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Part 8. Appeals

Chapter 22. Collection Due Process

Section 2. Technical Review

8.22.2  Technical Review

8.22.2.1  (01-01-2006)
Collection Due Process Overview

  1. This Internal Revenue Manual provides technical instructions for the following employees working, closing, and reviewing Collection Due Process (CDP) and Equivalent Hearing (EH) cases and Collection Due Process Timeliness Determination cases:

    • Settlement Officers

    • Appeals Officers

    • Appeals Account Resolution Specialists

    • Tax Examiners

    • Clerical staff

    • Managers

8.22.2.1.1  (03-11-2009)
IRM Part 5 primary authority for CDP and EH resolution

  1. IRM Part 5 (Collection Process) is the primary authority regarding resolutions in CDP/EH cases. Refer to Part 5 for the following guidance. The following list is not all-inclusive:

    • conducting financial analysis

    • investigating Offers in Compromise

    • entering into installment agreements

    • reporting accounts as currently not collectible

    • resolving lien issues

    • making lien determinations

8.22.2.1.2  (03-11-2009)
Concern or Disagreement with Appeals CDP/EH Resolution

  1. If there is concern or disagreement with respect to a decision reached by Appeals in a CDP or EH case, local management in Collection and Appeals should work to address concerns and resolve disagreements. If a resolution cannot be reached informally at the local level, then a formal process is available to elevate concerns and issues to Appeals. (For more information, see Disagreement with Appeals Decision in IRM 5.1.9).

8.22.2.1.3  (03-11-2009)
Appeals Account Resolution Specialists (AARS)

  1. The Appeals Account Resolution Specialist (AARS) position was created in 2001. AARS were previously called "Screeners" and "Collection Specialists" .

  2. On November 1, 2006, the AARS position was added to Delegation Order 8-a "Authority To Conduct Hearings and Make and Approve Certain Determinations Under IRC 6320 and IRC 6330" .

  3. AARS duties include, but are not limited to:

    1. Screening and developing cases for Settlement Officers

    2. At the request of the hearing officer, perform routine research using various systems such as ALS, AOIC, AIS, ICS, PACER

    3. Administratively working less complex CDP/EH cases based on Case Grading grid

    4. Scheduling appointments using the Professional Appointment Scheduling System (PAS)

    5. Working Separate Timeliness Determination cases (Case TYPE = CDPTD)

      Note:

      CDPTD cases are only worked by AARS in Memphis, TN, Hartford, CT, and St. Paul, MN.

  4. A group of AARS in Fresno works Closed Case Referrals and an Appeals Customer Service Line. The Fresno group resolves cases closed by Appeals that have account-related problems. The AARS does not change determinations or decisions. Following are examples of the types of problems that an AARS can resolve:

    1. Innocent Spouse allocations including the mirroring process

    2. Tax Court Decision application

    3. Misapplied/Missing payment research

    4. Installment Agreements including DDIA’s & PPIA’s

    5. Currently Not Collectable issues

    6. Erroneous Refunds

    7. Levy/Lien issues

    8. Offer In Compromise processing

    9. Excess Collection issues

    10. Account Freezes

    11. Correction of Unpostable Transaction Codes

    12. Processing of Form 3870

    13. Trust Fund Recovery Penalty issues

  5. AARS follow all documentation and review requirements when they work less complex CDP/EH cases. See IRM 8.22.2.2.4.

  6. Screening duties include, but are not limited to, verifying the following:

    1. Information on Case Summary Card and taking corrective actions

    2. That the request for a hearing (Form 12153 or other written request) was signed by the taxpayer or the taxpayer’s authorized representative

    3. That the type of tax and tax periods on the Case Summary Card match the periods on the CDP notice

    4. That the Statute Suspension (TC 520) and closing code (76/77) on a timely request was correctly input

    5. That the Statute Suspension (TC 520) and closing code (76/77) was not placed on Equivalent Hearing modules

    6. That the hearing request was correctly added to the CDP Tracking System and is in stage 4

    7. The correct feature codes

  7. AARS documents in the Case Activity Record their receipt of a case for screening and what, if any, corrective actions they took.

  8. During the screening process AARS may solicit a withdrawal from the taxpayer on cases where the collection alternative the taxpayer sought was granted by Collection and a hearing is not necessary. AARS must use Letter 4388 to solicit a withdrawal. There is a section later in this IRM that contains procedures for CDP Withdrawals. See IRM 8.22.2.2.1.

8.22.2.1.4  (03-11-2009)
Disaster Relief CDP cases

  1. Appeals follows the guidelines contained in the Disaster Relief Memorandum issued by the Director, Communications, Liaison and Disclosure (CLD), when dealing with Appeals taxpayers in the disaster-covered areas.

  2. The following websites and IRM sections provide the relevant information:

    1. http://www.icce.irs.gov/fema/ for information on the IRS Disaster Assistance Program.

    2. http://appeals.web.irs.gov/tech_services/disaster/default.htm for current year memorandums

    3. IRM 25.16.1.16 provides the "Role of Appeals" in working Disaster Relief cases.

    4. IRM 8.7.1.11, Disaster Relief Cases.

  3. Add Feature Code "DR" to cases that qualify for disaster relief. See IRM 8.22.2.2.4.4.

8.22.2.1.5  (03-11-2009)
Limited Liability Companies (LLC) and Collection Due Process

  1. A limited liability company (LLC) is a hybrid entity created under State law that has characteristics of both a partnership and a corporation. It is similar to a:

    • corporation in that the owners have limited personal liability for negligent acts and LLC debts.

    • partnership in that it provides management flexibility and may provide the benefit of pass-through taxation of income.

  2. RO's must identify the taxpayer prior to issuing Letter 1058(DO), Final Notice, Notice of Intent to Levy and Notice of Your Right to a Hearing, so the correct entity is notified of the right to a Collection Due Process hearing:

    • When the LLC is the taxpayer, the CDP notice is issued in the name of the LLC and the LLC itself has the right to a CDP hearing.

    • When the owner is the taxpayer, the CDP notice must be issued in the name of the member/owner and the member/owner has the right to a CDP hearing.

  3. The CDP notice is an exception to the Service’s position that notice to the disregarded LLC is equivalent to notice to the owner when the owner of the LLC is the taxpayer. To ensure the owner’s CDP rights are properly protected, notice to the owner is required even when the CDP notice was previously issued in the name of the disregarded LLC. If the name of the liable taxpayer was not included on the original CDP notice, the RO must:

    1. request input of a TC 972 AC 069 to reverse the original notice

    2. request a new CDP notice

    3. document the ICS history to explain this action

  4. If the identity of the taxpayer changes due to a change in classification or regulations, the RO :

    1. issues one CDP notice to the LLC for the tax period(s) when the LLC is liable and

    2. issues a separate CDP notice to the owner for the tax period(s) when the owner is liable

  5. Regulation changes make the otherwise disregarded LLC liable for all employment taxes on wages paid on or after 1/1/09 and require that employment taxes be reported in the name and EIN of the LLC, beginning with the 200903 tax period. The result is there will be entities on the Master File where the owner of the LLC is liable for employment tax modules through 200812, and the LLC itself will be liable for employment tax modules beginning with 200903, all assessed under the same name and EIN.

    Note:

    Because of changes in LLC ownership or election, there may be situations where the liable taxpayer changed from one tax period to the next for employment tax periods ended prior to January 1, 2009.

  6. It is important the liable taxpayer be identified on IDRS for each tax period. Once the identity of the liable taxpayer is determined, the Service employee who makes the determination sends a Form 4844, by secure E-mail, to their processing unit to request input of the appropriate TC 971 Action Code for each module, as follows:

    TC AC Explanation
    971 364 LLC is the liable taxpayer for this tax period
    971 365 Single member/owner is the liable taxpayer for this tax period
    971 366 Liable taxpayer changed during this tax period

  7. The Letter 1058 is legally sufficient for the collection of tax liabilities from a disregarded single-owner LLC when the notice lists only the name of the LLC's owner and not his/her Social Security Number (SSN) or Employer Identification Number (EIN).

    1. IRC 6320 and IRC 6330 and the applicable regulations do not require a Taxpayer Identification Number (TIN), whether an EIN or SSN, on a CDP notice.

  8. A written request for a CDP hearing that includes the single owner's name and the LLC's EIN but not the single owner's TIN, SSN or EIN, is not a valid request. The CDP regulations require the taxpayer to include an identifying number in the written CDP hearing request. Thus, if a single owner of a disregarded LLC fails to include his TIN, SSN or EIN, and lists only the LLC's EIN, then the CDP hearing request is invalid. Collection will give the taxpayer a reasonable amount of time to make corrections to a timely written CDP hearing request that does not satisfy all the requirements under the regs. Do not return a hearing request if the TIN information can be obtained from internal sources. See IRM 8.22.2.2.4.8. That subsection is entitled Imperfect Hearing Requests.

  9. A disregarded single-owner LLC is carded-in on ACDS as the case appears on IDRS. The information on ACDS must match IDRS.

  10. Where the hearing officer determines the LLC entity is a disregarded single owner, prepare the ACDS update form and request that APS:

    1. add the single-owner name to the name line of the ACDS entity section BEHIND the LLC name

      Example:

      xxxxx LLC, xxx xxxxx, owner

    2. add the single-owner TIN (SSN or EIN) to the TIN2 field

  11. See IRM 5.1.21 - Limited Liability Companies - for more information on LLC's.

8.22.2.1.6  (03-11-2009)
Identity Theft

  1. During a CDP hearing a taxpayer may claim the delinquent tax liability in whole or in part resulted from incidents of identity theft.

  2. IRC 6330(c)(2)(b) governs whether the taxpayer is able to contest the liability as part of the CDP hearing. See IRM 8.22.2.2.11.

    Note:

    In situations where the liability is precluded from consideration in CDP but the taxpayer clearly demonstrates the tax liability is the result of identity theft, the Appeals employee can consider the liability issue under its general authority.

  3. The Identity Theft and Incident Management (ITIM) office was established to address the increase in identity theft and data loss trends and the need for an IRS authority on policy, procedure, roles and governance policy.

  4. The following website, http://irweb.irs.gov/AboutIRS/bu/pipds/pip/itim/default.aspx, discusses ITIM's programs.

  5. Follow established procedures and use good judgement to secure suitable documentation that sufficiently demonstrates what portion of the disputed tax liability is attributable to the identity theft act.

  6. If you are the first identifier of ID theft, prepare Form 4844 and request input of TC 971 with AC 501. Route the Form 4844 to your servicing Appeals Processing Services (APS) following local procedures.

  7. The following IRM sections provide guidance and procedures for working identity theft cases:

    1. IRM 8.1.6.4, Standard Identity Theft

    2. IRM 5.1.12.2, Identify Theft

    3. IRM 5.19.1.9, Identity Theft Overview

    4. IRM 5.9.5.12, Identity Theft

    5. IRM 21.6.2, . Adjusting TIN-related problems

  8. Prepare Form 3870 for any needed adjustment. See IRM 8.22.2.4.3.

  9. Do not grant relief if the information submitted by the taxpayer is insufficient to prove ID theft. Request an advisory opinion as needed. Clearly document the basis for your determination.

  10. Add Feature Code "ID" to cases with ID Theft as an issue. See IRM 8.22.2.2.4.4.

8.22.2.2  (03-11-2009)
Collection Due Process (CDP) Hearing under IRC 6330 and/or IRC 6320

  1. The IRS Restructuring and Reform Act of 1998 (RRA 98) gives taxpayers the right to a Collection Due Process hearing (CDP) with Appeals when they receive one of the following notices:

    1. Notice of Federal Tax Lien Filing and Your Right to A Hearing Under IRC 6320

    2. Final Notice - Notice of Intent To Levy and Notice of Your Right To A Hearing

    3. Notice of Levy and Notice of Your Right To A Hearing

    4. Notice of Jeopardy Levy and Right of Appeal

    5. Notice of Levy on Your State Tax Refund - Notice of Your Right to a Hearing

  2. The following items are sent with the CDP notice and inform Taxpayers about their CDP appeal rights:

    1. Publication 1660, Collection Appeal Rights,

    2. Publication 594, The IRS Collection Process,

    3. Form 12153, Request for a Collection Due Process or Equivalent Hearing.

  3. IRC 6320 gives notice to the taxpayer, after the filing of a Notice of Federal Tax Lien (NFTL), that the taxpayer has a right to a hearing with Appeals if it is in connection with the first NFTL filed for the tax periods with respect to a particular type of tax.

  4. IRC 6330 generally gives notice to the taxpayer of a right to a hearing before taking the first levy action for a particular tax and period.

  5. The following are IRC 6330(f)exceptions to a right to a hearing before taking levy action. The taxpayer is offered a post-levy hearing in the following:

    1. levy on state tax refund,

    2. if collection of tax is in jeopardy,

    3. "disqualified" employment taxes

  6. The purpose of the CDP hearings under IRC 6320 and IRC 6330:

    1. To give the taxpayer an opportunity early in the collection process to work with an independent hearing officer to resolve the collection of the taxpayer's liability.

    2. A determination by the hearing officer as to whether the NFTL should remain filed or whether to allow the proposed levy.

  7. IRC 6330(c)(3) requires the hearing officer to take into consideration the "Big Three" factors in making a CDP determination. See IRM 8.22.2.2.16.4.

