What Is a CDP Hearing?
A formal proceeding before Appeals giving taxpayers the right to challenge collection actions. Created by the IRS Restructuring and Reform Act of 1998. Triggered by two specific notices: Notice of Federal Tax Lien Filing and Final Notice of Intent to Levy.
The 30-Day Deadline
Strict and consequential. A timely request suspends collection activity and preserves Tax Court rights. Missing it allows only an "equivalent hearing" without collection suspension or Tax Court access. This makes the 30-day deadline one of the most important in tax law.
What Can Be Raised
Challenge the underlying liability (if no prior opportunity to dispute), challenge appropriateness of collection action, propose alternatives (installment agreement, OIC, CNC), raise spousal defenses, and challenge procedural validity of IRS actions. The Appeals officer must verify all legal and procedural requirements were met.
Strategic Use
Defensively: halts collection activity. Offensively: provides a forum for collection alternatives that may not have been considered. The CDP also creates the administrative record essential for any Tax Court review.
The CDP hearing right is one of the most important protections in the tax code. It should never be forfeited through inaction.