Collection Due Process Rights of Taxpayers

June 1999

As of January 19, 1999, taxpayers subjected to tax levies have a statutory right to a hearing before the Office of IRS Appeals ("Appeals") and a statutory right to a judicial review of the determination made by Appeals with regard to the levy. Those new rights were enacted by IRC §3401 of the Internal Revenue Service Restructuring and Reform Act of 1998 (the "Reform Act") as part of the so-called Collection Due Process ("CDP") hearing procedures.

With the exception of jeopardy cases and levies on state tax refunds, the IRS is prohibited from effectuating a levy before giving the taxpayer a pre-levy notice, a pre-levy opportunity for an administrative hearing, and a pre-levy opportunity to seek judicial review. See IRC §6330. Similar rules apply to the filing of a Notice of Federal Tax Lien ("NFTL") but the notice, hearing, and judicial review do not need to precede the filing of the NFTL. See IRC §6320. The new law specifies the issues to be considered by the Office of Appeals, but it provides little guidance for the standard of review to be used by the courts.

The Internal Revenue Service recently published temporary and proposed regulations to implement the Collection Due Process hearing requirements of the Reform Act of 1998. Like all rights granted to taxpayers, the law and IRS regulations place procedural and substantive restrictions on the exercise of those rights. Learning the details of those restrictions from your former client's malpractice complaint is probably the least desirable method of self-education. Wasting your time and your client's money pursuing remedies that aren't viable is the second least desirable method of gaining experience. You could always obtain a copy of the law and regulations and spend an otherwise enjoyable spring afternoon digesting them. But I'm assuming you'd prefer to have a brief summary of the critical matters until you actually have a client willing to pay for your expertise. So I'm going to stay out of the Title 26 Inn this month to review the critical portions of the CDP regulations with respect to levies. Before we begin the discussion of the CDP procedures, however, I want to briefly review the nature of the federal tax lien and the IRS's authority to collect unpaid tax liabilities by levy and seizure.

The United States acquires a lien on all property and rights to property of a taxpayer if an assessed federal tax liability is not paid within ten days after a Notice and Demand for Payment has been given to the taxpayer. The effective date of the assessment lien relates back to the date of the assessment for any portion of the assessed liability, including any subsequently accrued interest, that is not paid within the 10-day period following the notice and demand for payment. The assessment lien is commonly known as a secret lien because only the IRS and the taxpayer usually know its existence. Because of the obvious inequity that would otherwise result from the enforcement of the secret assessment lien, it is subordinated to certain specified priorities until the IRS has filed a Notice of Federal Tax Lien in the appropriate place. Other than those "super priorities," however, the assessment lien is valid against all other simultaneous attachments (ties go to the government) and all other subsequent lienors with respect to existing and after-acquired property and rights to property of the taxpayer.

The IRS is the most powerful (legal) collection agency in the United States. Its collection power is partially due to the extensive lien created by a tax assessment. The most important collection power of the IRS, however, is found in its authority to administratively levy upon and seize the property and rights to property of the taxpayer without resort to judicial process. (IRC §6334 sets forth certain property that is exempt from levy by the IRS, including special rules for the seizure of a taxpayer's personal residence and certain other property.) The source of the IRS's collection power is found in IRC §6331(a) which authorizes the IRS to administratively collect a federal tax liability by levy while the federal tax lien is in effect. A federal tax lien is generally in effect for a period of ten years from the date of assessment.

Before effectuating a levy the IRS is required to give the taxpayer a 30-day pre-levy Notice of Intent to Levy. Thus, the IRS cannot effectuate a levy until ten days after it has sent the taxpayer the required Notice and Demand for Payment, and until 30 days after it has sent the taxpayer a Notice of Intent to Levy. Although the IRS could theoretically combine the Notice and Demand for Payment with the Notice of Intent to Levy, it currently sends the Notice and Demand for Payment first, followed at a later time by the Notice of Intent to Levy. More often then not, several "we think you should pay us now" letters usually follow the Notice and Demand for Payment before a Notice of Intent to Levy is sent.