  8. Taxpayers are entitled to one IRC 6320 (Lien) hearing and one IRC 6330 (Levy) hearing for each taxable period.

    Exception:

    An exception to only one hearing per type of tax and tax period rule for IRC 6320 and IRC 6330 is if the IRS assesses an additional tax liability for the same tax period other than accruals of interest and penalties.

    Note:

    Collection is unable to, systemically, isolate an additional assessment when issuing the CDP levy notice. The CDP levy notice for the subsequent assessment will include the balance for the whole period. If the taxpayer requests a CDP hearing, the CDP hearing only covers the subsequent assessment if the taxpayer already had an opportunity for a hearing on the original assessment.

  9. Appeals may hold hearings under IRC 6320 and IRC 6330 at the same time, if the timing of the two notices allows a second notice's hearing request to be combined with the hearing on the first notice.

  10. IRC 6330(e) provides for suspension of the collection statute expiration date (CSED) beginning the date the IRS received a timely hearing request. The suspension ends either on the date the IRS receives a written withdrawal of the hearing request, when the determination from the CDP hearing request becomes final by expiration of the time for seeking review, or upon the exhaustion of any right to appeal. The suspension period is added to the CSED. If 90 days are not remaining on the CSED when the determination becomes final, the CSED is systemically extended to equal 90 days.

  11. Taxpayers must request a CDP hearing in writing, preferably on Form 12153.

  12. If the taxpayer did not timely request a CDP hearing with Appeals, then the taxpayer has the right to request an "Equivalent Hearing" . See IRM 8.22.2.2.21.

  13. The taxpayer may raise any non-frivolous issue relating to the NFTL or the proposed levy. See IRM 8.22.2.2.16.4.2.

  14. An issue may not be raised at the IRC 6320 or IRC 6330 hearing if the taxpayer participated meaningfully in any previous administrative or judicial proceeding where the same issue was already raised and considered. See IRM 8.22.2.2.10.1.

  15. The taxpayer may seek judicial review of the Notice of Determination by filing a petition in the United States Tax Court. See IRM 8.22.2.2.15.

8.22.2.2.1  (03-11-2009)
CDP Withdrawals

  1. Taxpayers may withdraw their requests for a CDP or Equivalent Hearing for a number of reasons. The most common reasons are:

    1. They are able to, or prefer to, resolve their issues with Collection,

    2. They realize they are unable to resolve their issues with Appeals (generally due to compliance issues or their inability to raise the liability issue in Appeals).

  2. Form 12256, Withdrawal of Request for Collection Due Process or Equivalent Hearing, may be used to withdraw a CDP and/or equivalent hearing request.

    Note:

    The use of Form 12256 is preferred, however, any written request clearly indicating a request to withdraw will be honored.

    Note:

    An equivalent hearing request may also be withdrawn verbally.

  3. If Collection receives a withdrawal from the taxpayer after the case has been sent to Appeals, Collection forwards the withdrawal to Appeals to be associated with the CDP case.

    Note:

    Revenue Officers or ACS should not send any information to Appeals on cases they resolve and secure a withdrawal.

  4. Send the taxpayer Letter 4383 acknowledging the written or verbal withdrawal on ALL cases where Appeals sent the taxpayer the Uniform Acknowledgement Letter or combination UAL-Substantive Contact Letter. Letter 4383:

    1. Provides the taxpayer the date Appeals received the withdrawal

    2. Provides APS the date Appeals received the withdrawal; the withdrawal-received date is used for input of the TC 521 cc 76/77

    3. Can be signed by either the hearing officer or the Collection Specialist.

  5. Appeals does not send the taxpayer Letter 4383 if the withdrawal is received before Appeals acknowledges receipt of the case with either the UAL or combination UAL-SCL.

  6. The taxpayer may withdraw the CDP request at any point up to the issuance of the Notice of Determination or Decision Letter.

    1. If a written withdrawal is received, date-stamp the withdrawal with the date received and document the received date in the case activity record.

    2. If the withdrawal is verbal, document the conversation in the case activity record.

    Note:

    Appeals documentation must make it clear the taxpayer does not want a resolution from Appeals and understands what rights are given up by withdrawing.

  7. The hearing officer MUST document the following if the taxpayer withdraws the hearing request AFTER the hearing officer conducts the initial analysis:

    • the hearing officer's impartiality

    • the legal and administrative review

    • if a timely hearing, the accuracy of the TC 520

    Note:

    This is mandated documentation during initial analysis. See IRM 8.22.2.2.4.

  8. The screener or the hearing officer may solicit a withdrawal of a resolved case prior to issuance of the Substantive Contact Letter where the collection alternative the taxpayer seeks has been granted by Collection and a CDP/EH Hearing is not necessary provided that the taxpayer has not disputed the liability.

    1. Use Letter 4388 to solicit a withdrawal

    2. Allow the taxpayer 14 days from the date of the letter to withdraw the request

  9. If the taxpayer does not withdraw the CDP/EH hearing request, use substantive contact letter procedures. See IRM 8.22.2.2.6..

    Note:

    If the AARS solicits a withdrawal, doesn't receive it, AND keeps the case to work, the AARS must issue the SCL within 30 days of their assignment.

  10. Do not solicit a withdrawal from the taxpayer if the taxpayer reaches a resolution with Appeals. For retained jurisdiction purposes, it is only appropriate to solicit a Form 12257,, Summary Notice of Determination, Waiver of Right to Judicial Review of a Collection Due Process Determination and Waiver of Suspension of Levy Action.

  11. Use Form 5402 to return the case to Collection, regardless of whether Collection or Appeals secures the withdrawal. There is no need to prepare an ACM.

  12. Use closing code 16 for both CDP and EH requests.

  13. CDP Tracking System codes to use:

    • Reason Code = WD

    • Resolution Reason Code = OT

  14. See the "CARATS Operational Definitions" on the ACDS Utilities menu for the final CARATS action codes.

8.22.2.2.2  (03-11-2009)
Premature Referrals: Non-processable Requests or Erroneous CDP notices

  1. Return non-processable requests or requests based on erroneous CDP Notices to Collection as Premature Referrals.

  2. Use closing code 20 on Form 5402.

  3. CDP Tracking System entries:

    • Reason Code = PR

    • Resolution Reason Code = IV (Invalid Request/Premature Request)

8.22.2.2.2.1  (03-11-2009)
Non-Processable Requests

  1. The following are non-processable criteria; the cases are returned to Collection as Premature Referrals (PRs):

    • Where no CDP notice was issued

    • Taxpayer never signed the Form 12153

      Note:

      If only one spouse signs the CDP hearing request with respect to a joint liability, consider the hearing request valid for the signing spouse but not for the non-signing spouse.

    • Form 12153 signed by person who is not authorized to represent the taxpayer

    • Hearing request fails to list a reason for the dispute (failure to list a reason includes failure to check a box)

    • CDP or EH case already considered in Appeals in which a Notice of Determination or Decision Letter was issued or taxpayer signed a Form 12257

    • Does not have a valid SSN, ITIN or EIN and a valid TIN cannot be obtained from IDRS

  2. The following cases are no longer considered premature referrals. Instead, work these cases as Separate Timeliness Determinations:

    • Late filed CDP hearing request where taxpayer or authorized representative failed to request an Equivalent Hearing.

    • Late filed EH CDP request; filed after the one-year cut-off provided for in the new CDP regulations.

  3. See IRM 8.22.2.2.4.10. That section contains procedures for separate timeliness determinations.

8.22.2.2.2.2  (03-11-2009)
Erroneous CDP Notices

  1. Appeals rescinds CDP notices it determines were issued in error. Erroneous CDP notices are when the requested lien or levy action is prohibited by law. Examples are when the taxpayer has:

    1. a pending offer-in-compromise

    2. a pending installment agreement

    3. a pending innocent spouse request

    4. is in a combat zone

    5. a pending bankruptcy

  2. In all instances, the rescission is unilateral. The appropriate letters to use are:

    • Letter 3789C, Rescission Letter - Notice of Lien Filed Erroneously - No Withdrawal Required or

    • Letter 3790C, Rescission Letter - Notice of Intent to Levy Sent in Error - No Withdrawal Required.

  3. If the taxpayer requests a CDP hearing as a result of an erroneously issued CDP notice and the CDP notice is rescinded, advise the taxpayer of the following:

    1. since the CDP notice is rescinded, the CDP request is non-processable

    2. the taxpayer does not have to withdraw the request for the CDP hearing

    3. the taxpayer will have a right to request a CDP hearing if and when a CDP notice is properly issued unless a previous CDP Notice has already been properly issued

  4. In the "Remarks" section of Form 5402, instruct APS to input TC 972 AC 069 using the same date of the rescinded TC 971 AC 069.

8.22.2.2.3  (03-11-2009)
Field/ACS/Field Assistance CDP procedures

  1. Collection employees should only issue one CDP Levy notice per tax period unless an additional amount of tax is assessed (other than interest and penalty accruals).

    Exception:

    Joint liabilities where a CDP levy notice is issued separately to husband and wife or partners in a partnership.

  2. IRC 6330(a) does not require the Service to identify assets on which to levy when it sends the CDP notice. Therefore, do not return a CDP hearing request as a premature referral and do not rescind the CDP notice because assets have not been identified.

  3. Transaction Code (TC) 971, Action Code (AC) 069 is input after the Service mails the levy CDP notice.

  4. The following action codes, if available, show the result of issuing the notice:

    Note:

    It is not mandatory to show the results of issuing the notice; as such these codes may not be on the module.

    • AC 066 - the return receipt was signed (not necessarily by the taxpayer) so the notice was delivered. If the TC 971 AC 066 and the TC 971 AC 069 have the same date, the notice was given in person.

    • AC 067 - delivery was refused or the notice was unclaimed. If the TC 971 AC 067 and the TC 971 AC 069 have the same date, the notice was left at the taxpayer's home or business address.

    • AC 068 - the notice was returned undelivered.

  5. Collection inputs a TC 972 to reverse a TC 971 AC 069 where the planned CDP Notice is not issued. If more than one CDP notice is issued on a given CDP period only the first CDP notice is offered a CDP hearing.

  6. Collection may input a second TC 971 AC 069 and not reverse the first TC 971 AC 069 if there is no record of the delivery status of the first TC 971 AC 069 by one of the following:

    1. no posting of action codes 066, 067 or 068

    2. recordation of the USPS received date on the CDP Certified Mail System (CDP-CMS). This is done by requesting a copy of the case status report.

    3. recordation of the USPS received date on the certified mail list. This is done by requesting a copy of the certified mail list.

    If any of the above cannot be verified, ACS uses the second TC971 AC 069 to determine timeliness

  7. Once a Form 12153 is filed to request a hearing, Collection may work with the taxpayer for up to 90 days if the taxpayer is willing. If the taxpayer chooses not to work with Collection, the case is sent directly to Appeals.

  8. Levy action:

    1. is suspended by statute on tax periods that are the subject of the CDP hearing.

      Exception:

      New levies may be issued during a post-levy CDP hearing if the levy is a disqualified employment tax levy (DETL), a jeopardy levy, or state income tax refund levy.

    2. can continue on periods not subject to the CDP hearing, if all the proper procedures have been followed.

    3. is suspended by policy on Equivalent Hearing tax periods.

    4. is not required to be suspended during a timely-filed request for an IRC 6320 Collection Due Process (CDP) hearing if all the proper procedures have been followed. As a general rule, levy action is suspended pending the Appeals determination.

    5. can continue in joint liability situations where only one spouse has requested a CDP hearing with respect to the spouse who has not requested a hearing. This will likely occur in situations where the spouses are separated or divorced.

  9. Collection may initiate the appropriate action to protect the government's interest when it is identified that collection is at risk. Evidence of risk is:

    1. dissipation of assets

    2. imminent CSED

    3. pyramiding of tax

  10. Collection takes the following steps when levy action is planned:

    1. Review TXMODs of CDP periods to determine whether there is a pending offer (TC 480) or an installment agreement (TC 971 AC 043) that would be grounds to delay or prohibit enforcement.

    2. Contact the Appeals Team Manager of the assigned hearing officer via E-mail regarding planned levy action if there is no evidence on TXMODs of actions in Appeals that would be grounds to delay or prohibit enforcement.

  11. As a general practice, Collection does not file liens in another location on the same type of tax and tax periods during a CDP Lien hearing. Collection notifies Appeals in the same manner as (10)(b) above if they decide to file a lien.

  12. Collection prepares Form 12153-A (field) or Form 12153-B (ACS), CDP Referral Form, for every CDP file Collection sent to Appeals and provides the following information as available:

    1. Request for CDP Hearing (Form 12153 or other written request)

    2. Type of tax, periods, and the amount of the balance due.

    3. Dates of contacts with taxpayer or representative.

    4. Key issues discussed, proposals made by either party, deadlines established.

    5. Reason for the lien or levy action (taken or proposed).

    6. Were alternative collection actions discussed? Why were these options not a viable solution?

    7. Taxpayer's compliance with filing, federal tax deposits, estimated tax payments.

    8. Information regarding taxpayer's ability to pay.

    9. Any prior collection activity relevant to the Revenue Officer's action.

    10. Identify any in-business trust fund liability cases.

  13. In addition, when available, the case file should contain the following documents and documentation:

    1. Asset verification.

    2. Financial statements.

    3. Any other information that helps Appeals in its determination.

    4. Correspondence between the taxpayer/representative and the Service.

      Note:

      ACS provides copies of Desktop Integration (DI) screens. ACS does not provide copies of ACS screens since ACS screens are available through eCase.

