTL, an administrative hearing before Appeals under its Collection Appeals Program, or assistance from the National Taxpayer Advocate. However, any such administrative hearing would not be a CDP hearing under section 6320 and any determination or decision resulting from the hearing would not be subject to judicial review under section 6320. Such person also may avail himself of the administrative procedure included in section 6325(b)(4) or of any other procedures to which he is entitled.

(3) Examples. --The following examples illustrate the principles of this paragraph (b):

Example 1. H and W are jointly and severally liable with respect to a jointly filed income tax return for 1996. The IRS files a NFTL with respect to H and W in County X on January 26, 1999. This is the first NFTL filed on or after January 19, 1999, for their 1996 liability. H and W are each entitled to a CDP hearing with respect to the NFTL filed in County X. On June 17, 1999, a NFTL for the same tax liability is filed against H and W in County Y. The IRS will give H and W notification of the NFTL filed in County Y. H and W, however, are not entitled to a CDP hearing or an equivalent hearing with respect to the NFTL filed in County Y.

Example 2. Federal income tax liability for 1997 is assessed against individual D. D buys an asset and puts it in individual E's name. A NFTL is filed against E, as nominee of D in County X on June 5, 1999, for D's federal income tax liability for 1997. The IRS will give D a CDP Notice with respect to the NFTL filed in County X. The IRS will not notify E of the NFTL filed in County X. The IRS is not required to notify E of the filing of the NFTL in County X. Although E is named on the NFTL filed in County X, E is not the person described in section 6321 (the taxpayer) who is named on the NFTL.

(1) In general. --When a taxpayer is entitled to a CDP hearing under section 6320, the CDP hearing must be requested during the 30-day period that commences the day after the end of the five business day period within which the IRS is required to provide the taxpayer with a CDP Notice with respect to the filing of the NFTL.

(2) Questions and answers. --The questions and answers illustrate the provisions of this paragraph (c) as follows:

Q-C1. What must a taxpayer do to obtain a CDP hearing?

A-C1. (i) The taxpayer must make a request in writing for a CDP hearing. A written request in any form, which requests a CDP hearing, will be acceptable. The request must include the taxpayer's name, address, and daytime telephone number, and must be signed by the taxpayer or the taxpayer's authorized representative and dated. The CDP Notice should include, when appropriate, a Form 12153 (Request for a Collection Due Process Hearing) that can be used by the taxpayer to request a CDP hearing.

(ii) The Form 12153 requests the following information:

(A) The taxpayer's name, address, daytime telephone number, and taxpayer identification number (SSN or TIN).

(B) The type of tax involved.

(D) A statement that the taxpayer requests a hearing with Appeals concerning the filing of the NFTL.

(E) The reason or reasons why the taxpayer disagrees with the filing of the NFTL.

(iii) Taxpayers are encouraged to use a Form 12153 in requesting a CDP hearing so that the request can be readily identified and forwarded to Appeals. Taxpayers may obtain a copy of Form 12153 by contacting the IRS office that issued the CDP Notice or by calling, toll-free, 1-800-829-3676.

(iv) The taxpayer may perfect any timely written request for a CDP hearing which otherwise meets the requirements set forth above and which is made or alleged to have been made on the taxpayer's behalf by the taxpayer's spouse or any other representative by filing, within a reasonable time of a request from Appeals, a signed written affirmation that the request was originally submitted on the taxpayer's behalf.

Q-C2. Must the request for the CDP hearing be in writing?

A-C2. Yes. There are several reasons why the request for a CDP hearing must be in writing. The filing of a timely request for a CDP hearing is the first step in what may result in a court proceeding. A written request will provide proof that the CDP hearing was requested and thus permit the court to verify that it has jurisdiction over any subsequent appeal of the Notice of Determination issued by Appeals. In addition, the receipt of the written request will establish the date on which the periods of limitation under section 6502 (relating to collection after assessment), section 6531 (relating to criminal prosecutions), and section 6532 (relating to suits) are suspended as a result of the CDP hearing and any judicial appeal. Moreover, because the IRS anticipates that taxpayers will contact the IRS office that issued the CDP Notice for further information or assistance in filling out Form 12153, or to attempt to resolve their liabilities prior to going through the CDP hearing process, the requirement of a written request should help prevent any misunderstanding as to whether a CDP hearing has been requested. If the information requested on Form 12153 is furnished by the taxpayer, the written request also will help to establish the issues for which the taxpayer seeks a determination by Appeals.

Q-C3. When must a taxpayer request a CDP hearing with respect to a CDP Notice issued under section 6320?

A-C3. A taxpayer must submit a written request for a CDP hearing within the 30-day period that commences the day after the end of the five business day period following the filing of the NFTL. Any request filed during the five business day period (before the beginning of the 30-day period) will be deemed to be filed on the first day of the 30-day period. The period for submitting a written request for a CDP hearing with respect to a CDP Notice issued under section 6320 is slightly different from the period for submitting a written request for a CDP hearing with respect to a CDP Notice issued under section 6330. For a CDP Notice issued under section 6330, the taxpayer must submit a written request for a CDP hearing within the 30-day period commencing the day after the date of the CDP Notice.

Q-C4. How will the timeliness of a taxpayer's written request for a CDP hearing be determined?

A-C4. The rules and regulations under section 7502 and section 7503 will apply to determine the timeliness of the taxpayer's request for a CDP hearing, if properly transmitted and addressed as provided in A-C6 of this paragraph (c)(2).

Q-C5. Is the 30-day period within which a taxpayer must make a request for a CDP hearing extended because the taxpayer resides outside the United States?

