What CDP means
Collection Due Process, abbreviated CDP, is the federal procedure under Internal Revenue Code sections 6320 and 6330 for reviewing certain filed federal tax liens and proposed or completed levies. The hearing is conducted by the IRS Independent Office of Appeals, not by the Collection employee who initiated the action.
How a taxpayer requests it
The taxpayer normally submits Form 12153 or a signed written request containing the same information to the office and address shown on the CDP notice. The request must identify the tax periods and reasons for disagreement. The deadline shown on the notice is critical.
Issues Appeals may consider
Appeals verifies that legal and administrative requirements were met and balances efficient collection against intrusiveness. Depending on the facts, it may consider collection alternatives, lien remedies, hardship, spousal defenses, payment application, bankruptcy, and the underlying tax liability when there was no prior opportunity to dispute it.
Effect of a timely request
For a levy CDP case, a timely request generally suspends levy action for the affected tax and periods while the hearing and timely judicial review are pending. The federal collection limitations period is also suspended. A CDP request does not automatically remove a lien or eliminate the debt.
CDP hearing versus equivalent hearing
An equivalent hearing is the administrative route generally available when the taxpayer misses the CDP deadline but requests review within the later period stated in Form 12153. It may resemble a CDP conference, but it does not prohibit levy, does not suspend the collection period, and ordinarily does not allow Tax Court review of the decision.
CDP versus Collection Appeals Program
The Collection Appeals Program (CAP) is a different, often faster appeal route for a broader set of collection actions. CAP uses different timing and procedures, and its decision generally cannot be reviewed in court. The notice and IRS guidance determine which route is available.
Example
The IRS sends a final levy notice that states a CDP hearing deadline. The taxpayer timely files Form 12153, identifies the tax periods, explains a payment-application error, and proposes an installment agreement. Appeals reviews the collection action and the proposed alternative. If Appeals issues an unfavorable CDP determination, the taxpayer generally has 30 days to petition the U.S. Tax Court.