  14. The Collection function enters the date the request for a CDP hearing was received in box 4 on Form 12153-A/B.

  15. TC 520, which starts the suspension of the collection statute, is input with one of the following closing codes:

    1. TC 520 CC 76 for CDP lien cases (DPLN)

    2. TC 520 CC 76 for CDP lien and levy hearing request (DPL2)

    3. TC 520 CC 77 for CDP levy cases (DPLV)

  16. Responsibility for input of the TC 520 cc 76/77 is:

    1. ACS-sourced cases - ACS inputs the TC 520 cc 76/77 when the case is transferred to Appeals, simultaneous with the CDPTS update to Stage 3.

    2. Field-sourced cases - APS inputs the TC 520 cc 76/77 when the case is received in Appeals, simultaneous with the CDPTS update to Stage 4.

  17. As of January 1, 2001, the CDP CSED is systemically calculated and updated when both the TC 520 and TC 521 are input after that date.

  18. The exception to systemic update of the CSED are IMF accounts involving joint liabilities where only one spouse has requested the hearing. For MFT 30 accounts, the appropriate IRM CSED TIN indicator must be input with the TC 520. The indicators are:

    1. "P" - CSED suspended only for the primary TIN spouse.

    2. "S" - CSED suspended only for the secondary TIN spouse.

    3. "B" - CSED suspended on both primary and secondary TINS. The CSED is systemically updated when the CSED indicator is "B."

  19. CSED suspension information when either Primary (P) or Secondary (S) request hearing:

    1. CSED suspended for the particular spouse when the CSED indicator is "P" or "S."

    2. The module, however, will reflect the earliest CSED.

    3. The CSED can be updated by the input of a TC 550 with action code 10 reflecting the new CSED date.

    4. The latest CSED is updated for multiple assessment tax periods.

  20. The following TC 971 action codes identify automated levy programs and may appear in CDP or EH cases:

    Figure 8.22.2-1

    TC 971 ACTION CODES THAT IDENTIFY AUTOMATED LEVY PROGRAMS

    TC 971 Action Code Reason
    Action Code 600 SITLP (State Income Tax Levy Program) Input annually when in program
    Action Code 601 AKPFD (Alaska Permanent Fund Dividend Levy Program) Input annually when in program
    Action Code 061 FPLP (Federal Payment Levy Program) Input each time the account goes to FPLP

8.22.2.2.3.1  (03-11-2009)
CDP and Equivalent Hearing Fast Track Mediation (FTM)

  1. FTM is available on field Collection cases to taxpayers who qualify for a CDP or Equivalent Hearing:

    1. a taxpayer can request FTM after a CDP notice is issued.

    2. a request for FTM does not extend the time for filing a request for a collection due process hearing.

    3. taxpayers requesting FTM during the time period for filing a CDP hearing request must also submit a hearing request to preserve their right to a hearing.

    4. after a request for a CDP hearing is filed, taxpayers can request FTM before the case is transferred to Appeals.

  2. For a CDP case to qualify for FTM, the taxpayer must meet the following requirements. If the taxpayer meets these requirements, the Revenue Officer may provide the taxpayer Publication 3605, Fast Track Mediation, and offer the taxpayer the option of using FTM to expedite resolution of the case. However the taxpayer must -

    1. be current with filing requirements and federal employment tax deposits.

    2. present complete information regarding the proposed resolution, such as complete financial information.

  3. Prior to FTM the taxpayer may first request a conference with the manager. If resolution is not reached, the taxpayer can submit a request for FTM. Both the taxpayer and the RO must sign an agreement to mediate prior to mediation being scheduled. Collection does not have to agree to mediation. However, denial of a mediation request requires approval of the group manager and concurrence by the second level manager. The basis for the denial is communicated to the taxpayer and documented in the case history.

  4. If FTM is recommended, Collection employees are responsible for completing Form 13369, Agreement to Mediate, and a brief summary of issues, done in a memorandum form. Collection forwards both documents to Appeals. Appeals employees trained as mediators conduct the session; however, they do not have settlement authority. Both parties must agree in order to reach a resolution.

  5. Advise the taxpayer that if mediation results in an agreement between the taxpayer and Collection, they must withdraw the hearing request to finalize the agreement. If the taxpayer does not withdraw the request for a hearing, the case goes forward to Appeals as a CDP or equivalent hearing.

  6. Collection should forward to the local Appeals Office within three business days of obtaining the taxpayer's signature the signed Agreement to Mediate and summary of issues. Jurisdiction and statute of limitation responsibility remains with Collection and, therefore, the case file is not forwarded to Appeals. Local Appeals and Collection offices work out their own procedures for prompt transmittal of cases to the local Appeals office.

  7. Collection sends a copy of the Agreement to Mediate to the taxpayer or their representative:

    1. the mediator attempts to schedule the mediation session with the taxpayer and Collection within five business days after the case is assigned in Appeals.

    2. the mediation begins with an initial joint discussion at which all parties are present.

    3. both the taxpayer and Collection are given time to present their position.

    4. after the initial joint discussion, the mediator may hold individual discussions with the parties.

    5. at any time, either party may withdraw from the process prior to reaching a resolution by notifying the other party and the mediator in writing.

  8. The entire process normally takes an average of 30-40 calendar days to complete. If the mediation session is not held within a reasonable amount of time, the mediator may consider returning the request. The mediator attempts to bring the parties to a mutual resolution of the issues during the mediation session. If, after a reasonable time, it is apparent the parties will not reach resolution, the mediator may terminate the mediation session and the case can be referred to Appeals for the CDP hearing.

  9. Refer to Rev. Proc. 2003-42, 2003-1 C.B. 1047 and SB/SE - Appeals Fast Track Mediation Procedures, for additional information.

  10. Add Feature Code "FT" to CDP WUNO.

8.22.2.2.3.2  (10-30-2007)
Ex Parte Communications

  1. Revenue Procedure 2000-43, 2000–2 C.B. 404, provides for the prohibition of certain ex parte communications that take place between Appeals and another Service function without the participation of the taxpayer or the taxpayer's representative.

  2. Not all ex parte communications are prohibited.

    Example:

    Appeals and other Service functions may communicate regarding ministerial, administrative, or procedural matters that do not address the substance of the issues or positions taken in the case.

  3. Appeals must give the taxpayer/representative the opportunity to participate in any discussions with another Service function which concern matters beyond those that are:

    • ministerial

    • administrative

    • procedural

  4. The taxpayer/representative can waive the ex parte prohibition.

  5. Prohibited ex parte communications include discussions about the:

    • accuracy of the facts presented by the taxpayer and the relative importance of the facts to the determination

    • relative merits or alternative legal interpretations of authorities cited in a protest or in a report prepared by the originating function

    • originating function's perception of the demeanor or credibility of the taxpayer or the taxpayer's representative

  6. The hearing officer must share a prohibited ex parte communication received orally or in writing from the IRS (Collection or Examination) with the taxpayer or his representative as soon as possible.

  7. If the hearing officer promptly provides the information to the taxpayer and gives them an opportunity to comment on the information before using the information in their determination, then it is not a prohibited ex parte communication.

  8. If a prohibited ex parte communication is made orally or in writing, give the taxpayer an opportunity to respond to the information.

    Note:

    Information in the Collection or Examination administrative file written prior to the CDP hearing is not a prohibited ex parte communication. Ex parte communications can only occur during the CDP hearing process.

    Example:

    The taxpayer submitted a doubt as to collectibility OIC. The SO requested, through an Appeals Referral Investigation, assistance from Collection in conducting an investigation of the taxpayer’s assets and an evaluation of the OIC. The SO received from the offer specialist the offer file, which included a recommendation for rejection, income and expense table, asset equity table and a revenue officer’s (RO) findings. Before reviewing these documents, the SO has them copied and sent to the taxpayer with a letter requesting comments from the taxpayer. Under Rev. Proc. 2000-43, oral or written communications from a function outside of Appeals that discusses the relative strengths and weaknesses of an issue or case is an ex parte communication. As a result, the offer specialist’s recommendation and supporting documents and the RO’s findings are ex parte communications that must be given to the taxpayer at the same time as they are given to the SO.

    Example:

    An SO is reviewing history notes entered in Integrated Collection System (ICS) by the revenue officer (RO) who has been assigned to collect the liability subject to the CDP hearing. Because the SO cannot figure out the meaning of some of the history notes, he makes a telephone call to the RO. As the telephone call progresses, the RO starts to make comments about the taxpayer's credibility. The SO stops the conversation and informs the RO that any statements made to the SO about the taxpayer's credibility or accuracy of information presented by the taxpayer are prohibited ex parte communications unless made in the presence of the taxpayer or his representative. The SO tells the RO if he would like to present these types of statements, the SO can arrange a conference call with the taxpayer's representative. The RO declines the SO's offer. The SO should document the RO's statement in the case history and send a letter to the taxpayer describing the statement and giving the taxpayer an opportunity to respond.

8.22.2.2.3.3  (10-30-2007)
Jeopardy Levy

  1. A traditional jeopardy levy under IRC 7429 is where the IRS levies before the IRC 6331(d) 30-day period has expired, but the taxpayer has not been given a CDP notice of intent to levy and right to a hearing.

  2. A taxpayer is entitled to a hearing under IRC 7429 when the IRS has made a traditional jeopardy levy.

  3. In a traditional jeopardy levy, a taxpayer will be entitled to a Jeopardy Levy hearing under IRC 7429 and a CDP hearing under IRC 6330.

  4. The taxpayer is entitled to a post-levy CDP hearing NOT an IRC 7429 jeopardy levy hearing if the IRS levies after the IRC 6331(d) period has expired but before:

    1. a CDP Notice has been issued

    2. the 30-day period for requesting a CDP hearing has passed because collection is in jeopardy

  5. If Collection commences levy action during the CDP hearing (or after the CDP hearing was requested), incorporate the appropriateness of the levy (reasonableness of the finding of jeopardy of collection) in the CDP hearing. There is no separate right to an additional CDP hearing or IRC 7429 hearing at this time.

  6. The taxpayer can also appeal the jeopardy levy under the Collection Appeals Program (CAP). See IRM 8.24.1"Collection Appeals Program (CAP) and Jeopardy Levy Appeals" .

8.22.2.2.3.4  (03-11-2009)
Disqualified Employment Tax Levy

  1. The "Small Business and Work Opportunity Tax Act of 2007" modified the collection due process (CDP) procedures for employment tax liabilities by amending IRC 6330(f) to permit levy without first giving a taxpayer owing employment taxes a pre-levy CDP notice if the levy is a "disqualified employment tax levy (DETL)."

  2. A tax period may be collected by a DETL if the following requirements are satisfied:

    1. There is an employment tax liability for the tax period.

    2. The levy is for taxes owed by a taxpayer or a predecessor who previously requested a CDP levy hearing.

    3. The prior timely CDP hearing request properly included at least one unpaid employment tax period that ended during the two-year period before the period to be levied (two-year look-back period).

      Note:

      Predecessor CDP hearing requests are not used as a basis of a DETL until the term "predecessor" is defined in the CDP regulations or interim guidance.

  3. Collection may issue a DETL if the tax period(s) to be collected meet(s) the above requirements. Even if a tax period qualifies for a DETL, Collection has the option to issue a DETL or provide the taxpayer with a pre-levy CDP notice. Collection might decide to issue a pre-levy CDP notice if no IRC 6331(d) notice (CP 504) has been issued or there has been no contact with the taxpayer within the last 180 days.

  4. Employment taxes are defined as FICA, FUTA, and withheld income tax. It includes taxes reported on:

    • Form 941 (MFT 01)

    • Form 943 (MFT 11)

    • Form 944 (MFT 14)

    • Form 945 (MFT 16)

    • Form 940 (MFT 10)

    • Form CT-1 (MFT 09)

  5. The "prior" request refers to a timely, processable CDP levy hearing request and also includes:

    1. timely requests withdrawn in Collection or Appeals

    2. a post-levy request for a CDP hearing made in response to a post-levy CDP notice L1058D, state refund L1058, or jeopardy levy L1058

  6. The "prior" request does NOT include:

    1. an equivalent levy hearing request

    2. an untimely CDP levy hearing request

  7. Use one or more of the following to identify a prior timely CDP levy hearing request:

    1. IDRS cc TXMODA: Look for TC 971 AC 630, which shows the taxpayer (TP) made a CDP levy request for that module.

      Note:

      TC 971 AC 630 became operational 3/17/2008

    2. ACDS case summary card

    3. IDRS cc CDPTRT – identifies TYPE (timely or equivalent lien and/or levy), MFT, tax modules, and date hearing requested. See IRM Exhibit 2.4.57 for information on cc CDPTRT.

    Note:

    A TC 971 AC 276 on a TXMODA means the CDP hearing request was withdrawn in Collection AND Collection did not forward the hearing request to Appeals. Where a TC 971 AC 276 is on a module, you must also review IDRS command code CDPTRT to determine whether the withdrawn request was a lien or levy request. The withdrawn request must have been for a levy hearing.

    Note:

    The period(s) listed by the taxpayer on the "prior" CDP levy hearing request used as a basis of a DETL must have been listed on a CDP levy notice preceding the request. The presence of a TC 971 AC 069 on a TXMODA with a date earlier than the DETL confirms the period was listed on a prior CDP levy notice.