A-C5. No. Section 6320 does not make provision for such a circumstance. Accordingly, all taxpayers who want a CDP hearing under section 6320 must request such a hearing within the 30-day period that commences the day after the end of the five business day notification period.

Q-C6. Where should the written request for a CDP hearing be sent?

A-C6. The written request for a CDP hearing must be sent, or hand delivered, to the IRS office that issued the CDP Notice at the address indicated on the CDP Notice. If the address of that office does not appear on the CDP Notice, the request must be sent, or hand delivered, to the compliance area director, or his or her successor, serving the compliance area in which the taxpayer resides or has its principal place of business. If the taxpayer does not have a residence or principal place of business in the United States, the request must be sent, or hand delivered, to the compliance director, Philadelphia Submission Processing Center, or his or her successor. Taxpayers may obtain the address of the appropriate person to which the written request should be sent or hand delivered by calling, toll-free, 1-800-829-1040 and providing their taxpayer identification number (SSN or TIN).

Q-C7. What will happen if the taxpayer does not request a CDP hearing in writing within the 30-day period that commences the day after the end of the five business day notification period?

A-C7. If the taxpayer does not request a CDP hearing in writing within the 30-day period that commences on the day after the end of the five business day notification period, the taxpayer will forego the right to a CDP hearing under section 6320 with respect to the unpaid tax and tax periods shown on the CDP Notice. The taxpayer may, however, request an equivalent hearing. See paragraph (i) of this section.

Q-C8. When must a taxpayer request a CDP hearing with respect to a substitute CDP Notice?

A-C8. A CDP hearing with respect to a substitute CDP Notice must be requested in writing by the taxpayer prior to the end of the 30-day period commencing the day after the date of the substitute CDP Notice.

Q-C9. Can taxpayers attempt to resolve the matter of the NFTL with an officer or employee of the IRS office collecting the tax or filing the NFTL either before or after requesting a CDP hearing?

A-C9. Yes. Taxpayers are encouraged to discuss their concerns with the IRS office collecting the tax or filing the NFTL, either before or after they request a CDP hearing. If such a discussion occurs before a request is made for a CDP hearing, the matter may be resolved without the need for Appeals consideration. However, these discussions do not suspend the running of the 30-day period, commencing the day after the end of the five business day notification period, within which the taxpayer is required to request a CDP hearing, nor do they extend that 30-day period. If discussions occur after the request for a CDP hearing is filed and the taxpayer resolves the matter with the IRS office collecting the tax or filing the NFTL, the taxpayer may withdraw in writing the request that a CDP hearing be conducted by Appeals. The taxpayer can also waive in writing some or all of the requirements regarding the contents of the Notice of Determination.

(3) Examples. --The following examples illustrate the principles of this paragraph (c):

Example 1. A NFTL for a 1997 income tax liability assessed against individual A is filed in County X on June 17, 1999. The IRS mails a CDP Notice to individual A's last known address on June 18, 1999. Individual A has until July 26, 1999, a Monday, to request a CDP hearing. The five business day period within which the IRS is required to notify individual A of the filing of the NFTL in County X expires on June 24, 1999. The 30-day period within which individual A may request a CDP hearing begins on June 25, 1999. Because the 30-day period expires on July 24, 1999, a Saturday, individual A's written request for a CDP hearing will be considered timely if it is properly transmitted and addressed to the IRS in accordance with section 7502 and the regulations thereunder no later than July 26, 1999.

Example 2. Same facts as in Example 1, except that individual A is on vacation, outside the United States, or otherwise does not receive or read the CDP Notice until July 19, 1999. As in Example 1, individual A has until July 26, 1999, to request a CDP hearing. If individual A does not request a CDP hearing, individual A may request an equivalent hearing as to the NFTL at a later time. The taxpayer should make a request for an equivalent hearing at the earliest possible time.

Example 3. Same facts as in Example 2, except that individual A does not receive or read the CDP Notice until after July 26, 1999, and does not request a hearing by July 26, 1999. Individual A is not entitled to a CDP hearing. Individual A may request an equivalent hearing as to the NFTL at a later time. The taxpayer should make a request for an equivalent hearing at the earliest possible time.

Example 4. Same facts as in Example 1, except the IRS determines that the CDP Notice mailed on June 18, 1999, was not mailed to individual A's last known address. As soon as practicable after making this determination, the IRS will mail a substitute CDP Notice to individual A at individual A's last known address, hand deliver the substitute CDP Notice to individual A, or leave the substitute CDP Notice at individual A's dwelling or usual place of business. Individual A will have 30 days commencing on the day after the date of the substitute CDP Notice within which to request a CDP hearing.

(d) Conduct of CDP hearing

(1) In general. --If a taxpayer requests a CDP hearing under section 6320(a)(3)(B) (and does not withdraw that request), the CDP hearing will be held with Appeals. The taxpayer is entitled under section 6320 to a CDP hearing for the unpaid tax and tax periods set forth in a NFTL only with respect to the first filing of a NFTL on or after January 19, 1999. To the extent practicable, the CDP hearing requested under section 6320 will be held in conjunction with any CDP hearing the taxpayer requests under section 6330. A CDP hearing will be conducted by an employee or officer of Appeals who, prior to the first CDP hearing under section 6320 or section 6330, has had no involvement with respect to the unpaid tax for the tax periods to be covered by the hearing, unless the taxpayer waives this requirement.

(2) Questions and answers. --The questions and answers illustrate the provisions of this paragraph (d) as follows:

Q-D1. Under what circumstances can a taxpayer receive more than one CDP hearing under section 6320 with respect to a tax period?

