Legal Memorandum: Procedure for CDP Hearing

Issue: Under federal law, what is the procedure if a taxpayer requests a collection due process (CDP) hearing?

If requested by a taxpayer, a collection due process (CDP) hearing is required prior to collection of a tax liability by levy and upon filing of a notice of federal tax lien.  See 26 U.S.C. §§ 6320 TA l "26 U.S.C. § 6320" s "26 U.S.C. § 6320" c 2 , 6330 TA l "26 U.S.C. § 6330" s "26 U.S.C. §§ 6320, 6330" c 2 .  Notice of a right to a hearing prior to the levy, or upon filing of a notice of tax lien, must be sent to the taxpayer.  Id. §§ 6320(a), 6330(a) TA s "26 U.S.C. § 6330(c)(1), (3)(A)" . 

The law also guarantees the taxpayer a fair hearing before an impartial officer from the IRS Office of Appeals.  Id. §§ 6320(b) TA s "26 U.S.C. § 6320" , 6330(b) TA s "26 U.S.C. §§ 6320, 6330" .  At that hearing, the taxpayer may raise “any relevant issue relating to the unpaid tax or the proposed levy,” including “challenges to the appropriateness of collection actions” and “offers of collection alternatives, which may include . . . an offer-in-compromise.”  Id. § 6330(c)(2)(A TA s "26 U.S.C. § 6330(c)(1)" ).  An OIC was implemented in this case, but later revoked and Petitioner’s tax obligation reinstated.

The court’s holding in Robinette v. Commissioner, 123 T.C. 85 (2004), rev’d on other grounds, 439 F.3d 455 (8th Cir. 2006 TA l "Robinette v. Commissioner, 123 T.C. 85 (2004), rev’d on other grounds, 439 F.3d 455 (8th Cir. 2006" s "Robinette v. Commissioner, 123 T.C. 85 (2004), rev’d on other grounds, […]