  8. The "prior" hearing request must have involved employment taxes arising within the two-year period before the beginning of the taxable period for which the DETL is served.

  9. The two-year look-back period is measured from the beginning of the period for which the DETL is served. If the taxpayer requested a CDP levy hearing for employment taxes that arose during the two-year look-back period, the period qualifies for a DETL.

    Example:

    The taxpayer owes employment taxes for the fourth quarter of 2005 (quarter ending 12/31/2005). A CDP levy notice listing this unpaid quarter was issued and the taxpayer timely requested a CDP levy hearing. The taxpayer pyramids an additional liability for the second quarter of 2006 (quarter ending 6/30/2006). QE 6/30/2006 qualifies for a DETL because the taxpayer had requested a prior levy hearing for liabilities arising during a quarter that ended within the two-year look-back period of the quarter to be levied (04/01/2006 back to 04/01/2004).

    Example:

    The taxpayer owes employment taxes for the first quarter 2004 (quarter ending 3/31/2004). A CDP levy notice listing this unpaid quarter was issued and the taxpayer timely requested a CDP levy hearing. The taxpayer accrues an additional liability for the second quarter of 2006 (quarter ending 6/30/2006). QE 6/30/2006 does not qualify for a DETL because the taxpayer's earlier request for a levy hearing for the quarter ending 03/31/2004 is outside the two-year look-back period of QE 6/30/2006 (04/01/2004 through 04/01/2006).

  10. Collection issues a post-levy CDP notice (L1058D) within 10 days after the issuance of a DETL. The notice shall be:

    • given to the taxpayer in person;

    • left at the last known address; or

    • sent by certified mail to the taxpayer’s last known address

    Note:

    The post-levy notice is not required to be sent with return receipt requested.

  11. Collection processes and forwards to Appeals the DETL post-levy hearing request in the same manner as other CDP hearing requests. Collectionl:

    1. Prepares Form 12153-A with all pertinent information

    2. Faxes Form 12153-A to Compliance Case Processing (CCP) to establish the hearing request on the CDP Tracking System

    3. Routes cases to Appeals using APS "Case Routing by State/Zip" .

  12. Follow procedures in IRM 8.22.2.2.4 for the review and documentation requirements of DETL hearing requests. Current standards for review and documentation of CDP cases apply to DETL hearing requests. DETL hearing requests receive priority consideration. See IRM 8.22.2.2.6.5.

    Note:

    Identify post-levy CDP hearing requests with feature code"PY" .

  13. Verify the following:

    1. each period listed on the DETL qualifies for collection by DETL using requirements from (2) above.

    2. the tax period on the prior CDP levy hearing request that ended during the two-year look-back period was listed on either a pre- or post-levy CDP Levy Notice (L1058/L1058D) preceding the prior CDP levy hearing request. This can be verified by TC 971 AC 069 on a TXMODA.

  14. If the tax period meets the criteria for issuing a DETL, the taxpayer should have been issued the Notice of Intent to Levy under IRC 6331(d). In most instances, this is the CP 504 notice or the "Status 58" notice.

  15. If a CP 504 notice (or any other IRC 6331(d) notice) was not issued, and the DETL attached the taxpayer’s property, the levy was illegal and, unless the taxpayer otherwise consents, the levy must be released and any levied property returned in accordance with IRC 6343(d) (see note for applicable time limit). However, the L1058D is valid. Under these circumstances, treat the L1058D as a pre-levy notice under IRC 6330(a). (For future levies, the L1058D also satisfies the requirements of IRC 6331(d).)

    Note:

    Specific property attached by illegal levy other than money may be returned at any time. Illegally levied money may be returned, but only if the taxpayer properly requests return of the money before the expiration of 9 months from the date of levy. Money may also be returned if the IRS determines within the 9-month period after the levy takes place that the levy was illegal. See Treas. Reg. 301.6343- 3 (e) for a complete explanation.

  16. If a hearing request made in response to the DETL and the post-DETL L1058D includes a tax period not on the L1058D, the tax period not on the L1058D might have been listed on a prior CDP levy notice issued to the taxpayer. Verify thisby checking TXMODA fora TC 971 AC 069:

    • If the taxpayer was issued a prior CDP levy notice, the taxpayer is not entitled to a CDP hearing for that period with the current CDP hearing. See IRM 8.22.2.2.21, Equivalent Hearings, to determine if the period may qualify for an EH. There is no need to confirm a DETL was properly issued for that period.

  17. Make a separate determination for each DETL period to determine if the period qualifies for the DETL.

  18. If you determine none of the periods qualify for the DETL, notify the Revenue Officer (RO) via encrypted E-mail (with a "cc" to the RO Group Manager) to immediately release the levy. Identify the taxpayer in the E-mail with the following information:

    • Name of taxpayer/TIN

    • Disqualified Employment Tax Levy (DETL) dated

    • Disqualified Employment Tax Levy notice (L1058D) dated

  19. Choose the applicable explanation why the period(s) do not qualify for the DETL from the following list:

    • "type of tax" is not employment tax;

    • taxpayer did not request a prior, timely, CDP Levy hearing;

    • the prior timely, CDP Levy hearing request did not involve any employment tax period ending within the 2-year look-back period;

    • the period on the prior, timely hearing request that ends within the 2-year look back period was not listed on a prior pre- or post-levy CDP Levy Notice L1058/L1058D).

  20. End the E-mail with the following paragraph:

    "You must immediately release the DETL. If you would like to discuss this, I must invite the taxpayer (or the authorized rep) to participate to avoid a prohibited ex parte communication. I will hold a pre-levy hearing on the period(s) you will release from the DETL: MFT/taxperiod(s)."

  21. Treat the post-levy CDP L1058D Notice as a pre-levy CDP Notice. Follow established procedures in scheduling a pre-levy conference.

    Note:

    If the taxpayer brings to Appeals’ attention that the Service received (or will receive) specific property or monies from the illegal levy, ask the taxpayer if he /she wants the levied property or money returned.

    Reminder:

    Money may not be returned if the request for its return is made more than 9 months after the levy takes place. See Treas. Reg. 301.6343- 3 (e) for a complete explanation. If the taxpayer requests return of the illegally-levied property or money (and IRC 6343 permits return of the money), instruct the field to take necessary steps to return the levied property or funds in the "Remarks" section of the CDP Form 5402.

    Note:

    Document in the case activity record the conversation you have with the taxpayer (or the POA) regarding the levied property or money. Clearly document if the taxpayer agrees to the Service retaining the property or money.

  22. If you determine one or more of the periods do not qualify for the DETL, take the following actions:

    1. Notify the RO via encrypted E-mail (with a "cc" to the RO Group Manager) to immediately issue a partial release of the levy. In the E-mail, provide a brief explanation (see 20 above).

    2. Treat the post-levy CDP Notice as a pre-levy CDP Notice for the periods that do not qualify for DETL.

    3. Follow established procedures in scheduling a conference, which will be both a pre- and post-levy CDP levy hearing.

  23. If all the periods on the DETL qualify for DETL status, continue working the case following established procedures.

  24. Ensure the RO requested TC 971 AC 069 on the DETL hearing request period(s):

    1. TC 971 AC 069 is required on all periods even if the period is determined to have been improperly included on the DETL and is heard as a pre-levy CDP notice.

    2. The TC 971 AC 069 is a manual input with the issuance of a DETL vs. a systemic input when a pre-levy CDP notice is issued.

    3. Where the RO failed to add TC 971 AC 069, include instructions in the "Remarks" section of the CDP Form 5402 to input the TC 971 AC 069.

  25. A DETL may be served to collect DETL tax periods during a timely requested pre- or post-levy CDP hearing or judicial review of such hearing. If a DETL is served during a CDP hearing, the SO determines if the DETL is permitted by using the procedures described above.

    Note:

    Do not use the request for the current hearing to determine if a DETL is permitted during the hearing or ongoing judicial review.

8.22.2.2.4  (03-11-2009)
Case Review and Documentation Requirements

  1. This section identifies items that must be reviewed and/or documented in a CDP or equivalent hearing case activity record. This list is not all-inclusive.

  2. The hearing officer assigned the case MUST review the following to ensure the accuracy of the Case Summary Card:

    • Form 12153 (or other written request for a hearing)

    • Form 12153 A/B - Referral Request for CDP Hearing

    • CDP Lien or Levy Notice

      Note:

      APS cards-in a case using Collection's Form 12153-A (ACS) or Form 12153-B (field). See IRM 8.22.1.

      Note:

      If the ACS Levy Notice is not available, review the Certified Mail List.

  3. Guidance for the review and/or documentation items in the following chart is found in the listed IRM section:

    Review and/or Documentation Items Review Document
    TYPE See IRM 8.22.2.2.4.2. X  
    TAX PERIODS See IRM 8.22.2.2.4.3. X  
    FEATURE CODES See IRM 8.22.2.2.4.4. X  
    TIMELINESS See IRM 8.22.2.2.4.9. X X
    CDPTS Case Listing screen print See IRM 8.22.2.2.5. X  
    No Prior Involvement See IRM 8.22.2.2.4.5. X X
    CSED Verification See IRM 8.22.2.2.4.6. X X
    Legal & Administrative Review See IRM 8.22.2.2.4.7. X X
    Issues See IRM 8.22.2.2.16.4.2. X X
    Information submitted prior to issuing NOD or Decision Ltr See IRM 8.22.2.2.4.11. X X
    Information submitted after issuing NOD or Decision Ltr See IRM 8.22.2.2.4.12. X X
    Before issuing NOD/Decision Letter, review for bankruptcy filing See IRM 8.22.2.2.6.8. X  
    Before contacting 3rd party, review for 3rd-party contact notification See IRM 8.22.2.2.8.1. X X
    Receipt of SND or prior opportunity when taxpayer contests the liability See IRM 8.22.2.2.11. X X
    Proper imposition of IRC 6651(a)(2) penalty where liability is a IRC 6020(b) assessment See IRM 8.22.2.2.11.7. X  

8.22.2.2.4.1  (03-11-2009)
eCase Overview

  1. eCase functionality was introduced to Appeals as a way to eliminate the manual effort required to card-in cases.

  2. The idea behind eCase functionality is that tax return and case information that must be shared from one operating unit to another should not have to be entered every time it moves from one system to another.

  3. ACS and ICS CDP case data is transferred to ACDS via eCase.

  4. eCase is an electronic means of transferring systems data such as:

    1. taxpayer name

    2. TIN

    3. MFT

    4. tax periods

  5. eCase:

    • reduces processing time

    • improves data accuracy on Case Summary Cards

  6. eCase information is available from ACDS via the "eCase Info" button after accessing a WUNO. The "eCase Info" button is grayed-out if eCase information is not available.

8.22.2.2.4.1.1  (03-11-2009)
ICS data transferred via eCase

  1. The ICS eCase "Taxpayer Collection Account Information " screen has 3 tabs at the bottom of the screen:

    • ICS Account

    • Address/Contact Info

    • Taxpayer Agent

  2. ICS Account screen may provide, if available:

    • POA information

    • Phone numbers

      Note:

      Some fields may be blank if the information is not available

  3. Address/Contact Info provides available addresses from ICS.

  4. Taxpayer Agent provides a list of one or more tax periods with names of agents associated with each tax period.

  5. Notifications: Unlike ACS-CDP cases carded-in from eCase, you will not receive ICS Notifications.

  6. ICS history is not transferred via eCase. Appeals employees will directly access ICS to retrieve case history information.

  7. Tax Module (TXMOD) information is not transferred via eCase. Appeals employees will access IDRS to obtain tax module information.

8.22.2.2.4.1.2  (03-11-2009)
ACS data transferred via eCase

  1. The ACS eCase "Taxpayer Collection Account Information " screen has 11 tabs at the bottom of the screen:

    1. Account Alerts and Phone numbers

    2. Tax Modules

    3. Case Events: A chronological list of events of the case while in Compliance

    4. Information Items: ACS case narrative

      Note:

      There is assistance on the ACDS "Utilities" button for ACS standard abbreviations & comments

    5. IRS Employees: Name of Compliance employee(s) who worked the case

    6. Levy/Asset: When available provides wage amount; levy source

    7. Financial Summary

    8. Asset/Liability: When available, this button provides a list of assets; available credit; utility; medical & insurance payments; Federal & state withholding amounts

    9. Transactions

    10. TDI TAXMOD

    11. Tax Returns

  2. Tabs are active (i.e., not greyed-out) if information is available.

  3. A Notification button on the ACDS Home Page provides new case information from ACS.

  4. Click the Notification button screen and the following appears:

    • Taxpayer’s name

    • WUNO

    • Comment

  5. Click on the taxpayer's name to delete one or more notifications.

  6. There is an automated Case Activity Record (CAR) entry when data is added which coincides with the home page notification.

8.22.2.2.4.2  (03-11-2009)
CDP Case TYPE

  1. CDP cases are assigned one of the following case TYPE codes.

    • DPLV for levies

    • DPLN for liens

    • DPL2 for both liens and levies

      Note:

      Collection identifies both lien and levy cases as "DPBO"

    • CDPTD for Separate Timeliness Determinations. See IRM 8.22.2.2.4.10.