A-D1. The taxpayer may receive more than one CDP hearing under section 6320 with respect to a tax period where the tax involved is a different type of tax (for example, an employment tax liability, where the original CDP hearing for the tax period involved an income tax liability), or where the same type of tax for the same period is involved, but where the amount of the unpaid tax has changed as a result of an additional assessment of tax (not including interest or penalties) for that period or an additional accuracy-related or filing-delinquency penalty has been assessed. The taxpayer is not entitled to another CDP hearing under section 6320 if the additional assessment represents accruals of interest, accruals of penalties, or both.

Q-D2. Will a CDP hearing with respect to one tax period be combined with a CDP hearing with respect to another tax period?

A-D2. To the extent practicable, a CDP hearing with respect to one tax period shown on the NFTL will be combined with any and all other CDP hearings which the taxpayer has requested.

Q-D3. Will a CDP hearing under section 6320 be combined with a CDP hearing under section 6330?

A-D3. To the extent practicable, a CDP hearing under section 6320 will be held in conjunction with a CDP hearing under section 6330.

Q-D4. What is considered to be prior involvement by an employee or officer of Appeals with respect to the unpaid tax and tax period involved in the hearing?

A-D4. Prior involvement by an employee or officer of Appeals includes participation or involvement in an Appeals hearing (other than a CDP hearing held under either section 6320 or section 6330) that the taxpayer may have had with respect to the unpaid tax and tax periods shown on the NFTL.

Q-D5. How can a taxpayer waive the requirement that the officer or employee of Appeals have no prior involvement with respect to the tax and tax periods involved in the CDP hearing?

A-D5. The taxpayer must sign a written waiver.

Q-D6. How are CDP hearings conducted?

A-D6. The formal hearing procedures required under the Administrative Procedure Act, 5 U.S.C. 551 et seq., do not apply to CDP hearings. CDP hearings are much like Collection Appeal Program (CAP) hearings in that they are informal in nature and do not require the Appeals officer or employee and the taxpayer, or the taxpayer's representative, to hold a face-to-face meeting. 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. A transcript or recording of any face-to-face meeting or conversation between an Appeals officer or employee and the taxpayer or the taxpayer's representative is not required. The taxpayer or the taxpayer's representative does not have the right to subpoena and examine witnesses at a CDP hearing.

Q-D7. If a taxpayer wants a face-to-face CDP hearing, where will it be held?

A-D7. The taxpayer must be offered an opportunity for a hearing at the Appeals office closest to taxpayer's residence or, in the case of business taxpayers, the taxpayer's principal place of business. If that is not satisfactory to the taxpayer, the taxpayer will be given an opportunity for a hearing by correspondence or by telephone. If that is not satisfactory to the taxpayer, the Appeals officer or employee will review the taxpayer's request for a CDP hearing, the case file, any other written communications from the taxpayer (including written communications, if any, submitted in connection with the CDP hearing), and any notes of any oral communications with the taxpayer or the taxpayer's representative. Under such circumstances, review of those documents will constitute the CDP hearing for the purposes of section 6320(b).

(e) Matters considered at CDP hearing

(1) In general. --Appeals has the authority to determine the validity, sufficiency, and timeliness of any CDP Notice given by the IRS and of any request for a CDP hearing that is made by a taxpayer. Prior to the issuance of a determination, the hearing officer is required to obtain verification from the IRS office collecting the tax or filing the NFTL that the requirements of any applicable law or administrative procedure have been met. The taxpayer may raise any relevant issue relating to the unpaid tax at the hearing, including appropriate spousal defenses, challenges to the appropriateness of the NFTL filing, and offers of collection alternatives. The taxpayer also may raise challenges to the existence or amount of the tax liability specified on the CDP Notice for any tax period shown on the CDP Notice if the taxpayer did not receive a statutory notice of deficiency for that tax liability or did not otherwise have an opportunity to dispute that tax liability. Finally, the taxpayer may not raise an issue that was raised and considered at a previous CDP hearing under section 6330 or in any other previous administrative or judicial proceeding if the taxpayer participated meaningfully in such hearing or proceeding. Taxpayers will be expected to provide all relevant information requested by Appeals, including financial statements, for its consideration of the facts and issues involved in the hearing.

(2) Spousal defenses. --A taxpayer may raise any appropriate spousal defenses at a CDP hearing unless the Commissioner has already made a final determination as to spousal defenses in a statutory notice of deficiency or final determination letter. To claim a spousal defense under section 66 or section 6015, the taxpayer must do so in writing according to rules prescribed by the Commissioner or the Secretary. Spousal defenses raised under sections 66 and 6015 in a CDP hearing are governed in all respects by the provisions of sections 66 and section 6015 and the regulations and procedures thereunder.

(3) Questions and answers. --The questions and answers illustrate the provisions of this paragraph (e) as follows:

Q-E1. What factors will Appeals consider in making its determination?

A-E1. Appeals will consider the following matters in making its determination:

(i) Whether the IRS met the requirements of any applicable law or administrative procedure.

(ii) Any issues appropriately raised by the taxpayer relating to the unpaid tax.

(iii) Any appropriate spousal defenses raised by the taxpayer.

(iv) Any challenges made by the taxpayer to the appropriateness of the NFTL filing.

(v) Any offers by the taxpayer for collection alternatives.

(vi) Whether the continued existence of the filed NFTL represents a balance between the need for the efficient collection of taxes and the legitimate concern of the taxpayer that any collection action be no more intrusive than necessary.