Prior to the Reform Act of 1998, taxpayers subjected to a federal tax lien or levy had very few statutory rights to challenge the IRS's collection action. In 1996 the IRS established a procedure allowing taxpayers to challenge IRS collection actions by taking an appeal to the Office of Appeals. The administratively-granted appeal right is known as the Collection Appeals Program, or "CAP." See IRM Part V, Chapter 5100, subsection 3:5181.31; Publication 1660, Collection Appeal Rights for Liens, Levies, Seizures, and Termination of Installment Agreements; Form 9423, Collection Appeal Request; and Publication 594, Understanding the Collection Process. Although the "CAP" is a step in the right direction, the standard of review is limited and there is no right to further challenge the determination of Appeals.

Congress also requires IRS to provide the taxpayer subject to a levy with a great deal of information as part of the Notice of Intent to Levy. IRC §6661(d) requires that the Notice of Intent to Levy contain a brief statement, in simple, nontechnical terms, setting forth (A) the statutory provisions relating to the levy and sale of property; (B) the procedures applicable to the levy and sale of property; (C) the administrative appeals available to the taxpayer with respect to levy and sale and the procedures relating to those appeals; (D) the alternatives available to taxpayers that could prevent levy on the property (including installment agreements); (E) the statutory provisions relating to redemption of property and the release of liens on property; and (F) the procedures applicable to the redemption of property and the release of a lien on property. The IRS complies with the requirements of IRC §6331(d) by enclosing, with the Notice of Intent to Levy certain IRS publications explaining the law, IRS levy and redemption procedures, administrative appeal processes and procedures, and various collection alternatives.

The Reform Act of 1998 provides taxpayers with a statutory right of appeal with respect to IRS levies and liens. See IRC §§6320 and 6330. The IRS must give taxpayers a pre-levy notice (and a prompt post-filing notice with respect to a filed NFTL). The required notice must set forth the taxpayer's right to a Collection Due Process hearing. The CDP hearing is held by the Office of Appeals. The determination of the Office of Appeals may be appealed to (A) the United States Tax Court, or (B) a district court if the Tax Court does not have jurisdiction of the underlying tax liability.

Taxpayers have 30 days to request a hearing with regard to a proposed levy. A timely request will prohibit the IRS from effectuating the levy with the exception of jeopardy cases and levies on state tax refunds. A timely request for a hearing will also suspend the statute of limitations for collection and criminal prosecution.

The taxpayer is entitled to only one hearing with respect to the taxable period to which the unpaid tax relates. Unless waived by the taxpayer, the hearing shall be conducted by an officer or employee who has had no prior involvement with respect to the unpaid tax at issue before the first hearing regarding a lien or a levy. To the extent practicable, a hearing with regard to a lien under IRC §6320 shall be held in conjunction with a hearing under IRC §6330 with regard to levies.

At the hearing, the appeals officer shall obtain verification from the IRS that the requirements of any applicable law or administrative procedure have been met. The taxpayer may raise at the hearing any relevant issue relating to the unpaid tax or lien, including appropriate spousal defenses, challenges to the appropriateness of collection actions, and offers of collection alternatives, which may include the posting of a bond, the substitution of other assets, an installment agreement, or an offer-in-compromise.

The taxpayer may also raise at the hearing challenges to the existence or amount of the underlying tax liability for any tax period if the person did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability. Except for a "change in circumstances" issue under IRC §6320(d)(2)(B), an issue may not be raised at the hearing if: (1) the issue was raised and considered at a previous hearing under IRC §6320 or in any other previous administrative or judicial proceeding, and (2) the person seeking to raise the issue participated meaningfully in such prior hearing or proceeding.

In addition to the information required under IRC §6331, IRC §6330 now states that no levy may be made on or after January 19, 1999, until 30 days after the IRS notifies the taxpayer in writing of the statutory right to a hearing before the Office of Appeals, except when the IRS determines that collection of the tax is in jeopardy or a levy is issued to collect State tax refunds due to the taxpayer. For jeopardy cases, and in cases where a levy is made on a State tax refund, the taxpayer will be given notice of a right to, and the opportunity for, a hearing within a reasonable time after the levy action has occurred. If the taxpayer requests such a hearing, the IRS is, in the absence of jeopardy, prohibited from levying upon the taxpayer's property until the determination reached by the Office of Appeals becomes final.