  2. Verify accuracy of TYPE:

    If... And... Then...
    Taxpayer checked both lien and levy boxes taxpayer received both IRC 6320 and 6330 notice determine timeliness of hearing request for both notices ( See IRM 8.22.2.2.4.9.
    Hearing request is timely for both lien and levy notices   TYPE can be either DPLV and DPLN or DPL2

    Note:

    While DPL2 is preferred, do not correct separate CSCs
    Hearing request was timely for one of the notices and untimely for the other and the taxpayer requested an EH

    Note:

    See IRM 8.22.2.2.21 Equivalent Hearings for EH filing timeframe.

    		  TYPE will have separate WUNOs:

    • TYPE=DPxx (timely)

    • TYPE= DPxx with feature code EH for late periods

    Hearing request is untimely for both notices, the taxpayer requested and qualified for an EH   TYPE can be either DPLV and DPLN or DPL2 with feature code EH
    Both lien and levy box are checked taxpayer did not receive both IRC 6320 and 6330 notices TYPE is only for CDP notice received.

    Note:

    See IRM 8.22.2.2.2.1. This subsection covers closing non-processable requests.

  3. If multiple periods are listed on a CDP request and you determine a couple periods are late-filed and lack an EH request (either verbal or written) or do not qualify for an EH (i.e., CDP notice greater than a year old), do not return the entire case as a Premature Referral. Instead, address the situation in the Substantive Contact Letter and during the conference.

  4. If the taxpayer states they do not want an equivalent hearing or is unresponsive and a conference is not held, take the following actions:

    1. Request that APS delete the periods from a DPxx WUNO and card in as TYPE = CDPTD.

    2. Request that APS update CDPTS to delete modules determined not to qualify for a hearing. See IRM 8.22.2.2.5.

    3. Close CDPTD WUNO following procedures in See IRM 8.22.2.2.4.10. Separate Timeliness Determinations.

  5. You must submit a request to your local APS to update CDPTS with any changes you make to the Case TYPE. Examples of Case TYPE changes:

    1. From timely to EH (or vice versa)

    2. From lien to levy (or vice versa)

    3. Determination that TP qualifies for both lien and levy

8.22.2.2.4.2.1  (03-11-2009)
Determine Linked WUNO or Separate WUNO

  1. Separate WUNOs for:

    1. Business Master File (BMF) case related to an Individual Master File (IMF) case

    2. BMF accounts with different EINs. (regardless that they may be related)

    3. IMF joint account related to an individual IMF account

      Example:

      Husband and wife joint 1040s and husband separate TFRP assessments

  2. Linked WUNOs for related cases:

    Example:

    Where more than one Master File Transaction (MFT) is part of a case, i.e., a business entity has MFTs 01, 10 and 02

    Example:

    Joint liabilities where the husband is PRIMARY for some years and the wife is PRIMARY for other years

  3. WUNOs that should be linked and are not do not need correcting; WUNOs that should be separate and are not must be corrected.

8.22.2.2.4.3  (03-11-2009)
MFT and Tax Periods

  1. Review the Case Summary Cards (CSC) and verify the correct periods were carded-in and the MFT is correct.

  2. A request for a CDP hearing includes ALL periods listed on the CDP Lien or Levy Notice.

    Example:

    The taxpayer receives Letter 1058 listing 1040 tax periods 12/31/2003, 12/31/2004, and 12/31/2005. The taxpayer timely requests a CDP hearing using Form 12153 and only lists 12/31/2005 in Section 4 - " Tax Information" . All 3 tax years are part of the hearing and should be listed on the CSC.

    Exception:

    The taxpayer explicitly states during the hearing that he or she is not interested in a hearing for tax periods on the CDP Notice they did not list on the hearing request.

  3. If the taxpayer insists they are only interested in certain periods and not all periods being part of the hearing, request that APS:

    1. remove periods from CSC

    2. if the periods have TC 520 cc 76/77, reverse with TC 522

    3. delete periods from CDP Tracking System

  4. You must submit a request to your local APS to update CDPTS with any changes you make to the Tax Periods and/or MFT. Examples of Tax Period and MFT changes:

    1. Removing periods that do not qualify for a hearing

    2. Adding periods that qualify for a hearing

    3. Adding MFT 31 and Tax Period when taxpayer files an Innocent Spouse Claim and CCISO mirrors the MFT 30 modules to MFT 31 on IDRS and zeroes out the MFT 30 modules.

      Note:

      The MFT 30 module must be deleted and the MFT 31 added to CDPTS for the spouse(s) requesting a CDP hearing.

8.22.2.2.4.4  (03-11-2009)
Feature Codes

  1. CDP cases may have one or more of the following Feature Codes:

    • EH = Equivalent Hearing (taxpayer requested an EH on an untimely-filed CDP request). See IRM 8.22.2.2.21.

    • PY = Pyramiding In-Business trust fund taxpayer. See IRM 8.22.2.2.6.5.

    • SD = Spousal Defense (an Innocent Spouse Claim is under consideration). See IRM 8.22.2.2.11.3.

    • RJ = Retained Jurisdiction. See IRM 8.22.2.5.

    • TR = Transferred-in from another Appeals area

    • DP = Related WUNO (both the CDP and the related WUNO will have DP Feature Code)

      Note:

      The only Case TYPES related to a CDP case that will have feature code "DP" are OIC, See IRM 8.22.2.4.7.4., ABINT, See IRM 8.22.2.2.13.and SD, See IRM 8.22.2.2.11.3.

    • CO = COIC-investigated CDP OIC (added to both CDP and OIC WUNO). See IRM 8.22.2.4.7.5.

    • DR = Disaster Relief. See IRM 8.7.1.

    • EI = EITC considered within CDP jurisdiction. See IRM 8.22.2.2.11.4.

    • ID = Identify Theft indicator. See IRM 8.1.6.

    • FV = Frivolous or delaying argument. See IRM 8.22.2.2.10.3.

  2. Ensure the Case Summary Card reflects all applicable feature codes.

8.22.2.2.4.5  (03-11-2009)
No Prior Involvement

  1. IRC 6320(b)(3) and IRC 6330(b)(3) require that an officer or employee who has had no prior involvement with respect to the same unpaid tax conduct the hearing. Prior involvement includes participation or involvement in a matter (other than a prior CDP hearing) that the taxpayer may have with respect to the tax and tax period shown on the CDP notice.

  2. Prior involvement exists only when the following were at issue in the CDP hearing and were also at issue in the prior non-CDP matter and the appeals employee actually participated in the prior matter.

    1. taxpayer,

    2. the tax, and

    3. the tax period

    No prior involvement means that the employee has not participated in Compliance or Appeals non-CDP matters for the same tax period and type of tax.

    Exception:

    For cases where appeals are filed in the Court of Appeals for the Tenth Circuit, there is a different definition of no prior involvement. See IRM 8.22.2.2.4.5.1. That subsection covers the Tenth Circuit exception.

    Example:

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

    Example:

    Individual C timely requests a CDP hearing concerning a proposed levy for the 1997 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. 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 1997 income tax liability.

    Example:

    Appeals employee G is assigned to a CDP hearing concerning a proposed levy for 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 would not be considered to have prior involvement because she did not actually participate in the previous CAP hearing involving the TFRP assessed against individual H by such review.

    Example:

    Individual C timely requests a CDP hearing concerning a proposed levy for the 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 6330 unless individual C waives the requirement that the hearing will be conducted by an Appeals hearing officer or employee who has had no prior involvement with respect to C’s 1998 income tax liability.

    Example:

    Appeals employee F is assigned to a CDP hearing concerning a proposed levy for a trust fund recovery penalty (TFRP) assessed pursuant to section 6672 against individual E for the four quarters in 1999. 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 triggered the TFRP assessed against individual E. 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:

    Appeals employee G is assigned to a CDP Hearing concerning a proposed levy for the 2000 income tax liability assessed against individual H. Appeals employee G was previously a Revenue Officer assigned to collect this liability. Appeals employee G would be considered to have prior involvement.

  3. A hearing officer who served as mediator with respect to an examination issue or a collection issue for a tax period subject to a CDP hearing will be considered to have had prior involvement.

    Example:

    Appeals employee M is assigned to a CDP hearing concerning a proposed levy for 2001 income tax liability assessed against individual N. Appeals employee M previously served as a mediator with respect to individual N's 2001 income tax liability. Appeals employee M is considered to have had prior involvement.

  4. The prior involvement restriction only applies to the officer conducting the hearing, not the officer’s manager who signs the notice of determination or decision letter.

  5. If all hearing officers at the office closest to the taxpayer's residence, place of employment or school, or for a business taxpayer, the Appeals office closest to the taxpayer's principal place of business, have had prior involvement with the taxpayer, the taxpayer will not be offered a face-to-face conference at that location unless the taxpayer elects to waive the requirement of IRC 6330(b)(3). Instead, the taxpayer will be offered a face-to-face conference at another Appeals office if Appeals would have offered the taxpayer a face-to-face conference at the closer location. Appeals should try to offer the face-to-face conference at an Appeals office most convenient for the taxpayer.

  6. Taxpayers may waive the "no prior involvement" restriction through use of Form 14041, Waiver Form for Right to Request A New Settlement/Appeals Officer under Section 6320 and/or 6330. Retain the Form 14041 with the administrative file.

  7. The hearing officer must always document "no prior involvement" in the Case Activity Record during their initial analysis. Securing of Form 14041 is also a mandatory documentation item.

  8. "No prior involvement" must be documented in the attachment to the Notice of Determination or Decision Letter.

  9. Where a Form 12257 is secured or an abbreviated ACM is prepared, documentation of "no prior involvement" is only required in the Case Activity Record.

  10. The only exception to documenting "no prior involvement " in Case Activity Records is where a withdrawal is received before analysis is conducted and no substantive contact has been made.

8.22.2.2.4.5.1  (03-11-2009)
10th Circuit Exception

  1. On January 30, 2008 the United States Court of Appeals, Tenth Circuit, in Cox v. Commissioner (514 F. 3d 1119 10th cir. 2008) in an adverse decision, ruled that prior involvement of an Appeals Officer includes where current CDP years were considered in a prior CDP case involving collection of an earlier year.

  2. The Office of Chief Counsel disagrees with the Cox decision, and thus, in cases where appeal lies out of the 10th circuit will not follow this decision. However, for cases where appeal lies in the 10th Circuit, under the Gholson rule, the IRS must follow the decision in cases that cannot be meaningfully distinguished. For individual taxpayers, venue for appeal of a Tax Court decision is based upon the taxpayer's legal residence on the date the petition is filed and for corporation venue is based upon the taxpayer's principal place of business or principal office of the corporation on the date the petition is filed. For the purposes of determining prior involvement, use the taxpayer's residence or principle place of business at the time of the hearing request to analyze which prior involvement rule applies.

    Note:

    If the taxpayer moves or changes office locations during the course of the hearing, you will need to reanalyze this issue.

  3. If the taxpayer resides or has a business or principal office in one of the following States, then the 10th circuit exception applies:

    • Colorado

    • Kansas

    • New Mexico

    • Oklahoma

    • Utah

    • Wyoming

  4. For Tenth Circuit cases only, prior involvement exists where the hearing officer considered the current CDP periods in a prior CDP case involving collection of an earlier year.

    Example:

    Settlement Officer A had a CDP case involving income taxes for 2005. The taxpayer asked for an installment agreement as a collection alternative however the SO was unable to grant an agreement because the taxpayer had not filed 2007 taxes. The taxpayer acknowledged they did not make estimated tax payments for 2007 and are behind for 2008. The taxpayer subsequently filed and owed for 2007, received a CDP Notice, and filed for a hearing. Settlement Officer A is considered to have had prior involvement with the 2007 tax year because the lack of the 2007 filing and potential liability for failure to make ES payments were considered in the previous CDP hearing.

8.22.2.2.4.6  (03-11-2009)
Verification of TC 520 cc 76/77 - Suspension of limitation and collection activity

  1. A timely-filed request for a CDP hearing suspends the periods of limitation and collection activity of the following:

    1. IRC 6502 (relating to collection after assessment)

    2. IRC 6531 (relating to criminal prosecutions)

    3. IRC 6532 (relating to suits)

    from the date of the receipt of the written CDP request until:

    1. the date the IRS receives the taxpayers written withdrawal of the request for a CDP hearing, or

    2. 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, or

    3. where a Summary Notice of Determination is secured, the Appeals Team Manager signs Form 12257

  2. IDRS Transaction Code (TC) 520 with closing codes 76 or 77 systemically suspends the period of limitation and collection activity relating to collection after assessment.

  3. It is critical that TC 520 cc 76 or 77 is input with the correct date for each CDP tax period. See IRM 8.22.2.2.4.9. The subsection is entitled Timeliness Determinations.

  4. Within 5 days of receipt of the case, the hearing officer must review and document in their case activity record their verification of:

    • the appeal was timely or equivalent

    • the input of TC 520 cc 76 or 77 with the correct date for timely periods

    • the EH periods do not have a TC 520 cc 76 or 77

    • the collection statute is suspended/not suspended (if EH)

  5. Take the following steps to immediately correct incorrect TC 520 dates:

    1. ACS-originated cases: Contact ACS-CDP coordinator from the campus site where the CDP case originated

    2. Field-originated cases: Prepare "ACDS Update Request Form" found on APGolf under "ACDS Updates" with all the information needed to correct the TC 520. Find the correct E-Mail address on OUTLOOK and E-Mail the update request form, encrypted, to: *AP-TS-APS-(your Area, East or West)-(your APS local office). Do not send to the PTM’s mailbox.