Q-E2. When is a taxpayer entitled to challenge the existence or amount of the tax liability specified in the CDP Notice?

A-E2. A taxpayer is entitled to challenge the existence or amount of the tax liability specified in the CDP Notice if the taxpayer did not receive a statutory notice of deficiency for such liability or did not otherwise have an opportunity to dispute such liability. Receipt of a statutory notice of deficiency for this purpose means receipt in time to petition the Tax Court for a redetermination of the deficiency asserted in the notice of deficiency. An opportunity to dispute a liability includes a prior opportunity for a conference with Appeals that was offered either before or after the assessment of the liability.

Q-E3. Are spousal defenses subject to the limitations imposed under section 6330(c)(2)(B) on a taxpayer's right to challenge the tax liability specified in the CDP Notice at a CDP hearing?

A-E3. The limitations imposed under section 6330(c)(2)(B) do not apply to spousal defenses. When a taxpayer asserts a spousal defense, the taxpayer is not disputing the amount or existence of the liability itself, but asserting a defense to the liability which may or may not be disputed. A spousal defense raised under section 66 or section 6015 is governed by section 66 or section 6015 and the regulations and procedures thereunder. Any limitation under those sections, regulations, and procedures therefore will apply.

Q-E4. May a taxpayer raise at a CDP hearing a spousal defense under section 66 or section 6015 if that defense was raised and considered administratively and the Commissioner has issued a statutory notice of deficiency or final determination letter addressing the spousal defense?

A-E4. No. A taxpayer is precluded from raising a spousal defense at a CDP hearing when the Commissioner has made a final determination under section 66 or section 6015 in a final determination letter or statutory notice of deficiency. However, a taxpayer may raise spousal defenses in a CDP hearing when the taxpayer has previously raised spousal defenses, but the Commissioner has not yet made a final determination regarding this issue.

Q-E5. May a taxpayer raise at a CDP hearing a spousal defense under section 66 or section 6015 if that defense was raised and considered in a prior judicial proceeding that has become final?

A-E5. No. A taxpayer is precluded by the doctrine of res judicata and by the specific limitations under section 66 or section 6015 from raising a spousal defense in a CDP hearing under these circumstances.

Q-E6. What collection alternatives are available to the taxpayer?

A-E6. Collection alternatives would include, for example, a proposal to withdraw the NFTL in circumstances that will facilitate the collection of the tax liability, an installment agreement, an offer-in-compromise, the posting of a bond, or the substitution of other assets.

Q-E7. What issues may a taxpayer raise in a CDP hearing under section 6320 if the taxpayer previously received a notice under section 6330 with respect to the same tax and tax period and did not request a CDP hearing with respect to that notice?

A-E7. The taxpayer may raise appropriate spousal defenses, challenges to the appropriateness of the NFTL filing, and offers of collection alternatives. The existence or amount of the tax liability for the tax and tax period specified in the CDP Notice may be challenged only if the taxpayer did not already have an opportunity to dispute that tax liability. Where the taxpayer previously received a CDP Notice under section 6330 with respect to the same tax and tax period and did not request a CDP hearing with respect to that earlier CDP Notice, the taxpayer already had an opportunity to dispute the existence or amount of the underlying tax liability.

Q-E8. How will Appeals issue its determination?

A-E8. (i) Taxpayers will be sent a dated Notice of Determination by certified or registered mail. The Notice of Determination will set forth Appeals' findings and decisions. It will state whether the IRS met the requirements of any applicable law or administrative procedure; it will resolve any issues appropriately raised by the taxpayer relating to the unpaid tax; it will include a decision on any appropriate spousal defenses raised by the taxpayer; it will include a decision on any challenges made by the taxpayer to the appropriateness of the NFTL filing; it will respond to any offers by the taxpayer for collection alternatives; and it will address whether the continued existence of the filed NFTL represents a balance between the need for the efficient collection of taxes and the legitimate concern of the taxpayer that any collection action be no more intrusive than necessary. The Notice of Determination will also set forth any agreements that Appeals reached with the taxpayer, any relief given the taxpayer, and any actions the taxpayer or the IRS are required to take. Lastly, the Notice of Determination will advise the taxpayer of the taxpayer's right to seek judicial review within 30 days of the date of the Notice of Determination.

(ii) Because taxpayers are encouraged to discuss their concerns with the IRS office collecting the tax or filing the NFTL, certain matters that might have been raised at a CDP hearing may be resolved without the need for Appeals consideration. Unless, as a result of these discussions, the taxpayer agrees in writing to withdraw the request that Appeals conduct a CDP hearing, Appeals will still issue a Notice of Determination. The taxpayer can, however, waive in writing Appeals' consideration of some or all of the matters it would otherwise consider in making its determination.

Q-E9. Is there a period of time within which Appeals must conduct a CDP hearing or issue a Notice of Determination?

A-E9. No. Appeals will, however, attempt to conduct a CDP hearing and issue a Notice of Determination as expeditiously as possible under the circumstances.

Q-E10. Why is the Notice of Determination and its date important?

A-E10. The Notice of Determination will set forth Appeals' findings and decisions with respect to the matters set forth in A-E1 of this paragraph (e)(3). The 30-day period within which the taxpayer is permitted to seek judicial review of Appeals' determination commences the day after the date of the Notice of Determination.

Q-E11. If an Appeals officer considers the merits of a taxpayer's liability in a CDP hearing when the taxpayer had previously received a statutory notice of deficiency or otherwise had an opportunity to dispute the liability prior to the NFTL, will the Appeals officer's determination regarding those liability issues be considered part of the Notice of Determination?

