Guide to IRS Form 12153 & Collection Due Process Hearings

Form 12153: IRS Collection Due Process Hearing

If you fail to pay your tax bill, the IRS has processes in place to lawfully seize your assets to settle repayment. This is called a tax levy. If the IRS intends to place a levy on your property or other assets, they will formally notify you through a certified letter. Luckily, you can still stop the levy, but you have to act quickly.

If you receive a levy notice, you can appeal and request a Collection Due Process (CPD) hearing by filling out IRS Form 12153 within 30 days of receiving the notice. To get help now, contact us today, or keep reading for an overview of the details of this IRS relief form.

What Is a Collection Due Process Hearing?

A CPD hearing is an opportunity for taxpayers to appeal IRS liens or levies and discuss alternatives to enforced collection. The hearing allows you to explain your circumstances to the IRS. You can contest the amount of tax owed, establish a payment plan, request specific types of tax relief, or inquire about other alternatives to a levy.

A CPD hearing is informal and can take place over the phone or in person. During the hearing, the Settlement Officer will go through the facts of the disagreement and the documents you have provided. They typically aim to settle the issue in a single phone call while considering the following:

  • The promptness of your request.
  • Any defenses or challenges to your tax liability.
  • Alternative collection approaches.
  • The appropriateness of a lien or levy in proportion to the amount owed.

If you are disputing the tax owed, the hearing will be focused on your appeal. Otherwise, CDP hearings are largely concerned with assisting you in negotiating a payment plan or finding other ways to address your tax liability.

Notice of Determination

After the hearing, you will be issued a Notice of Determination. The determination letter is addressed to the taxpayer and provides an overview of the Appeals decision. It includes details about the following:

  • Did the IRS properly deliver the lien or levy by registered mail with a receipt?
  • Will a lien or levy be imposed?
  • What are the details of any payment arrangements, if any were made?
  • Is the IRS considering innocent spouse relief or another defense?
  • Was there any relief offered?

You have exactly 30 days after receiving the Notice of Determination to file an appeal with the Tax Court or the US District Court.

When Should You Request a Collection Due Process Hearing?

If you receive a Notice of Federal Tax Lien or a Notice of Intent to Levy, you may request a Collection Due Process hearing. Generally, you need to receive a notice outlining your right to a hearing before you can make this request.

Typically, the IRS will send one of the following notices:

  • Letter 1058 (Final Notice of Intent to Levy and Notice of Your Right to a Hearing)
  • Letter 11 (Final Notice of Intent to Levy and Notice of Your Right to a Hearing)
  • CP90 (Final Notice of Intent to Levy)
  • CP92 and CP242 (Notice of Levy on Your State Tax Refund)
  • Letter 3172 (Notice of Federal Tax Lien Filing and Right to a Hearing)

It’s important to note that the IRS doesn’t allow CPD requests for just any reason, including refusal to pay taxes on ethical or religious beliefs. Per IRS guidelines, you can only request a CPD hearing for genuine reasons, including:

  • You are unable to repay your debt due to financial difficulties.
  • You have a critical illness, and your medical costs prevent you from repaying.
  • You rely on unemployment or Social Security benefits.
  • You’d like to make a formal request for an alternative arrangement, such as a payment plan.
  • You want the lien removed so you can sell the underlying asset and pay the IRS.
  • You need the lien removed from the public record because you have already paid in full or are engaged in a payment plan.

How Do You Request a Collection Due Process Hearing?

Form 12153 must be completed in order to request a Collection Due Process hearing. A levy hearing must be requested within 30 days after the notice date. If the IRS imposes a federal tax lien, you must be notified within five days and have 30 days to request a hearing.

Both of these deadlines are strictly enforced by the IRS. Only if you postmark the IRS form by the final day of the 30-day period (or the last day of the 30-day plus five business days) after receiving your Intent to Levy or Tax Lien notice will the IRS respond to your request.

If you miss the CDP hearing deadline, you can request an Equivalent Hearing. You have 12 months from the date of your notice to request this type of hearing. Form 12153 can also be used to request an equivalent hearing – simply check the box on the form’s second question (which asks if you require an equivalent hearing).

Please remember that to request an equivalent hearing, and you must tick the option on Form 12153. If the IRS receives your request for a CDP hearing late, the agency will not automatically convert it to an equivalent hearing. You must specifically request this type of hearing.

How to Fill in Form 12153

Form 12153 is quite straightforward, broken into the following sections:

Your Information

The first section concerns the basis for your hearing request, from which you can choose:

  • Filed Notice of Federal Tax Lien.
  • Notice of Proposed or Actual Levy.

The form then requests basic information, including name, address, ID number, phone number, and the best time to contact you. You will also be required to fill in your tax information as shown on your lien or levy notice. This includes:

  • Type of tax – income, employment, excise, etc.
  • Tax form number
  • Tax period or periods

Note that you will not have to complete this section if you include a copy of the lien or levy notice you are appealing against.

Your Appeal

The rest of the form concerns your appeal. In section 8, you must declare your reason for requesting a CPD hearing.

If you are requesting a hearing to dispute the tax owed, you can select one of the following options:

  • You are not liable for the tax the IRS is trying to collect.
  • Your taxes were terminated in bankruptcy.
  • You’ve already made payments.
  • Other – you can explain any issues or reasons to dispute the tax not listed above.

