Responding to an IRS Collection Notice: A CDP Workflow for Practitioners

The first job with any IRS collection notice is to identify which notice it is, because only a Collection Due Process (CDP) notice under IRC 6330 (levy) or IRC 6320 (lien) comes with a 30-day window to request a CDP hearing. Miss it and the client loses Tax Court review and the collection statute suspension, plus the levy stay on a levy notice. My workflow: identify the notice, calendar the right date, file a clean Form 12153, and only then work the collection alternative.

Key Takeaways: Working an IRS Collection Notice Without Losing CDP Rights

• The IRM treats the CP 504 as an IRC 6331(d) notice. CDP hearing rights come from the IRC 6330 notice, such as Letter 1058 (L1058) or the ACS notice coded LT11.
• A levy CDP hearing must be requested within the 30-day period that starts the day after the date of the CDP Notice. Actual receipt is not required.
• A timely request suspends the levy actions at issue and the collection statute under IRC 6502, and it preserves Tax Court review.
• After the 30 days, the client can still request an equivalent hearing within one year, but with no Tax Court review under 6330 and no required pause in collection.
• With narrow exceptions, no levy while a proposed installment agreement is pending or in effect, though the IRS can still file a lien and offset refunds.

Which IRS Collection Notice Starts the 30-Day CDP Clock?

The clock runs from the date of the CDP Notice issued under IRC 6330, not from the date of a CP 504. The IRM describes the CP 504 as an IRC 6331(d) notice, a different notice under a different Code section. IRM 5.1.9.3.14 makes the distinction in one line:

"If no IRC 6331(d) notice (CP 504 notice or Status 58 notice) has been issued, then issuing the L-1058 meets both the requirements of IRC 6331(d) and IRC 6330."

The Automated Collection System issues its own version. Under IRM 5.11.1.3.3.1, "ACS also issues a Notice of Intent to Levy/Notice of a Right to a Hearing," and an LT11 action code in the ACS history tells a revenue officer not to issue an L1058 for the same liabilities. The same section warns that an LT11 on the transcript "may have been stopped before it was sent."

The framework sits in IRM 5.11.1.3.2. In most cases, before property can be levied, the taxpayer must be given a Notice and Demand, a Notice of Intent to Levy, a Notice of a Right to a CDP Hearing, and a Notice of Third-Party Contact. Both the 6331 and 6330 notices "must be given at least 30 days before the day of the first levy for that tax liability."

So I read the letter number and date first. A CP 504 means levy is coming and I need to know whether a 6330 notice has gone out. An L1058 or LT11 means the CDP clock may already be running. The transcript settles it.

How Long Does the Client Have to Request a CDP Hearing?

For a levy notice, the client has 30 days, counted from the day after the date printed on the CDP Notice. Treas. Reg. 301.6330-1(b)(1) reads:

"A taxpayer is entitled to one CDP hearing with respect to the unpaid tax and tax periods covered by the pre-levy or post-levy CDP Notice provided to the taxpayer. The taxpayer must request the CDP hearing within the 30-day period commencing on the day after the date of the CDP Notice."

The clock does not wait for the client to open the envelope. Under A-A9, a notice "properly sent to the taxpayer's last known address or left at the taxpayer's dwelling or usual place of business is sufficient to start the 30-day period," and "Actual receipt is not a prerequisite to the validity of the CDP Notice." A client who brings in a letter dated three weeks ago has about nine days left.

Timeliness is judged under the section 7502 and 7503 rules if the request is properly transmitted and addressed, so I send every request by certified mail and keep the receipt. The 30 days are not extended for a taxpayer living outside the United States (A-C5). If the IRS determines it failed to properly provide the notice, A-A10 says it "will promptly provide the taxpayer with a substitute CDP Notice."

Lien notices run on a slightly different clock. Under Treas. Reg. 301.6320-1, the IRS notifies the taxpayer not more than five business days after filing the Notice of Federal Tax Lien (NFTL). The request is due "within the 30-day period that commences the day after the end of the five business day period following the filing of the NFTL."

What Goes Into a Valid Form 12153 Request?

A valid CDP request is a dated written request containing six items, and the regulation says "Taxpayers are encouraged to use Form 12153," which comes with the CDP Notice. Under A-C1(ii), the request must include:

• Name, address, daytime telephone number, and taxpayer identification number
• The type of tax involved
• The tax period at issue
• A statement that the taxpayer requests a hearing with Appeals concerning the proposed levy
• The reason or reasons the taxpayer disagrees with the proposed levy
• The signature of the taxpayer or the authorized representative

The Form 12153 (July 2022) instructions add the mechanics: send it "to the address for requesting a hearing (not the payment address) shown on your CDP notice," include a copy of the notice, and attach an executed Form 2848 if the representative signs, unless one is already on file. A timely request missing an item can still be perfected "within a reasonable period of time after a request from the IRS" and is then treated as timely.