A-E11. No. An Appeals officer may consider the existence and amount of the underlying tax liability as a part of the CDP hearing only if the taxpayer did not receive a statutory notice of deficiency for the tax liability in question or otherwise have a prior opportunity to dispute the tax liability. Similarly, an Appeals officer may not consider any other issue if the issue was raised and considered at a previous hearing under section 6330 or in any other previous administrative or judicial proceeding in which the person seeking to raise the issue meaningfully participated. In the Appeals officer's sole discretion, however, the Appeals officer may consider the existence or amount of the underlying tax liability, or such other precluded issues, at the same time as the CDP hearing. Any determination, however, made by the Appeals officer with respect to such a precluded issue shall not be treated as part of the Notice of Determination issued by the Appeals officer and will not be subject to any judicial review. Because any decisions made by the Appeals officer with respect to such precluded issues are not properly a part of the CDP hearing, such decisions are not required to appear in the Notice of Determination issued following the hearing. Even if a decision concerning such precluded issues is referred to in the Notice of Determination, it is not reviewable by a district court or the Tax Court because the precluded issue is not properly part of the CDP hearing.

(4) Examples. --The following examples illustrate the principles of this paragraph (e):

Example 1. The IRS sends a statutory notice of deficiency to the taxpayer at his last known address asserting a deficiency for the tax year 1995. The taxpayer receives the notice of deficiency in time to petition the Tax Court for a redetermination of the asserted deficiency. The taxpayer does not timely file a petition with the Tax Court. The taxpayer is precluded from challenging the existence or amount of the tax liability in a subsequent CDP hearing.

Example 2. Same facts as in Example 1, except the taxpayer does not receive the notice of deficiency in time to petition the Tax Court and did not have another prior opportunity to dispute the tax liability. The taxpayer is not precluded from challenging the existence or amount of the tax liability in a subsequent CDP hearing.

Example 3. The IRS properly assesses a trust fund recovery penalty against the taxpayer. The IRS offers the taxpayer the opportunity for a conference with Appeals at which the taxpayer would have the opportunity to dispute the assessed liability. The taxpayer declines the opportunity to participate in such a conference. The taxpayer is precluded from challenging the existence or amount of the tax liability in a subsequent CDP hearing.

(f) Judicial review of Notice of Determination

(1) In general. --Unless the taxpayer provides the IRS a written withdrawal of the request that Appeals conduct a CDP hearing, Appeals is required to issue a Notice of Determination in all cases where a taxpayer has timely requested a CDP hearing. The taxpayer may appeal such determinations made by Appeals within the 30-day period commencing the day after the date of the Notice of Determination to the Tax Court or a district court of the United States, as appropriate.

(2) Questions and answers. --The questions and answers illustrate the provisions of this paragraph (f) as follows:

Q-F1. What must a taxpayer do to obtain judicial review of a Notice of Determination?

A-F1. Subject to the jurisdictional limitations described in A-F2, the taxpayer must, within the 30-day period commencing the day after the date of the Notice of Determination, appeal the determination by Appeals to the Tax Court or to a district court of the United States.

Q-F2. With respect to the relief available to the taxpayer under section 6015, what is the time frame within which a taxpayer may seek Tax Court review of Appeals' determination following a CDP hearing?

A-F2. If the taxpayer seeks Tax Court review not only of Appeals' denial of relief under section 6015, but also of relief requested with respect to other issues raised in the CDP hearing, the taxpayer should request Tax Court review within the 30-day period commencing the day after the date of the Notice of Determination. If the taxpayer only seeks Tax Court review of Appeals' denial of relief under section 6015, then the taxpayer should request Tax Court review, as provided by section 6015(e), within 90 days of Appeals' determination. If a request for Tax Court review is filed after the 30-day period for seeking judicial review under section 6320, then only the taxpayer's section 6015 claims may be reviewable by the Tax Court.

Q-F3. Where should a taxpayer direct a request for judicial review of a Notice of Determination?

A-F3. If the Tax Court would have jurisdiction over the type of tax specified in the CDP Notice (for example, income and estate taxes), then the taxpayer must seek judicial review by the Tax Court. If the tax liability arises from a type of tax over which the Tax Court would not have jurisdiction, then the taxpayer must seek judicial review by a district court of the United States in accordance with Title 28 of the United States Code.

Q-F4. What happens if the taxpayer timely appeals Appeals' determination to the incorrect court?

A-F4. If the court to which the taxpayer directed a timely appeal of the Notice of Determination determines that the appeal was to the incorrect court (because of jurisdictional, venue or other reasons), the taxpayer will have 30 days after the court's determination to that effect within which to file an appeal to the correct court.

Q-F5. What issue or issues may the taxpayer raise before the Tax Court or before a district court if the taxpayer disagrees with the Notice of Determination?

A-F5. In seeking Tax Court or district court review of Appeals' Notice of Determination, the taxpayer can only request that the court consider an issue that was raised in the taxpayer's CDP hearing.

(g) Effect of request for CDP hearing and judicial review on periods of limitation and collection activity

(1) In general. --The periods of limitation under section 6502 (relating to collection after assessment), section 6531 (relating to criminal prosecutions), and section 6532 (relating to suits) are suspended until the date the IRS receives the taxpayer's written withdrawal of the request for a CDP hearing by Appeals or the determination resulting from the CDP hearing becomes final by expiration of the time for seeking judicial review or the exhaustion of any rights to appeals following judicial review. In no event shall any of these periods of limitation expire before the 90th day after the date on which the IRS receives the taxpayer's written withdrawal of the request that Appeals conduct a CDP hearing or the determination with respect to such hearing becomes final upon either the expiration of the time for seeking judicial review or upon exhaustion of any rights to appeals following judicial review.