The CDP procedures do not replace existing statutory rights to an administrative hearing or judicial review. For example, taxpayers retain the right to a 60-day pre-assessment notice, administrative hearing, and judicial review thereof, for proposed assessments of trust fund employment taxes (the so-called 100% penalty under IRC §6672). See IRC §6672(b). Taxpayers also retain the post-assessment rights to an administrative appeal and judicial review thereof of the recently revised innocent spouse relief provisions under IRC §6015(e). Furthermore, the IRS will retain the Collection Appeals Program ("CAP") for post-assessment review of IRS collection activities. The temporary regulations also give taxpayers the right to what is known as an "equivalent hearing" to challenge IRS levies when the taxpayer would not otherwise be entitled to a Collection Due Process hearing. Unfortunately, these statutory and administrative rights are not well coordinated, leaving many procedural traps, much confusion, and potential lost opportunities for taxpayers.

The CDP temporary regulations for tax levies (IRC §6330) are contained in Treasury Regulations §301.6330-1T. They are entitled "Notice and opportunity for hearing prior to levy," and are divided into ten main topics: (a) Notification; (b) Entitlement to a CDP hearing; (c) Requesting a CDP hearing; (d) Conduct of CDP hearing; (e) Matters considered at CDP hearing; (f) Judicial review of Notice of Determination; (g) Effect of request for CDP hearing and judicial review on periods of limitation; (h) Retained jurisdiction of Appeals, (i) Equivalent hearing; (j) Effective date.

Same tax and tax period means the same type of tax (i.e., income, employment, estate, gift, excise) and the same tax period. Changes in the amount of the tax liability because of interest and penalty accruals do not change the "same tax and tax period," and thus do not give rise to additional CDP notices before levy can occur. A change in the amount of the tax liability due to additional assessments of the same tax for the same tax period, however, will require a new CDP Notice.

Substitute CDP Notice is a duplicate CDP Notice sent to a taxpayer because the first CDP Notice was not properly sent or given to the taxpayer (e.g., the first was sent to an address other than the taxpayer's last known address), but only if the taxpayer did not actually receive the first notice in time to file a request for a CDP Notice. See Reg. §301.6330-1T(a)(3)(A10). The "substitute CDP notice" provision is an attempt by the IRS to overcome the apparent consequences of a failure to give proper notice to the taxpayer.

First, the IRS is implying, but not directly stating, that a CDP Notice sent to the wrong address is nevertheless effective for purposes of IRC §6330 so long as the taxpayer actually receives the notice in time to file a request for a CDP hearing. Second, the "substitute CDP notice" provisions attempt to relieve the IRS of the consequences of what would otherwise be an illegal levy by treating the substitute CDP notice as sufficient notice under IRC §6330 despite its late timing. The statute, however, is very clear about the requirements for giving notice to taxpayers. Absent compliance with the statute, the IRS is prohibited from effectuating a levy. Although the "substitute CDP Notice" concept is a practical rather than technical approach when the IRS has failed to follow the letter of the law, the same consideration is not given to taxpayers under the regulations when they fail to follow the letter of the law, even though such failure would be of no practical consequence to the IRS.