    Note:

    A TC 520 cc 76 or 77 must be corrected before the TC 521 is input.

  6. The hearing officer must also document their verification of TC 520 with the correct date in the attachment to the Notice of Determination.

    Example:

    "The collection period allowed by statute to collect these taxes has been suspended by the appropriate computer codes for the tax periods at issue."

  7. The CSED is not suspended on the partnership if Collection only issues a CDP levy notice to, or files an NFTL in the name of, an individual partner and the individual partner requests a hearing.

  8. See IRM 8.22.2.2. That subsection covers exceptions to a right to a hearing before taking levy action.

8.22.2.2.4.7  (03-11-2009)
Legal and Administrative Review

  1. Hearing officers must, during initial analysis, document their review in the case activity record whether the requirements of any applicable law or administrative procedure were met (the first of the "big three" ).

  2. Verification can be made through a review of computer transcripts such as TXMODA or literals, unless there is an irregularity identified which may require further inquiry beyond the transcripts. There is no need to get into specifics like the dates that the requirements were accomplished unless the taxpayer raised some legal or procedural requirement issue.

    Example:

    Taxpayer claims he or she did not receive the notice of deficiency upon which the assessment is based.

  3. Minimally document the following:

    1. A proper assessment (assessment was properly made per IRC 6201 and/or IRC 6013(a) for each tax and period listed on the CDP Notice).

    2. Proper mailing of the notice and demand (the notice and demand for payment was mailed to the taxpayers last known address, within 60 days of the assessment, as required by IRC Section 6303).

    3. There was a balance due when the CDP levy notice was issued or when the NFTL filing was requested.

      Reminder:

      Hearing officers are responsible for the legal and administrative review and documentation in CDP hearing requests even if the Collection Specialist previously reviewed and documented verification of legal and administrative requirements; the hearing officer must document their review independent of the Collection Specialist.

  4. The hearing officer, as part of the verification process, must review both the tax and penalty assessments regardless of whether:

    1. the taxpayers disputed the assessments or

    2. some of their arguments may be frivolous.

      Note:

      The hearing officer should ensure, as part of verification, that the penalties were properly assessed.

    See IRM 8.22.2.2.11.7. IRC 6020(b) Substitute For Return (SFR) assessments-verify return and correct imposition of penalties.

8.22.2.2.4.7.1  (03-11-2009)
Tax and/or Penalty Assessment based on a Notice Deficiency - Verification requirements

  1. Where the assessment of tax and/or penalties is based on a deficiency, as part of Appeals’ verification duties under sections 6320(c) and 6330(c)(1), you must verify:

    1. whether a statutory notice of deficiency (SNOD) was properly issued to the taxpayer since a valid SNOD must be issued before the assessment.

      Reminder:

      Collection cannot proceed without a valid assessment.

      Note:

      The taxpayer’s actual receipt of the SNOD is not required for the assessment to be valid.

  2. Where the taxpayer credibly denies receiving the SNOD, the taxpayer has raised an irregularity in the assessment procedures, and you must review (or attempt to review) the underlying preassessment documents. This means in addition to transcripts, you should review or attempt to review:

    1. a copy of the SNOD and

    2. the certified mailing list for the SNOD to verify whether the SNOD was properly mailed to the taxpayer's last known address.

  3. If the IRS did not send the SNOD to the taxpayer's last known address, the resulting assessment is invalid unless the taxpayer actually received the notice in sufficient time to file a timely Tax Court petition. This does not necessarily mean that you must determine that the assessment is invalid if all the relevant underlying documents cannot be obtained because other proof of mailing may suffice. Consult Counsel if questions arise.

  4. Take the following steps in verifying that the assessments were properly made:

    1. Identify from the transactions on a transcript (TXMODA or literal) the basis of the assessment, i.e., whether the assessment is based on a SNOD (TC 420, TC421 cc xx and TC 300) or on a self-assessed return (TC 150).

      Example:

      Where the balance due is from a self-assessed return, it is sufficient to verify that a notice and demand for payment has been sent to the taxpayer in accordance with section 6303.

      Example:

      Where the assessment is a deficiency assessment, determine if the taxpayer has raised an irregularity relating to the assessment procedures.

  5. If the taxpayer credibly denies receiving the SNOD, review the underlying documents that show the notice was sent to the taxpayer's last known address:

    1. If the taxpayer has admitted or admits to receiving the SNOD, document this admission.

    2. If the taxpayer is silent with regard to receipt of the SNOD, ask the taxpayer if he or she received the SNOD.

    3. If the taxpayer is asked and does not recall receiving the SNOD, the best practice is to review the underlying documents.

  6. For taxpayers who do not raise the issuance or receipt issue, through lack of contact with Appeals or otherwise:

    1. Use transcripts to verify the assessment is valid and

    2. Document this verification (e.g., specify and explain the transcript actions codes that indicate the issuance and/or default of a SNOD and basis of assessment).

  7. If a taxpayer challenges the validity of penalties that may be subject to the deficiency procedures review the underlying documents in (2) above to verify both the tax and penalty assessments. The following penalties must be included in a SNOD issued to the taxpayer before the penalties are assessed:

    • nonfiler penalties under IRC 6651(a)(1), IRC 6651(a)(2), or IRC 6654(a)

8.22.2.2.4.8  (10-30-2007)
Imperfect Hearing Requests

  1. In some cases, Forms 12153 are timely filed but need to be "perfected" .

  2. Collection has primary responsibility for perfecting a hearing request using IRS systems or contacting the taxpayer.

  3. If the taxpayer fails to provide the following information the hearing request is generally not imperfect because this information can be obtained from IRS systems:

    1. SSN, ITIN, or EIN. This information should be listed on the Form 12153, but may also be found on the CDP notice, if attached.

    2. Taxpayer's name. If the taxpayer supplies the SSN, ITIN, or EIN, this information can be obtained from IRS systems.

    3. Taxpayer's last known address. If the taxpayer submits an SSN, ITIN or EIN, then the taxpayers last known address should be available on IDRS.

    4. Type of tax/tax periods. This information may be found on the CDP Notice L1058, L3172, the Certified Mail List, or LT11.

    5. An incomplete Form 2848. An authorized practitioner may have a Form 2848, Power of Attorney, that does not list all of the periods on the CDP notice.

    Note:

    A request is not imperfect if it is missing the daytime phone number.

  4. If the taxpayer did not submit Form 12153, but it appears that the taxpayer is requesting a CDP hearing, then the taxpayer has met the requirement of submitting a statement that the taxpayer requests a CDP hearing.

    Example:

    The taxpayer sends in a copy of a recently-issued Letter 1058 with a note attached that says "I don't think I owe this and need to talk to somebody." Since the documents provide the taxpayers name, address, SSN and the tax and period at issue, and a CDP notice was recently sent to the taxpayer, the taxpayer has met the "statement" requirement.

  5. An imperfect request is not a non-processable request and should not be returned as a Premature Referral. See IRM 8.22.2.2.2.

8.22.2.2.4.9  (10-30-2007)
Timeliness Determinations

  1. Determine Timeliness: General Procedures

    1. A timely mailed hearing request is treated as timely filed if the taxpayer's request for a CDP hearing is correctly addressed to the IRS office listed in the CDP Hearing Notice.

      Note:

      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 by calling, toll-free, 1-800-829-1040 and providing the taxpayer identification number (SSN, ITIN or EIN).

      Exception:

      If the CDP Notice does not include the address of the office that sent the notice, and the taxpayer sends the hearing request to the wrong IRS office, determine timeliness by the date stamp of the first office to receive the request.

  2. Use the IRS received date to verify if the request is timely.

    1. If the 30th day is a Saturday, Sunday or federal holiday, and the postmark or meter date is for the next business day after that Saturday, Sunday, or federal holiday, then it is timely.

    2. If the received date is after the due date for filing a timely CDP hearing request, use the postmark or meter date to determine timeliness. If postmarked or metered timely, consider the hearing request timely.

  3. Determining timeliness if the postmark or meter date is illegible or the envelope is missing:

    1. Subtract 3 days for regular mail and 7 days for overseas mail, (unless you can document in the case file why another date was used) from the IRS received date.

    2. If there is no IRS received date, use the signature date.

  4. A POA letter (LT11NC) and the taxpayers CDP Levy Notice should have the same issuance date. However, where the POA sends their copy of the CDP Levy Notice with the hearing request, verify that the POA's letter and the taxpayer's letter have the same issuance date. You can make this determination by viewing:

    1. the taxpayer's copy of the CDP levy notice (if available)

    2. TC 971 AC 069

    3. entry from CDP-CMS (certified mail system)

    If the POAs letter does not match the date of the taxpayers, do not use the POA's letter to determine timeliness because the POA's letter is not issued following the requirements of IRC 6320(a)(2) and IRC 6330(a)(2), which are:

    1. by delivering the notice personally to the taxpayer

    2. leave the CDP Notice at the taxpayer's dwelling or usual place of business

    3. send by certified or registered mail to the taxpayer's last known address

    Note:

    Only the tax periods on the taxpayer's CDP notice are to be included in the appeal. A tax period listed on the POA's LT11NC that does not have the TC 971 AC 069 will not be included in the hearing.

8.22.2.2.4.9.1  (03-11-2009)
Determine Timeliness - Levy hearing requests

  1. The hearing request must be received within the 30-day period commencing the day after the date of the CDP levy notice.

  2. The beginning of the 30-day period is determined by:

    1. The date of the CDP Levy notice if attached to the Form 12153 or if the notice is retrievable

    2. The date of TC 971 AC 069

    3. The entry from the Collection Due Process certified Mail System (CDP-CMS)

  3. Collection should only issue one CDP Levy notice per module and there should only be one TC 971 AC 069 posted in a module. See IRM 8.22.2.2.3.

    Exception:

    Joint liabilities where a CDP levy notice is issued separately to husband and wife or partners in a partnership.

  4. Collection, however, may input a second TC 971 AC 069 and not reverse the first TC 971 AC 069 if unable to verify the delivery of the first CDP Levy notice by one of the following:

    1. posting of action code 066, 067 or 068

    2. recordation of the USPS received date on the CDP Certified Mail System (CDP-CMS). This is done by requesting a copy of the case status report.

    3. recordation of the USPS received date on the certified mail list. This is done by requesting a copy of the certified mail list.

    If any of the above cannot be verified, use the second TC 971 AC 069 to determine timeliness.

  5. Beginning in July 2007 ACS Letter 11's may be available on Control D. Control D is a web-based system that allows employees to view on-line, certain notices and letters that have been sent to taxpayers.

    Note:

    Employees need to complete an OL5081 for Control D access. Inactive accounts will be revoked (locked) after 45 days of no activity and removed after 90 days. Users whose accounts are removed will have to submit a new OL5081.

  6. Campuses enter the USPS received date on CDP-CMS. If verification is required, request the certified mailing list.

8.22.2.2.4.9.2  (03-11-2009)
Determine Timeliness - Lien hearing requests

  1. The hearing request must be received on or before the "must file by" date of the Letter 3172, Notice of Federal Tax Lien Filing and your Right to a Hearing Under IRC 6320.

  2. If the request was received after the Letter 3172 "must file by" date and the taxpayer disagrees that the request was late, consider that the request may be timely if the request was received, metered, faxed, or postmarked within 8 business days + 30 calendar days following the filing date of the lien with the recording office.

    Note:

    "Filing" , according to the Office of Chief Counsel, means the date of delivery to the recording office.

  3. Use the following steps to determine the due date of the hearing request and if the request was received timely where:

    1. The taxpayer disagrees that their request was late

    2. The taxpayer is only one or two days late from the "must file by" date on Letter 3172.

    :

    Steps to calculate the "filing" date of the lien with the recording office.
    1. Determine the actual mailing date of the NFTL to the recording office Call the "Automated Lien System (ALS) Unit - Contacts" to determine the actual mailing date.

    Note:

    The actual mailing date is the date stamped on the Billing Support Voucher listing the NFTL.

    Note:

    See "Who/Where" on SERP for the list of contacts in the ALS Units.

    2. Add 3 business days to the actual mailing date to estimate the date of delivery to the recording office  
    3. Add 5 business days plus 30 calendar days to the estimated date of delivery.  

    Note:

    Estimation is necessary because the Service does not ask recording offices to provide the date of delivery and the Service does not send the NFTL by certified mail.

8.22.2.2.4.9.2.1  (03-11-2009)
Timeliness of CDP Hearing Requests Hand Delivered to Taxpayer Assistance Centers (TAC)

  1. If a taxpayer hand carries the hearing request to an IRS employee in a local TAC, the request is timely if received no later than:

    1. 30 days from the date of the CDP levy notice.

    2. the "must file by" date on Letter 3172.

      Note:

      See IRM 8.22.2.2.4.9.2. The subsection covers if the taxpayer disagrees that the lien hearing request was filed late.

  2. The reason for this rule is while sections 6320 and 6330, and the regulations promulgated pursuant to those statutes, require timely submission to the office indicated on the CDP Notice, the regulations under section 6091 permit more flexibility with respect to hand-carried hearing requests.

  3. A hearing request that is mailed to a TAC office will not be considered properly filed.

  4. A TAC employee that receives a CDP hearing request via hand-delivery should date stamp and initial the hearing request then send or fax the hearing request to the appropriate campus location for development.