(2) Questions and answers. --The questions and answers illustrate the provisions of this paragraph (g) as follows:

Q-G1. For what period of time will the periods of limitation under sections 6502, 6531, and 6532 remain suspended if the taxpayer timely requests a CDP hearing concerning the filing of a NFTL?

A-G1. The suspension period commences on the date the IRS receives the taxpayer's written request for a CDP hearing. The suspension period continues until the IRS receives a written withdrawal by the taxpayer of the request for a CDP hearing or the Notice of Determination resulting from the CDP hearing becomes final. In no event shall any of these periods of limitation expire before the 90th day after the day on which the IRS receives the taxpayer's written withdrawal of the request that Appeals conduct a CDP hearing or there is a final determination with respect to such hearing. The periods of limitation that are suspended under section 6320 are those which apply to the taxes and the tax period or periods to which the CDP Notice relates.

Q-G2. For what period of time will the periods of limitation under sections 6502, 6531, and 6532 be suspended if the taxpayer does not request a CDP hearing concerning the filing of a NFTL, or the taxpayer requests a CDP hearing, but his request is not timely?

A-G2. Under either of these circumstances, section 6320 does not provide for a suspension of the periods of limitation.

Q-G3. What, if any, enforcement actions can the IRS take during the suspension period?

A-G3. Section 6330(e), made applicable to section 6320 CDP hearings by section 6320(c), provides for the suspension of the periods of limitation discussed in paragraph (g)(1) of these regulations. Section 6330(e) also provides that levy actions that are the subject of the requested CDP hearing under that section shall be suspended during the same period. Levy actions, however, are not the subject of a CDP hearing under section 6320. The IRS may levy for tax periods and taxes covered by the CDP Notice under section 6320 and for other taxes and periods if the CDP requirements under section 6330 for those taxes and periods have been satisfied. The IRS also may file NFTLs for tax periods or taxes not covered by the CDP Notice, may file a NFTL for the same tax and tax period stated on the CDP Notice at another recording office, and may take other non-levy collection actions such as initiating judicial proceedings to collect the tax shown on the CDP Notice or offsetting overpayments from other periods, or of other taxes, against the tax shown on the CDP Notice. Moreover, the provisions in section 6330 do not apply when the IRS levies for the tax and tax period shown on the CDP Notice to collect a state tax refund due the taxpayer, or determines that collection of the tax is in jeopardy. Finally, section 6330 does not prohibit the IRS from accepting any voluntary payments made for the tax and tax period stated on the CDP Notice.

(3) Examples. --The following examples illustrate the principles of this paragraph (g):

Example 1. The period of limitation under section 6502 with respect to the taxpayer's tax period listed in the NFTL will expire on August 1, 1999. The IRS sent a CDP Notice to the taxpayer on April 30, 1999. The taxpayer timely requested a CDP hearing. The IRS received this request on May 15, 1999. Appeals sends the taxpayer its determination on June 15, 1999. The taxpayer timely seeks judicial review of that determination. The period of limitation under section 6502 would be suspended from May 15, 1999, until the determination resulting from that hearing becomes final by expiration of the time for seeking review or reconsideration before the appropriate court, plus 90 days.

Example 2. Same facts as in Example 1, except the taxpayer does not seek judicial review of Appeals' determination. Because the taxpayer requested the CDP hearing when fewer than 90 days remained on the period of limitation, the period of limitation will be extended to October 13, 1999 (90 days from July 15, 1999).

(h) Retained jurisdiction of Appeals

(1) In general. --The Appeals office that makes a determination under section 6320 retains jurisdiction over that determination, including any subsequent administrative hearings that may be requested by the taxpayer regarding the NFTL and any collection actions taken or proposed with respect to Appeals' determination. Once a taxpayer has exhausted his other remedies, Appeals' retained jurisdiction permits it to consider whether a change in the taxpayer's circumstances affects its original determination. Where a taxpayer alleges a change in circumstances that affects Appeals' original determination, Appeals may consider whether changed circumstances warrant a change in its earlier determination.

(2) Questions and answers. --The questions and answers illustrate the provisions of this paragraph (h) as follows:

Q-H1. Are the periods of limitation suspended during the course of any subsequent Appeals consideration of the matters raised by a taxpayer when the taxpayer invokes the retained jurisdiction of Appeals under section 6330(d)(2)(A) or (d)(2)(B)?

A-H1. No. Under section 6320(b)(2), a taxpayer is entitled to only one CDP hearing under section 6320 with respect to the tax and tax period or periods specified in the CDP Notice. Any subsequent consideration by Appeals pursuant to its retained jurisdiction is not a continuation of the original CDP hearing and does not suspend the periods of limitation.

Q-H2. Is a decision of Appeals resulting from a retained jurisdiction hearing appealable to the Tax Court or a district court?

A-H2. No. As discussed in A-H1, a taxpayer is entitled to only one CDP hearing under section 6320 with respect to the tax and tax period or periods specified in the CDP Notice. Only determinations resulting from CDP hearings are appealable to the Tax Court or a district court.

(i) Equivalent hearing

(1) In general. --A taxpayer who fails to make a timely request for a CDP hearing is not entitled to a CDP hearing. Such a taxpayer may nevertheless request an administrative hearing with Appeals, which is referred to herein as an "equivalent hearing." The equivalent hearing will be held by Appeals and generally will follow Appeals' procedures for a CDP hearing. Appeals will not, however, issue a Notice of Determination. Under such circumstances, Appeals will issue a Decision Letter.