Equivalent hearing is a hearing before Appeals with regard to an IRS levy for a taxpayer who has failed to timely request a CDP hearing. See Reg. §301.6330-1T(b)(2)(B2). The equivalent hearing will be held by Appeals and will generally follow Appeals procedures for a CDP hearing. Appeals will not, however, issue a Notice of Determination. Instead, Appeals will issue a Decision Letter. See Reg. §301.6330-1T(i)(1). In an equivalent hearing, Appeals will consider the same issues that it would have considered at a CDP hearing on the same matter. See Reg. §301.6330-1T(i)(2)(I1). The periods of limitation under IRC §6502, §6531, and §6532 are not suspended with respect to an equivalent hearing. See Reg. §301.6330-1T(i)(2)(I2). Collection action is not required to be suspended, although Appeals may request the IRS office with responsibility for collecting the taxes to suspend all or some collection action or to take other appropriate action if it determines that such action is appropriate or necessary under the circumstances. See Reg. §301.6330-1T(i)(2)(I3). A taxpayer cannot seek judicial review of the decision of Appeals with respect to an equivalent hearing, with the exception of the spousal defenses under IRC §6015. See Reg. §301.6330-1T(i)(2)(I5).

CDP notices will be sent for the first levy action to be taken after January 18, 1999 even if the IRS had issued a levy for the same tax and period before January 19, 1999. See Reg. §301.6330-1T(a)(3)(A4). A timely and properly addressed CDP notice is sufficient. Actual receipt of the notice by the taxpayer is not a prerequisite to the validity of the notice. See Reg. §301.6330-1T(a)(3)(A9). The IRS will not notify a known nominee of, a person holding property of, or a person who holds property subject to a lien with respect to the taxpayer of its intention to issue a levy. See Reg. §301.6330-1T(a)(3)(A1) and (A2).

A taxpayer is entitled to only one CDP hearing with respect to the tax and tax period covered by the pre-levy or post-levy CDP Notice. Taxpayers must timely (within 30 days) request a CDP hearing in response to the first CDP Notice issued with respect to a tax for a tax period. Subsequent IRS levy or collection notices for the same tax and tax period shown on the first CDP Notice will not give the taxpayer another opportunity for a CDP hearing if the taxpayer did not timely request a hearing for the first CDP Notice. A taxpayer may request an "equivalent hearing even if the taxpayer is not entitled to a CDP hearing. See Reg. §301.6330-1T(b)(2)(B2).

Even if the IRS mistakenly sends a second CDP Notice (other than a "substitute CDP Notice"), the taxpayer is not entitled to a second CDP hearing. See Reg. §301.6330-1T(b)(2)(B4). The taxpayer is entitled to a CDP Hearing before Appeals when the IRS provides a taxpayer with a substitute CDP Notice and the taxpayer timely requests a CDP hearing. See Reg. §301.6330-1T(b)(2)(B3).

The taxpayer must file a written request for a CDP hearing during the 30-day period that commences the day after the date of the CDP Notice. See Reg. §301.6330-1T(c)(1). A written request in any form that requests a CDP hearing will be acceptable. The request must include the taxpayer's name, address, and daytime telephone number, and must be signed by the taxpayer or the taxpayer's authorized representative and dated. See Reg. §301.6330-1T(c)(2)(C1)(i). Note, however, that spousal defenses under IRC §6015 must be raised by submission of a written request to preserve all of the rights to review afforded by IRC §6015. See Reg. §301.6330-1T(e)(2).

The IRS will include with the CDP Notice a Form 12153, Request for a Collection Due Process Hearing, which can be used by the taxpayer to request a CDP hearing. See Reg. §301.6330-1T(c)(2)(C1)(i). Use of that form to request a CDP hearing, however, is not mandatory. A copy of the form can be obtained or by calling, toll free, 1-800-829-3676, or from the web site of the Internal Revenue Service at http://www.irs.ustreas.gov/prod/cover.html .

The mailing rules, under IRC §7502 and IRC §7503 and the regulations thereunder, apply to determine the timeliness of the taxpayer's request for a CDP hearing, if properly transmitted and addressed as provided in Reg. §301.6330-1T(c)(2)(C6). The 30-day period within which a taxpayer must make a request for a CDP hearing is not extended because the taxpayer resides outside the United States. See Reg. §301.6330-1T(c)(2)(C5).

The written request for a CDP hearing should be filed with the IRS office that issued the CDP Notice at the address indicated on the CDP Notice. If the address of that office is not known, the request may be sent to the District Director serving the district of the taxpayer's residence or principal place of business. If the taxpayer does not have a residence or principal place of business in the United States, the request may be sent to the Director, Philadelphia Service Center. See Reg. §301.6330-1T(c)(2)(C6).