8.22.2.2.4.9.2.2  (03-11-2009)
Undelivered CDP Lien Notices

  1. The Centralized Lien Unit (CLU) does not process undelivered Collection Due Process (CDP) notices sent out when Notices of Federal Tax Lien are filed.

  2. The undelivered notices are routed back to the employee or business unit requesting the lien filing who are required to request input of one of the following action codes established on IDRS to track the mailing, and the results of the mailing, of the CDP lien notice:

    1. Action Code 253 = Unclaimed

    2. Action Code 254 = Undelivered

    3. Action Code 255 = Refused

    Note:

    Transaction Code 971 Action Code 252 indicating the notice was mailed is not required on the module to post the results of the mailing action codes.

  3. Collection-field will scan the notice and envelope and attach them as part of the Integrated Collection System (ICS) history. If scanning is not available, the RO will retain the hard copy in the case file and document the ICS history with the returned mail status. See IRM 5.12.1 Federal Tax Lien - Lien Appeals for additional information.

  4. Appeals may need to rely on the above Action Codes and a copy (facsimile) of the Letter 3172 (for mailing address) to resolve mailing issues if the returned envelope is not available.

  5. A properly sent (certified/registered to the last know address) CDP lien notice is sufficient to start the 30-day period for the TP to request a CDP hearing. "Actual Receipt" is not a prerequisite to the validity of the CDP Notice.

  6. If the certified mail listing is not available, Appeals may not be able to determine if the Notice was mailed certified. If Appeals determines the CDP Notice was not properly sent, the taxpayer is entitled to a Substitute CDP Notice. See IRM 8.22.2.2.4.9.4.

8.22.2.2.4.9.2.3  (03-11-2009)
IRC 6320 Hearing Request where NFTL never filed; error caught before issuing NOD

  1. The hearing officer may determine during a section 6320 hearing that the NFTL was never filed (i.e., recorded).

  2. Appeals should take the following steps:

    1. rescind Letter 3172

    2. return the case as a premature referral

    3. instruct Collection to file a new NFTL

8.22.2.2.4.9.2.4  (03-11-2009)
IRC 6320 Hearing Request where NFTL never filed; Appeals issues NOD; ALS issues second L3172

  1. Appeals may hold an IRC 6320 hearing and issue a Notice of Determination, unaware that the NFTL was never filed.

  2. Subsequently, the Automated Lien Unit determines the NFTL was "lost" and issues another NFTL.

  3. The taxpayer is entitled to another IRC 6320 hearing because the earlier section 6320 notice was invalid because the NFTL was never filed.

  4. The NOD issued pursuant to the invalid Letter 3172 is invalid; the invalid NOD does not require rescission.

  5. The second Letter 3172 is valid and the taxpayer is entitled to a section 6320 hearing based on the second Letter 3172.

8.22.2.2.4.9.2.5  (03-11-2009)
IRC 6320 Hearing Request where Collection withdraws NFTL

  1. The taxpayer has a right to a section 6320 hearing where:

    1. Collection forwards a CDP Lien hearing request to Appeals,

    2. Withdraws the NFTL on its own without consulting Appeals,

    3. Withdraws the NFTL without rescinding the CDP Lien notice, and

    4. The taxpayer does not withdraw the CDP hearing request

      Exception:

      The taxpayer's CDP issue was solely a request to withdraw the NFTL

  2. If Collection withdraws the NFTL on its own without any contact with the taxpayer, the taxpayer has not had the benefit of the section 6320 hearing, which is to:

    1. raise liability issues that are not precluded

    2. submit alternatives to resolve collection of the liability

  3. The taxpayer will not be entitled to another IRC 6320 hearing if and when the NFTL is filed again.

8.22.2.2.4.9.2.6  (03-11-2009)
IRC 6320 or 6330 Hearing Request involving untimely IRC 6303 notice

  1. IRC 6303 requires the Service give the taxpayer notice and demand, as soon as practicable, and within 60-days after assessment.

  2. The taxpayer (or their representative) may challenge the Service's ability to file a lien or issue a levy where it has failed to provide the taxpayer with a timely notice and demand under IRC 6303.

  3. If you determine that Collection failed to issue the notice and demand in a timely manner, Counsel advises that the untimeliness of the IRC 6303 notice does not invalidate the notice. Treas. Reg. section 301.6303-1(a) states "However, the failure to give notice within 60 days does not invalidate the notice" .

  4. Therefore, we take the position, consistent with the regulation, that the untimeliness of the 6303 notice does not affect collection. Once the demand is made (even if it is untimely), the lien arises and administrative collection can proceed.

8.22.2.2.4.9.3  (03-11-2009)
Metered Mail and other mail without postmarks- How to Determine Timeliness

  1. Postage meters and other mailing programs such as the United States Post Office's website provide many benefits for businesses, such as:

    1. speeds mailings

    2. gives cost controls

    3. conveniently prints postage for mail or packages right from the place of business

  2. According to the rules on metered mail, the date of mailing in the indicium must be the actual date of deposit at the licensing post office or collection box.

  3. Appeals will use the meter or printed postage date to determine timeliness though there may be exceptions where metered and web-stamped mail is not received by the post office until the following business day.

    Example:

    When the mail is deposited in the collection box after the day's last scheduled collection.

8.22.2.2.4.9.4  (03-11-2009)
Substitute CDP Lien or Levy Notice

  1. The Service is required to provide the taxpayer with the CDP Notice in one of the following manners:

    1. by delivering the Notice personally to the taxpayer

    2. leaving the Notice at the taxpayer's dwelling or usual place of business

    3. sending by certified or registered mail to the taxpayer's last known address

  2. When Appeals determines that the IRS failed to properly provide a taxpayer with a CDP Notice, Appeals will not sustain the collection action.

  3. Do not withdraw the NFTL on improper CDP Lien notifications.

    Note:

    The failure to notify the taxpayer concerning the filing of a NFTL does not affect the validity or priority of the NFTL, which becomes effective upon filing. The validity and priority of a NFTL is not conditioned on notification to the taxpayer pursuant to IRC 6320.

  4. Request that Collection promptly issue a Substitute CDP Notice; a substitute notice provides the taxpayer with an opportunity to request a CDP Hearing.

  5. When the IRS provides the taxpayer with a substitute CDP Notice, the taxpayer is entitled to a CDP or EH hearing before Appeals if the taxpayer timely requests a CDP or EH hearing .

8.22.2.2.4.10  (10-30-2007)
Separate Timeliness Determinations

  1. Separate Timeliness Determination: Collection will forward the following four (4) types of CDP or equivalent hearing requests that Collection determined to be untimely to Appeals for a timeliness determination:

    If... And...
    CDP hearing request was untimely received the taxpayer did not request an equivalent hearing
    CDP hearing request was timely received yet non-processable, and (i) was perfected late or (ii) there was no or an inadequate response to the perfection request the taxpayer did not request an equivalent hearing
    Equivalent hearing request (including untimely CDP requests treated as equivalent hearing requests) that was untimely received
    Equivalent hearing request (including untimely CDP requests treated as equivalent hearing requests) that was timely yet non-processable

    • perfected after the reasonable time period for perfection specified by Collection, or

    • there was no response or an inadequate response to the perfection request received greater than one year from date of CDP Notice

  2. Collection Specialists in the following Appeals Offices have been assigned to review CDPTD requests:

    • Memphis, TN

    • St. Paul, MN

    • Hartford, CT

  3. Collection will fax the following documents to APS in the above offices:

    1. Form 12153

    2. The envelope the request was mailed in

    3. A copy of the CDP notice if available (L 3172 or L 1058, et al)

    4. Any written correspondence to and from the taxpayer, including any documents submitted by the taxpayer

    5. History (only ACS required to fax history; Appeals has access to ICS history on field cases)

  4. APS will card-in the case as TYPE = CDPTD in the OTHER/Miscellaneous category.

  5. CDPTD requests will not receive a Uniform Acknowledgement Letter.

  6. Collection Specialists will work and close CDPTD requests within five days of assignment, preparing Form 5402 as follows:

  7. Closing codes for CDPTD cases:

    1. 14 = Appeals sustains Collection’s Timeliness Determination.

    2. 15 = Appeals does not sustain Collection’s Timeliness Determination.

    3. 16 = Appeals partially sustains Collection’s Timeliness Determination.

      Note:

      Enter in the "Remarks" section of Form 5402 which periods Appeals does not sustain Collection's timeliness determination.

  8. Select one (or both) of the following paragraphs appropriate to the CDPTD:

    1. CDP EH hearing request was untimely received; the EH request was received greater than one-year after issuance of the CDP Notice

    2. CDP hearing request was untimely received and the taxpayer did not request an equivalent hearing.

      Note:

      If you select both paragraphs you will need to clearly identify which periods apply to each paragraph.

  9. Procedures for CDPTD paperwork:

    1. Provide copy of Form 5402 to ATM for ACAP date

    2. Provide copy of Form 5402 to APS to close case on ACDS

    3. Fax all documents back to originator

    .

  10. For CDP hearing requests that were untimely received and the taxpayer did not request an equivalent hearing:

    If ... Then ...
    Appeals determines that the CDP hearing request was untimely and the taxpayer did not request an EH close case with cc 14, Appeals sustains Collection’s Timeliness Determination
    Appeals determines that the CDP hearing request was timely received close case with cc 15, Appeals does not sustain Collection’s Timeliness Determination
    Appeals determines that some of the periods on the CDP hearing request were timely and others were untimely and the taxpayer did not request an EH close case with cc 16, Appeals partially sustains Collection’s Timeliness Determination (specify in the "Remarks" section of Form 5402 which periods are untimely and which periods are timely)

  11. For CDP hearing requests that were timely received yet non-processable, and:

    1. were perfected late or

    2. there was no response or an inadequate response to the perfection request, and the taxpayer did not request an equivalent hearing:

    If ... Then ...
    Appeals determines that the timely CDP hearing request was non-processable and:

    • perfected late, or

    • no response or an inadequate response to the perfection request and the taxpayer did not request an EH

    		 close case with cc 14, Appeals sustains Collection’s Timeliness Determination
    Appeals determines that the CDP hearing request was timely received, and that the request was non-processable when submitted by the taxpayer:

    • the taxpayer was given a reasonable period of time to perfect the request

    • the taxpayer perfected the request outside of the perfection period or did not perfect due to no response or an inadequate response to the perfection request

    		close case with cc 14, Appeals sustains Collection’s Timeliness Determination
    Appeals determines that the CDP hearing request was timely received and that:

    • the timely CDP hearing request was not non-processable when submitted by the taxpayer,

    • the time period for perfection was not reasonable under the circumstances, or

    • the taxpayer perfected the request within the reasonable period specified by Collection because the taxpayer’s response was timely and adequate

    		close case with cc 15, Appeals does not sustain Collection’s Timeliness Determination

  12. For EH requests (including untimely CDP requests treated as EH requests) that were untimely received:

    If ... Then ...
    Appeals determines that the EH request was untimely received close case with cc 14, Appeals sustains Collection’s Timeliness Determination
    Appeals determines that the EH request was timely received, and the request was not originally a CDP hearing request determined to be untimely received close case with cc 15, Appeals does not sustain Collection’s Timeliness Determination

    • Appeals determines that the EH request was timely received

    • the EH request was originally a CDP hearing request determined to be untimely received

    then

    • Appeals must also determine whether the CDP hearing request was untimely

    If

    • Appeals determines that the CDP hearing request was untimely

    		 Appeals will mark the request as an EH request and close case with cc 15, Appeals does not sustain Collection’s Timeliness Determination
    Appeals determines that the CDP hearing request was timely Appeals will mark the request as a CDP hearing request and close case with cc 15, Appeals does not sustain Collection’s Timeliness Determination

  13. For EH requests (including untimely CDP requests treated as EH requests) that were timely yet non-processable, but:

    1. perfected after the reasonable time period for perfection specified by Collection, or

    2. there was no or an inadequate response to the perfection request:

    If ... Then ...
    Appeals determines that the EH request was untimely received close case with cc 14, Appeals sustains Collection’s Timeliness Determination
    Appeals determines that

    • the EH request was timely received and determines the request was non-processable when submitted by the taxpayer

    • the taxpayer was given a reasonable period of time to perfect the request

    • the taxpayer perfected the request outside of the perfection period or did not perfect due to no response or an inadequate response to the perfection request

    		close case with cc 14, Appeals sustains Collection’s Timeliness Determination
    Appeals determines:

    • that the EH request was timely received and determines the timely EH request was not non-processable when submitted by the taxpayer, or

    • the time period for perfection was not reasonable under the circumstances, or

    • the taxpayer perfected the request within the reasonable period specified by Collection because the taxpayer’s response was timely and adequate;

    Appeals determines:

    • the CDP hearing request was timely received if applicable

    		 close case with cc 15, Appeals does not sustain Collection’s Timeliness Determination

8.22.2.2.4.11  (10-30-2007)
Review and Documentation Requirements for Information Submitted Prior to Issuing Notice of Determination or Decision Letter

  1. Appeals employees will:

    1. Review all financial or other information submitted by taxpayers or their representatives up to the point of issuance of the Notice of Determination or Decision Letter.

    2. Document if the taxpayer fails to comply with specific deadlines for submission after being given reasonable extensions of time.

    3. Consider information received after the due date for supplying information but prior to issuance of the Notice of Determination /Decision Letter.

    4. Document the review and conclusion of late-provided information in the case activity record and on the attachment to the Notice of Determination/Decision Letter.