(2) Questions and answers. --The questions and answers illustrate the provisions of this paragraph (i) as follows:

Q-I1. What issues will Appeals consider at an equivalent hearing?

A-I1. In an equivalent hearing, Appeals will consider the same issues that it would have considered at a CDP hearing on the same matter.

Q-I2. Are the periods of limitation under sections 6502, 6531, and 6532 suspended if the taxpayer does not timely request a CDP hearing and is subsequently given an equivalent hearing?

A-I2. No. The suspension period provided for in section 6330(e) relates only to hearings requested within the 30-day period that commences on the day after the end of the five business day period following the filing of the NFTL, that is, CDP hearings.

Q-I3. Will collection action, including the filing of additional NFTLs, be suspended if a taxpayer requests and receives an equivalent hearing?

A-I3. Collection action is not required to be suspended. Accordingly, the decision to take collection action during the pendency of an equivalent hearing will be determined on a case-by-case basis. Appeals may request the IRS office with responsibility for collecting the taxes to suspend all or some collection action or to take other appropriate action if it determines that such action is appropriate or necessary under the circumstances.

Q-I4. What will the Decision Letter state?

A-I4. The Decision Letter will generally contain the same information as a Notice of Determination.

Q-I5. Will a taxpayer be able to obtain court review of a decision made by Appeals with respect to an equivalent hearing?

A-I5. Section 6320 does not authorize a taxpayer to appeal the decision of Appeals with respect to an equivalent hearing. A taxpayer may under certain circumstances be able to seek Tax Court review of Appeals' denial of relief under section 6015. Such review must be sought within 90 days of the issuance of Appeals' determination on those issues, as provided by section 6015(e).

(j) Effective date. --This section is applicable with respect to any filing of a NFTL on or after January 19, 1999. [Reg. §301.6320-1.]

.01 Historical Comment: Proposed 1/22/99. Adopted 1/17/2002 by T.D. 8979.

Notice and opportunity for hearing upon filing of notice of federal tax lien,REG-150088-02, 9/16/2005.

Par. 2. Section 301.6320-1 is proposed to be amended as follows:

1. Paragraph (c)(2) A-C1, Q&A-C6 and A-C7 are revised.

2. Paragraph (d)(2) A-D4 and A-D7 are revised.

3. Paragraph (d)(2) Q&A-D8 is added.

4. Paragraph (d)(3) is added.

5. Paragraph (e)(1) is revised.

6. Paragraph (e)(3) A-E2, A-E6 and A-E7 are revised.

7. Paragraph (f)(2) A-F5 is revised.

8. Paragraph (f)(2) Q&A-F6 is added.

9. Paragraph (i)(2)Q&A-I1 through Q&A-I5 are renumbered Q&A-I2 through Q&A-I6, a new paragraph (i)(2)Q&A-I1 and new paragraphs Q&A-I7 through Q&A-I11 are added.

10. Paragraph (j) is revised.

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(2) * * *

A-C1. (i) The taxpayer must make a request in writing for a CDP hearing. The request for a CDP hearing shall include the information specified in A-C1(ii) of this paragraph (c)(2). See A-D7 and A-D8 of paragraph (d)(2).

(ii) The written request for a CDP hearing must be dated and must include the following information:

(A) The taxpayer's name, address, daytime telephone number (if any), and taxpayer identification number (SSN or EIN).

(B) The type of tax involved.

(D) A statement that the taxpayer requests a hearing with Appeals concerning the filing of the NFTL.

(E) The reason or reasons why the taxpayer disagrees with the filing of the NFTL.

(F) The signature of the taxpayer or the taxpayer's authorized representative.

(iii) The taxpayer must perfect any timely written request for a CDP hearing that does not provide the required information set forth in A-C1(ii) of this paragraph within a reasonable period of time after a request from the IRS.

(iv) Taxpayers are encouraged to use a Form 12153, "Request for a Collection Due Process Hearing," in requesting a CDP hearing so that the request can be readily identified and forwarded to Appeals. Taxpayers may obtain a copy of Form 12153 by contacting the IRS office that issued the CDP Notice, by downloading a copy from the IRS Internet site, www.irs.gov/pub/irs-pdf/f12153.pdf, or by calling, toll-free, 1-800-829-3676.

(v) The taxpayer must affirm any timely written request for a CDP hearing which is signed or alleged to have been signed on the taxpayer's behalf by the taxpayer's spouse or other unauthorized representative by filing, within a reasonable period of time after a request from the IRS, a signed, written affirmation that the request was originally submitted on the taxpayer's behalf. If the affirmation is not filed within a reasonable period of time after a request, the CDP hearing request will be denied with respect to the non-signing taxpayer.

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Q-C6. Where must the written request for a CDP hearing be sent?

A-C6. The written request for a CDP hearing must be sent, or hand delivered (if permitted), to the IRS office and address as directed on the CDP Notice. If the address of that office does not appear on the CDP Notice, the taxpayer should obtain the address of the office to which the written request should be sent or hand delivered by calling, toll-free, 1-800-829-1040 and providing the taxpayer's identification number (SSN or TIN).

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A-C7. If the taxpayer does not request a CDP hearing in writing within the 30-day period that commences on the day after the end of the five business day notification period, the taxpayer foregoes the right to a CDP hearing under section 6320 with respect to the unpaid tax and tax periods shown on the CDP Notice. If the request for CDP hearing is received after the 30-day period, the taxpayer will be notified of the untimely request and of the right to an equivalent hearing. See paragraph (i) of this section.