The reasons line deserves the most care. Under A-F3, the Tax Court can consider only an issue "that was properly raised in the taxpayer's CDP hearing," and an issue is not properly raised if Appeals was never asked to consider it or received no evidence on it after a reasonable opportunity. The form instructions add that the client can generally dispute the amount owed if they received no deficiency notice or had no prior opportunity to contest it. I list every issue.

What Does a Timely CDP Request Protect?

Section 6330(e) is what the 30 days buy. Under A-G3, "levy actions that are the subject of the requested CDP hearing under that section shall be suspended." The IRS may still file NFTLs, offset overpayments, levy periods not covered by the notice once their own CDP requirements are met, levy a state tax refund, and act when collection is in jeopardy. A lien hearing, by itself, does not suspend levy: Treas. Reg. 301.6320-1 says levy actions "are not the subject of a CDP hearing under section 6320," although a levy still needs its own section 6330 notice.

The collection statute also stops. Treas. Reg. 301.6330-1(g)(1) suspends the section 6502 period "until the date the IRS receives the taxpayer's written withdrawal of the request for a CDP hearing by Appeals or the determination resulting from the CDP hearing becomes final," and never lets it expire before the 90th day after the withdrawal or final determination. Form 12153 puts it plainly: the suspended time is added to the time remaining in the 10-year period the IRS has to collect. Near the end of the statute, discuss that cost before filing.

Unless the request is withdrawn, Appeals must issue a Notice of Determination after a timely CDP request, and the taxpayer may appeal to the Tax Court "within the 30-day period commencing the day after the date of the Notice of Determination." Calendar that second clock the day the determination arrives.

What If the 30 Days Have Already Passed?

The client can still request an equivalent hearing, a weaker hearing. Under Treas. Reg. 301.6330-1(i), a taxpayer who misses the CDP window "may nevertheless request an administrative hearing with Appeals, which is referred to herein as an equivalent hearing." For a levy notice, the written request is due within one year starting the day after the date of the CDP Notice. For a lien notice, the year starts the day after the end of the five-business-day period following the NFTL filing. A late CDP request is offered an equivalent hearing without a second request.

What the client gives up is the reason the 30 days matter:

• Appeals issues a Decision Letter, not a Notice of Determination.
• Section 6330 does not authorize a Tax Court appeal of that decision, apart from a limited section 6015 path.
• Collection action is not required to be suspended, and Form 12153 states the equivalent hearing does not suspend the 10-year period.

Appeals conducts both hearings, and the file discipline I describe in defending a research memo in an IRS Appeals conference carries over.

Where Do Collection Alternatives Fit?

Inside the CDP hearing, not in place of it. Form 12153 has a box for "I am unable to pay in full and would like a collection alternative," so the request itself puts an alternative on the table.

Installment agreements. Under Treas. Reg. 301.6159-1(f), no levy may be made while a proposed installment agreement is pending, for 30 days after a rejection, while an agreement is in effect, and for 30 days after termination, with exceptions for waiver, proposals submitted solely to delay, and jeopardy. The IRS can still offset overpayments and file an NFTL. Watch the vocabulary: the July 20, 2026 revision of IRM 5.14.1 replaced Streamlined and Express installment agreement references with the Simple Payment Plan process and swapped the non-Streamlined Installment Agreement for the newly defined non-Simple Installment Agreement.

Currently not collectible. Under IRM 5.16.1.2.9, "A hardship exists if a taxpayer is unable to pay reasonable basic living expenses," based on Form 433-A or Form 433-B. Clients must be told that "interest and penalties will continue to accrue on the account even though the collection action is suspended," and the IRM directs that options such as an offer in compromise be discussed first.

Offer in compromise. IRM 5.8.1.15.2 requires the taxpayer to state the basis: Doubt as to Collectibility, Doubt as to Liability, or Effective Tax Administration.

IRM Part 5 is where these procedures live, which is why it sits on my list of research sources representation practitioners actually need.

A First-Meeting Checklist

1. Copy every notice and record the letter number and printed date.
2. Pull account transcripts for each listed period.
3. Get Form 2848 signed and calendar the 30-day CDP deadline, with the one-year equivalent hearing date as a backstop.
4. Mail Form 12153 by certified mail to the hearing address, notice attached, every issue listed.

Calendar the date before you discuss strategy. Strategy can wait a week, and the window cannot. When I need the exact Q&A from Treas. Reg. 301.6330-1 while a client is waiting, I run the question through Tax Orator, which returns the regulation text with the citation attached.