    5. Consider timely-submitted information, where the information is not timely associated with the file.

8.22.2.2.4.12  (10-30-2007)
Review and Documentation Requirements for Information Submitted Subsequent to Issuing Notice of Determination or Decision Letter

  1. You do not need to review and/or consider information from the taxpayer that is received after the issuance of the Notice of Determination/Decision Letter and while the case is being held in suspense for potential court action.

  2. If the case has been closed in Appeals, forward the information to the appropriate Collection function; if the case is still in suspense, place the information in the administrative file; if the case is docketed, forward the information to the assigned Area Counsel attorney.

8.22.2.2.5  (03-11-2009)
CDP Tracking System (CDPTS)

  1. The Collection Due Process Tracking System (CDPTS) is a cross-functional inventory system to track CDP Inventory from time of receipt through resolution.

  2. It allows Appeals and Compliance to:

    1. research CDP cases utilizing an IDRS Command Code "CDPTR " (format=CDPTRTXXX-XX-XXXX)

    2. input and update CDP cases via the web based Intranet system

  3. Collection adds a case to the CDPTS upon receipt of a processable CDP or EH request. As the case is processed, the CDPTS is updated with new stages to reflect the current status of the case.

  4. When the module is added to the CDPTS, a TC 971 is systemically generated with an Action Code (AC). The following list contains the TC 971 Action Codes relevant to the CDPTS. These action codes:

    1. identify when a hearing request is received and closed

    2. exclude module(s) from selection by the automated levy programs when appropriate

    Action Code Description
    Action Code 275 Only Timely received CDP Lien hearing request
    Action Codes 275 AND 630 When AC 630 posts with a TC 971 AC 275 the timely hearing request involves a levy issue
    Action Code 276 CDP issue resolved and CDP request withdrawn in Collection (lien, levy or both)
    Action Code 277 CDP hearing resolved by Appeals-Notice of Determination issued, taxpayer waived judicial review, or taxpayer withdrew hearing request (lien, levy or both)
    Action Code 278 EH (lien or levy) request received
    Action Code 279 EH resolved and EH request withdrawn in Collection (lien or levy)
    Action Code 280 EH resolved by Appeals - Decision Letter issued or taxpayer withdrew hearing request (lien or levy)
    Action Code 630 Timely CDP levy hearing request received (must post with an AC 275 - see above)

  5. There are 10 stages in the CDPTS. Each stage reflects the process that a CDP or Equivalent Hearing case can follow. Not all stages are applicable in all situations.

    Stage Title Stage Title
    1 Receipt of Hearing Request 9 Tax Court Decision Date
    2 Reserved 10 District Court Complaint Date (effective 10/17/06 all judicial reviews are in Tax Court)
    3 Transferred to Appeals 11 District Court Decision Date
    4 Received By Appeals 12 Resolved Prior to Appeals Consideration
    5 Discontinued (previously used when ARI/OI issed to Compliance) 13 Appeals Case Closing Actions Completed
    6 Discontinued (previously used when ARI/OI returned from Compliance) 14 Closed Case Received in Collection
    7 Appeals Decision Reached 15 Discontinued Retained Jurisdiction Case Received in Appeals
    8 Tax Court Petition Date 16 Discontinued Retained Jurisdiction Case Closed
        24 Concluding Actions Taken

  6. Stage 1 - Collection receives a processable CDP or EH hearing request.

  7. Stage 3 - Collection transfers case to Appeals. Collection will identify the type of case that is being transferred with one of the following:

    • A - Doubt as to Liability issues

    • B - Collection Alternative OIC is primary issue

    • C - Collection Alternative installment agreement is primary issue

    • D - In-business Trust Fund Taxpayer- Not Current with FTDs

    • H - Constitutional/frivolous argument

    • I - Issue resolved but taxpayer did not withdraw hearing

    • J - Collection alternative-other-is the primary issue (e.g., hardship)

    • K - Contact made with taxpayer but unable to resolve issue

  8. Stage 4 - Appeals (APS) receives CDP or EH case.

    1. APS will print the Case Listing screen after they update to Stage 4.

    2. The hearing officer must review the screen and ensure the information is consistent with the case summary cards. The hearing officer will promptly submit corrections or update requests to their local APS and monitor that the corrections or updates are made.

    Note:

    APS is responsible for inputting all CDPTS updates while case is in Appeals jurisdiction.

  9. Stage 7 - Appeals Decision Reached.

    1. Input when the Decision/Determination/Closing letter is issued. The Reason Code that identifies the summary result of the hearing (from the "Disposal Information" section of the CDP customized Form 5402) is input at Stage 7. The Reason Code selections are:

    • CS - Collection Sustained

    • CA - Collection Alternative Reached

    • WD - Withdrawal

    • PR - Premature Referral

  10. The Resolution Reason Code, input at Stage 7, identifies the major issue discussed or addressed in the hearing and indicates the basis for your decision. The selections are:

    Resolution Reason Codes
    IA - Installment Agreement Accepted ID - Installment Agreement Denied
    FP - Full Pay NC - Currently Not Collectible
    AB - Abatement/Adjustment (non-tax) granted AD - Abatement/Adjustment (tax) granted
    AC - Abatement/Adjustment (non-tax) denied AT - Abatement/Adjustment (tax) denied
    UL - Unable to raise liability RC - Reasonable cause not established
    LD - Lien discharged LS - Lien subordinated
    LR - Lien release LN - Lien withdrawn
    CF - Collection facilitated PF - Premature filing
    OC - Offer in Compromise accepted OD - Offer in Compromise denied
    IS - Innocent Spouse relief granted (full or partial) TD - Taxpayer Delay
    IR - Innocent Spouse relief denied (full or partial) CE - CSED expired
    CO - Lack of compliance with filing and/or paying AI - Advocate Involvement
    FV - Frivolous/Constitution argument presented NR - No Response
    IV - Invalid request/premature request OT - Other

  11. Stage 8 - Tax Court Petition Date.

  12. Stage 9 - Tax Court Decision Date.

  13. Stage 10 - District Court Complaint filed.

  14. Stage 11 - District Court Decision Date.

  15. Stage 13 - Case is closed in Appeals.

    Note:

    If a Notice of Determination is issued, Stage 13 is input after completion of the suspense period and, if applicable, any court reviews.

    Note:

    The module will automatically update from Stage 13 to Stage 24 where APS takes the final action on the case and enters "Return to Appeals" in Stage 13.

  16. Stage 24 - Concluding actions, such as input of payment agreement, are complete.

8.22.2.2.5.1  (03-11-2009)
Establishing on CDPTS, the partners individual request to a partnership liability

  1. Under state law, general partners in partnerships are liable for taxes assessed against the partnership. The Supreme Court in United States v. Galletti, 541 U.S. 114 (2004), held that the Service’s assessment against a partnership serves to make the general partner liable for the tax. While the Supreme Court in Galletti did not address administrative collection, Galletti is consistent with the Service’s long-standing legal position that it can enforce a tax lien and take administrative levy action against a general partner based on the assessment and notice and demand directed to the partnership. See Chief Counsel Notice 2005-003.

  2. The Service will give separate CDP levy or lien notices to all general partner(s) whose property the Service intends to levy or to the partners listed on the NFTL as being liable for a partnership’s employment taxes.

  3. The hearing request is established on CDPTS under the partnership EIN.

    1. The partners SSN. is listed as the secondary TIN.

    2. The TP TYPE is "T" (Partnership Only).

    Note:

    A TC 520 cc 76/77 is not placed on the partnership module for the partners individual hearing request.

  4. The partner's individual CDP hearing request DOES NOT affect Collections ability to collect from the partnership or other individual partners' assets. The partner's individual CDP hearing request DOES affect the Service's ability to levy a partner's individual assets to collect the partnership liability that is the subject of the CDP levy notice.

8.22.2.2.6  (03-11-2009)
CDP - Uniform Acknowledgment and Substantive Contact Letter requirements

  1. Taxpayers are sent an acknowledgment letter, generally the Uniform Acknowledgment Letter 4141, within 30 days from when the case is received in Appeals. The purpose of the acknowledgment letter is:

    1. to provide a contact person's name and phone number

    2. inform the taxpayer what they can expect from Appeals in the resolution of their case

    3. advise that penalties and interest continue to accrue

  2. Use the combination UAL/Substantive Contact Letters (SCL) or Substantive Contact Letter appropriate for the case:

    Letter Number Purpose Time frame for Issuing Issued By
    3846 (2008 rev)

    • UAL language (optional)

    • Solicits withdrawal of frivolous and/or delaying issue

    • information about imposition of section 6702(b) penalty

    • informs that taxpayer is not entitled to a face-to-face hearing

    • 15 days if response received from L4380 with relevant issue but frivolous issue not withdrawn. See IRM 8.22.2.2.10.3.2.

    		Hearing Officer or their designee
    3855 Routine SCL

    • 30 days from assignment to hearing officer

    • 15 days if response received from L4380 with relevant issue and frivolous issue withdrawn. See IRM 8.22.2.2.10.3.1.

    		Hearing Officer or their designee
    3999 Both UAL and SCL language 30 days from when case is received in Appeals Hearing officer or their designee

    Note:

    Neither the Uniform Acknowledgement Letter nor the Substantive Contact Letter are required by statute. Therefore the sending of these letters is not governed by RRA 98, PL 105-206, IRC 3201(d), which requires duplicate correspondence to joint filers at the same address.

  3. Generating Letters 4141, 3846, and 3999 from ACDS:

    1. populates the ACDS ACKLTR field

    2. prints the CARATS sub-action code CO-UAL on the case activity record

  4. The hearing officer must clearly document when they were "reassigned" a case to be able to determine the date commencing the substantive contact requirement (in the event the case was screened or transferred from a different office)

    Note:

    If the case was first assigned to a Collection Specialist for screening, the 30-day requirement to issue a SCL begins with assignment to the hearing officer.

    Caution:

    Only those CDP periods listed on an existing Form 2848 may be discussed with an authorized representative. The hearing officer can notify the taxpayer and the representative by phone or in writing of any defects and the Form 2848 can be amended to add additional periods.

  5. 30-day SCL exceptions:

    1. In-business pyramiders. See IRM 8.22.2.2.6.5. The subsection covers contact requirement.

    2. CDP/EH hearing requests received by COIC and forwarded to Appeals during COICs investigation of a CDP OIC. The 30 days to issue an SCL does not start until Appeals receives COICs preliminary OIC recommendation. Once received, the hearing officer must send a substantive contact letter within 30 days.

    3. Requests with solely frivolous/delaying issues where the taxpayer was first issued Letter 4380. See IRM 8.22.2.2.10.3.2.

  6. All Substantive Contact Letters include a discussion of alternatives or asks for clarification of the taxpayer's statement on the Form 12153 about the issue(s) to be addressed at the conference.

  7. The hearing officer also uses the Substantive Contact Letter to:

    • Schedule a telephone conference.

      Caution:

      Scheduling a telephone conference requires that the taxpayer is provided a specific date and time that they should call in or that they will be called. This requirement is not met by simply advising the taxpayer to call to schedule a conference.

    • Informs taxpayers of the opportunity for a face-to-face conference upon request if they are eligible. If they are not eligible, how they can become eligible; that the conference may be held at a location most convenient for them, e.g., Appeals office closest to their residence, place of employment or school.

    • Asks for the filing of any delinquent returns required to be filed.

    • Asks for payment of estimated tax or making of deposits, if required.

    • Asks for any other necessary information, such as a collection information statement.

    • Explains non-frivolous issues that can be raised.

    • Discusses the letter(s) that will be issued at the conclusion of Appeals consideration.

    • Explains consequences of taxpayers' failure to respond or participate in the hearing process.

8.22.2.2.6.1  (03-11-2009)
Pre-Substantive Contact Letters on Resolved Accounts

  1. The AARS, during the screening process, or the hearing officer, during initial analysis, may determine that the taxpayers liability was resolved with one of the following:

    1. an adjustment

    2. installment agreement

    3. placement of the account in currently not collectible status

    4. a refund offset.

  2. The AARS or the hearing officer may solicit a withdrawal of a resolved case prior to issuance of the Substantive Contact Letter provided that the taxpayer has not disputed the liability.

    1. Use Letter 4388 to solicit a withdrawal

    2. Allow the taxpayer 14 days to submit a withdrawal

  3. If the taxpayer does not withdraw the CDP/EH hearing request issue the Substantive Contact Letter within 30 days of assignment to the hearing officer. See IRM 8.22.2.2.6.

  4. If the AARS solicits a withdrawal, doesn't receive it AND keeps the case to work, the AARS must issue the SCL within 30 days of their assignment.

  5. Examples of a resolved case where a pre-substantive contact is appropriate:

    Example:

    Collection enters into a streamlined payment agreement with the taxpayer after the taxpayer filed for a CDP Levy hearing. The taxpayer does not sign a withdrawal of the levy hearing request. The AARS sends the taxpayer Letter 4388 and the taxpayer signs the withdrawal; the AARS closes the case.

    Example:

    The taxpayer disputes a CDP Notice of Intent to Levy on their 2001 income tax liability and requests an installment agreement. During the screening process, the AARS determines that the 2001 liability has been resolved through a refund offset from the taxpayers economic stimulus check. The AARS send the taxpayer Letter 4388, explains how the liability has been paid by the offset and asks the taxpayer sign a withdrawal.


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