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(d) * * *

(2) * * *

A-D4. Prior involvement by an Appeals officer or employee includes participation or involvement in an Appeals hearing (other than a CDP hearing held under either section 6320 or section 6330) that the taxpayer may have had with respect to the tax and tax period shown on the CDP Notice. Prior involvement exists only when the taxpayer, the tax liability and the tax period at issue in the CDP hearing also were at issue in the prior non-CDP hearing or proceeding, and the Appeals officer or employee actually participated in the prior hearing or proceeding.

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A-D7. Except as provided in A-D8 of this paragraph (d)(2), a taxpayer who presents in the CDP hearing request relevant, non-frivolous reasons for disagreement with the NFTL filing will ordinarily be offered an opportunity for a face-to-face conference at the Appeals office closest to taxpayer's residence. A business taxpayer will ordinarily be offered an opportunity for a face-to-face conference at the Appeals office closest to the taxpayer's principal place of business. If that is not satisfactory to the taxpayer, the taxpayer will be given an opportunity for a hearing by telephone or by correspondence. In all cases, the Appeals officer or employee will review the case file, which includes the taxpayer's request for a CDP hearing, any other written communications from the taxpayer or the taxpayer's authorized representative, and any notes made by Appeals officers or employees of any oral communications with the taxpayer or the taxpayer's authorized representative. If no face-to-face or telephonic conference or correspondence hearing is held, review of those documents will constitute the CDP hearing for purposes of section 6320(b).

Q-D8. In what circumstances will a face-to-face CDP conference not be granted?

A-D8. A taxpayer is not entitled to a face-to-face CDP conference at a location other than as provided in A-D7 of this paragraph (d)(2) and this A-D8. If all Appeals officers or employees at the location provided for in A-D7 of this paragraph have had prior involvement with the taxpayer as provided in A-D4 of this paragraph, the taxpayer will not be offered a face-to-face meeting at that location, unless the taxpayer elects to waive the requirement of section 6320(b)(3). The taxpayer will be offered a face-to-face conference at another Appeals office if Appeals in the exercise of its discretion would have offered the taxpayer a face-to-face conference at the location provided in A-D7. A face-to-face CDP conference concerning a taxpayer's underlying liability will not be granted if the request for a hearing or other taxpayer communication indicates that the taxpayer wishes only to raise irrelevant or frivolous issues concerning that liability. A face-to-face CDP conference concerning a collection alternative, such as an installment agreement or an offer to compromise liability, will not be granted unless the alternative would be available to other taxpayers in similar circumstances. For example, because the IRS does not consider offers to compromise from taxpayers who have not filed required returns or have not made certain required deposits of tax, as set forth in Form 656, "Offer in Compromise," no face-to-face conference will be offered to a taxpayer who wishes to make an offer to compromise but has not fulfilled those obligations. A face-to-face conference need not be granted if the taxpayer does not provide the required information set forth in A-C1(ii)(E) of paragraph (c)(2). See also A-C1(iii) of paragraph (c)(2).

(3) Examples. --The following examples illustrate the principles of this paragraph (d):

Example 1. Individual A timely requests a CDP hearing concerning a NFTL filed with respect to A's 1998 income tax liability. Appeals employee B previously conducted a CDP hearing regarding a proposed levy for the 1998 income tax liability assessed against individual A. Because employee B's only prior involvement with individual A's 1998 income tax liability was in connection with a section 6330 CDP hearing, employee B may conduct the CDP hearing under section 6320 involving the NFTL filed for the 1998 income tax liability.

Example 2. Individual C timely requests a CDP hearing concerning a NFTL filed with respect to C's 1998 income tax liability assessed against individual C. Appeals employee D previously conducted a Collection Appeals Program (CAP) hearing regarding a NFTL filed with respect to C's 1998 income tax liability. Because employee D(s prior involvement with individual C's 1998 income tax liability was in connection with a non-CDP hearing, employee D may not conduct the CDP hearing under section 6320 unless individual C waives the requirement that the hearing will be conducted by an Appeals officer or employee who has had no prior involvement with respect to C's 1998 income tax liability.

Example 3. Same facts as in Example 2, except that the prior CAP hearing only involved individual C's 1997 income tax liability and employment tax liabilities for 1998 reported on Form 941. Employee D would not be considered to have prior involvement because the prior CAP hearing in which she participated did not involve individual C's 1998 income tax liability.

Example 4. Appeals employee F is assigned to a CDP hearing concerning a NFTL filed with respect to a trust fund recovery penalty (TFRP) assessed pursuant to section 6672 against individual E. Appeals employee F participated in a prior CAP hearing involving individual E's 1999 income tax liability, and participated in a CAP hearing involving the employment taxes of business entity X, which incurred the employment tax liability to which the TFRP assessed against individual E relates. Appeals employee F would not be considered to have prior involvement because the prior CAP hearings in which he participated did not involve the TFRP assessed against individual E.

Example 5. Appeals employee G is assigned to a CDP hearing concerning a NFTL filed with respect to a TFRP assessed pursuant to section 6672 against individual H. In preparing for the CDP hearing, Appeals employee G reviews the Appeals case file concerning the prior CAP hearing involving the TFRP assessed pursuant to section 6672 against individual H. Appeals employee G is not deemed to have participated in the previous CAP hearing involving the TFRP assessed against individual H by such review.

(e) Matters considered at CDP hearing