If the taxpayer does not request a CDP hearing with Appeals within the 30-day period commencing the day after the date of the CDP Notice, the taxpayer will forego the right to a CDP hearing under IRC §6330 with respect to the tax and tax period or periods shown on the CDP Notice. In addition, the IRS will be free to pursue collection action at the conclusion of the 30-day period following the date of the CDP Notice. The taxpayer may, however, request an equivalent hearing. See Reg. §301.6330-1T(c)(2)(C7).

A CDP hearing with respect to a substitute CDP Notice must be requested in writing by the taxpayer prior to the end of the 30-day period commencing the day after the date of the substitute CDP Notice. See Reg. §301.6330-1T(c)(2)(C8).

The regulations encourage taxpayers to discuss their concerns with the IRS office collecting the tax, either before or after they request a CDP hearing. However, those discussions do not suspend the running of the 30-day period within which the taxpayer is required to request a CDP hearing, nor do they extend that 30-day period. See Reg. §301.6330-1T(c)(2)(C9).

To the extent practicable, a hearing with respect to one tax period shown on a CDP Notice will be combined with any and all other hearings to which the taxpayer may be entitled with respect to other tax periods shown on the CDP Notice. See Reg. §301.6330-1T(d)(2)(D2). To the extent it is practicable, a CDP hearing under IRC §6330 (levies) will be held in conjunction with a CDP hearing under IRC §6320 (liens). See Reg. §301.6330-1T(d)(2)(D1).

A CDP hearing will be conducted by an employee or officer of Appeals who has had no involvement with respect to the tax for the tax period or periods covered by the hearing prior to the first CDP hearing, unless the taxpayer waives that requirement. See Reg. §301.6330-1T(d)(1). Prior involvement by an employee or officer of Appeals includes participation or involvement in an Appeals hearing (other than a CDP hearing held under either IRC §6320 or IRC §6330) that the taxpayer may have had with respect to the tax and tax period shown on the CDP Notice. See Reg. §301.6330-1T(d)(2)(D4).

The taxpayer may receive more than one CDP hearing with respect to a tax period where the tax involved is a different type of tax (for example, an employment tax liability, where the original CDP hearing for the tax period involved an income tax liability), or where the same type of tax for the same period is involved, but where the amount of the tax has changed as a result of an additional assessment of tax for that period or an additional accuracy-related or filing delinquency penalty has been assessed. The taxpayer is not entitled to another CDP hearing if the additional assessment represents accruals of interest or accruals of penalties. See Reg. §301.6330-1T(d)(2)(D1).

Appeals has the authority to determine the validity, sufficiency, and timeliness of any CDP Notice given by the IRS and of any request for a CDP hearing that is made by a taxpayer. Prior to issuance of a determination, the hearing officer is required to obtain verification from the IRS office collecting the tax that the requirements of any applicable law or administrative procedure have been met. The taxpayer may raise any relevant issue relating to the unpaid tax at the hearing, including appropriate spousal defenses, challenges to the appropriateness of the proposed collection action, and offers of collection alternatives. The taxpayer also may raise challenges to the existence or amount of the tax liability for any tax period shown on the CDP Notice if the taxpayer did not receive a statutory notice of deficiency for that tax liability or did not otherwise have an opportunity to dispute that tax liability. However, the taxpayer may not raise an issue that was raised and considered at a previous CDP hearing under IRC §6320 or in any other previous administrative or judicial proceeding if the taxpayer participated meaningfully in such hearing or proceeding. Taxpayers will be expected to provide all relevant information requested by Appeals, including financial statements, for its consideration of the facts and issues involved in the hearing. See Reg. §301.6330-1T(e)(1).

A taxpayer may raise any appropriate spousal defenses at a CDP hearing. To claim a spousal defense under IRC §6015, the taxpayer must do so in writing according to rules prescribed by the IRS under IRC §6015. Spousal defenses raised under IRC §6015 in a CDP hearing are governed in all respects by the provisions of IRC §6015 and the procedures prescribed by the IRS thereunder.See Reg. §301.6330-1T(e)(2).