If You Are Unable to Pay

If you are not appealing to dispute the tax, but are unable to pay the amount, you can choose the following options:

  • You are unable to pay due to financial hardship.
  • You would like to request a collection alternative.

If you have chosen a collection alternative or declared that you cannot pay the tax, you must complete section 9. Here you can select one of the following options:

If you are currently unable to pay or wish to pursue a collection alternative, such as an Installment Agreement or an Offer in Compromise, you must submit a financial statement, Form 433-A (individuals) or Form 433-B (companies), with your request unless you qualify for a financial statement exception.

You do not need to submit a financial statement if:

  • You owe less than $50,000 and can afford to pay off the bill in installments over six years or by the collection statute expiration date.
  • You owe less than $100,000 and can pay off the balance with a short-term payment plan which gives you 180 days to pay.
  • You’re applying for an Offer in Compromise based on a Doubt as to Liability – if you believe you do not owe a portion or all of the tax bill.

Innocent Spouse Release

If appropriate, you can also request innocent spouse relief – simply check the box under “Reasons for requesting a CPD hearing.”

Innocent spouse relief may exempt you from paying additional taxes if your spouse understated taxes due on your joint tax return and you were unaware of the inaccuracies. It’s only available for taxes owed on your spouse’s earnings from employment or self-employment. You cannot claim relief for taxes owed on:

  • Your personal earnings
  • Household taxes
  • Individual Shared Responsibility payments
  • Taxes on business
  • Penalties for trust fund recovery on employment taxes

Several conditions must be met in order to qualify, including:

  • You and your spouse submitted a joint tax return.
  • You were unaware of your spouse’s errors on the return when you signed it.
  • You were not aware of any underreported income or wrongfully recorded deductions at the time.
  • You had no cause to be suspicious of the tax return you signed, and you made no inquiries about any of the dubious items on the return.
  • The items on the tax return in question were listed differently than in previous years, and this is not indicative of a pattern.

If you meet these conditions, then you may be eligible for innocent spouse relief and will not be held accountable for the amounts owed for unpaid taxes. You must request innocent spouse relief within two years of receiving an IRS notice.

The Bottom Line

If you receive a Notice of Federal Tax Lien or a Notice of Intent to Levy, you may request a Collection Due Process hearing. In order to request a hearing, you must fill out Form 12153 and submit all required information – including your personal details, tax information, and reasons for the appeal.

After the hearing, you will receive a Notice of Determination – a summary of the Appeals decision. At that point, you have another chance to appeal.

Frequently Asked Questions (FAQs)

How and where should I send Form 12153?

To find out where to mail your Official IRS Form 12153, you will need to contact the appropriate IRS department. The official IRS notice for a tax lien or levy will include an address. It is critical that you contact the designated IRS department before completing the form to determine who you should address the request form to.

Can I request a CDP hearing if I received a CP504 (Urgent Notice)?

Notice CP504 informs you that the IRS intends to seize your assets for unpaid taxes. However, unlike the notices mentioned above, CP504 does not outline your right to a CPD hearing and instead specifies that you will receive another notice regarding your right to a hearing. In most cases, you will receive a CP504, followed by one of the notices stated above.

How can I find out who is in charge of my case?

The IRS can tell you if your case has been assigned to an Appeals employee and how to get in touch with them. The allocated Appeals employee is your best point of contact for all Appeals-related matters. Appeals can be contacted at 855-865-3401, and you can leave a message with your name and ID number. However, it’s important to note that the Appeals will not contact you back if they have not yet received your case.

When can I expect to hear from Appeals?

You can expect to hear from the IRS after they have received and examined your case. If you haven’t heard from them 120 days after filing the CDP request, contact the IRS office to which you submitted your appeal request.

Who is in charge of the CDP hearing?

A Settlement Officer (SO) from the IRS Independent Office of Appeals conducts the CDP hearing. The Settlement Officer has no prior involvement with your tax issue, and they examine the situation objectively.

Can I be represented by an attorney at a Collections Due Process Hearing?

You can have a tax attorney represent you at a CPD hearing. You can also represent yourself. You must file an IRS Form 2848 for Power of Attorney if you want an attorney to appear as your authorized representative. A tax lawyer who is familiar with levies and liens can advise you on how to proceed if you want to prevent an IRS collection action.

What if I don’t agree with the CDP hearing results?

If you disagree with the outcome of the CDP hearing, you may petition the US Tax Court. The Tax Court will then consider the appeals court’s ruling. The Tax Court’s judgment is definitive once it is rendered. Unfortunately, you cannot appeal to the Tax Court if you have an equivalent hearing.

How do I get help with Form 12153?

Need help? Then, contact us today. At the Timothy S. Hart Law Group, we have extensive experience helping clients request CDP hearings or take other steps to avoid liens and levies. Dealing with the IRS can be stressful, but with the right help, you can stop the scary IRS notices, eliminate your tax debt and get back into good standing with the IRS.

Attorney Timothy Hart

Timothy S Hart, the founding partner of the tax law firm of Timothy S. Hart Law Group, P.C. is both a New York Tax Lawyer & Certified Public Accountant. His area of expertise includes innovative solutions to solve your Internal Revenue Service and New York State tax problems, including tax settlements through the Federal and New York State offer in compromise programs, filing unfiled tax returns, voluntary disclosures, tax audits, and criminal investigations. [ Attorney Bio ]