A taxpayer is entitled to challenge the existence or amount of the tax liability specified in the CDP Notice if the taxpayer did not receive a statutory notice of deficiency for such liability or did not otherwise have an opportunity to dispute such liability. Receipt of a statutory notice of deficiency for this purpose means receipt in time to petition the Tax Court for a redetermination of the deficiency asserted in the notice of deficiency. An opportunity to dispute a liability includes a prior opportunity for a conference with Appeals that was offered either before or after the assessment of the liability. See Reg. §301.6330-1T(e)(3)(E2).

The foregoing limitations, however, do not apply to spousal defenses because spousal defenses are governed by IRC §6015. See Reg. §301.6330-1T(e)(3)(E3). But at a CDP hearing a taxpayer may not raise a spousal defense under IRC §6015 if that defense was raised and considered in a prior judicial proceeding that has become final. See Reg. §301.6330-1T(e)(3)(E4).

Collection alternatives available to the taxpayer include, for example, a proposal to withhold the proposed or future collection action in circumstances that will facilitate the collection of the tax liability, an installment agreement, an offer-in-compromise, the posting of a bond, or the substitution of other assets. See Reg. §301.6330-1T(e)(3)(E5).

Taxpayers will be sent a dated Notice of Determination by certified or registered mail. The Notice of Determination will set forth Appeals' findings and decisions with respect to all issues considered by Appeals. See Reg. §301.6330-1T(e)(3)(E7)(i). The Notice of Determination will also set forth any agreements that Appeals reached with the taxpayer, any relief given the taxpayer, and any actions the taxpayer and/or the IRS are required to take. Lastly, the Notice of Determination will advise the taxpayer of his right to seek judicial review within 30 days of the date of the Notice of Determination. See Reg. §301.6330-1T(e)(3)(E1)(ii). There is no time limit on the CDP hearings or on when Appeals must issue a Notice of Determination. See Reg. §301.6330-1T(e)(3)(E8).

The taxpayer may appeal the CDP determination made by Appeals within 30 days after the date of the Notice of Determination to the Tax Court or a district court of the United States, as appropriate. See Reg. §301.6330-1T(f)(1). If the taxpayer seeks Tax Court review not only of Appeals' denial of relief under IRC §6015(b) or (c), but also of relief with respect to other issues raised in the CDP hearing, the taxpayer should request Tax Court review within the 30-day period commencing the day after the date of the Notice of Determination. If the taxpayer only wants Tax Court review of Appeals' denial of relief under IRC §6015(b) or (c), the taxpayer should request review by the Tax Court, as provided by IRC §6015(e), within 90 days of Appeals' determination. If a request for Tax Court review is filed after the 30-day period for seeking judicial review under IRC §6330, then only the taxpayer's IRC §6015(b) or (c) claims may be reviewable by the Tax Court. See Reg. §301.6330-1T(f)(2)(F2).

If the Tax Court would have jurisdiction over the type of tax specified in the CDP Notice (for example, income and estate taxes), then the taxpayer must Seek judicial review by the Tax Court. If the tax liability arises from a type of tax over which the Tax Court would not have jurisdiction, then the taxpayer must seek judicial review by a district court of the United States in accordance with Title 28 of the United States Code. See Reg. §301.6330-1T(f)(2)(F3).

If the court to which the taxpayer directed a timely appeal of the Notice of Determination determines that the appeal was to the incorrect court (because of jurisdictional, venue or other reasons), the taxpayer will have 30 days after the court's determination to that effect within which to file an appeal to the correct court. See Reg. §301.6330-1T(f)(2)(F4).

The regulations state that the taxpayer can only ask the court to consider an issue that was raised in the taxpayer's CDP hearing. See Reg. §301.6330-1T(f)(2)(F5). While there is a question about whether an IRS administrative regulation can define the jurisdiction of a federal court, it would be best to raise all possible issues in the Appeals CDP hearing, preferably in writing, to preserve judicial review.

The periods of limitation under IRC §6502 (relating to collection after assessment), IRC §6531 (relating to criminal prosecutions), and IRC §6532 (relating to suits) are suspended 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 by expiration of the time for seeking review or reconsideration. In no event shall any of these periods of limitation expire before the 90th day after the date on which the determination with respect to such hearing becomes final upon expiration of the time for seeking review or reconsideration. See Reg. §301.6330-1T(g)(1).

The suspension period commences on the date the IRS receives the taxpayer's written request for a CDP hearing. The suspension period continues until the IRS receives a written withdrawal by the taxpayer of the request for a CDP hearing or the determination resulting from the CDP hearing becomes final by expiration of the time for seeking its review or reconsideration. In no event shall any of these periods of limitation expire before the 90th day after the day on which there is a final determination with respect to such hearing. The periods of limitation that are suspended under IRC §6330 are those which apply to the taxes and the tax period or periods to which the CDP Notice relates. See Reg. §301.6330-1T(g)(2)(G1).

The statute of limitations is not suspended merely by issuance of the CDP notice and Notice of Intent to levy. The statute of limitations is not suspended if the taxpayer does not request a CDP hearing after receiving a CDP Notice. The statute of limitations is not suspended if the taxpayer files an untimely request for a CDP hearing. See Reg. §301.6330-1T(g)(2)(G2).

The Appeals office that makes a determination under IRC §6330 retains jurisdiction over that determination, including any subsequent administrative hearings that may be requested by the taxpayer regarding levies and any collection actions taken or proposed with respect to Appeals' determination. Once a taxpayer has exhausted his other remedies, Appeals' retained jurisdiction permits it to consider whether a change in the taxpayer's circumstances affects its original determination. Where a taxpayer alleges a change in circumstances that affects Appeals' original determination, Appeals may consider whether changed circumstances warrant a change in its earlier determination. See Reg. §301.6330-1T(h)(1). Any subsequent consideration by Appeals pursuant to its retained jurisdiction is not a continuation of the original CDP hearing and does not suspend the periods of limitation. See Reg. §301.6330-1T(h)(2)(H1). Likewise, only a determination resulting from the original CDP hearing is appealable to the Tax Court or a district court. See Reg. §301.6330-1T(h)(2)(H2).

A taxpayer who fails to make a timely request for a CDP hearing is not entitled to a CDP hearing. Such a taxpayer may nevertheless request an administrative hearing with Appeals, which is referred to as an "equivalent hearing." The equivalent hearing will be held by Appeals and will generally follow Appeals procedures for a CDP hearing. Appeals will not, however, issue a Notice of Determination. Under such circumstances, Appeals will issue a Decision Letter. See Reg. §301.6330-1T(i)(1). In an equivalent hearing, Appeals will consider the same issues that it would have considered at a CDP hearing on the same matter. See Reg. §301.6330-1T(i)(2)(I1). The periods of limitation under IRC §6502, §6531, and §6532 are not suspended with respect to an equivalent hearing. See Reg. §301.6330-1T(i)(2)(I2). Collection action is not required to be suspended. Accordingly, the decision to take collection action during the pendency of an equivalent hearing will be determined on a case-by-case basis. Appeals may request the IRS office with responsibility for collecting the taxes to suspend all or some collection action or to take other appropriate action if it determines that such action is appropriate or necessary under the circumstances. See Reg. §301.6330-1T(i)(2)(I3).

IRC §6330 does not authorize a taxpayer to appeal the decision of Appeals with respect to an equivalent hearing. A taxpayer may under certain circumstances be able to seek Tax Court review of Appeals' denial of relief under IRC §6015(b) or (c). Such review must be sought within 90 days of the issuance of Appeals' determination on those issues, as provided by IRC §6015(e). See Reg. §301.6330-1T(i)(2)(I5).

The regulations are applicable with respect to any levy which occurs on or after January 19, 1999, and before January 19, 2002.