Collection Appeal Program (CAP) and Collection Due Process (CDP)
Assuming we have not been able to get involved before the case goes to collections, we start on a different path. There are very specific things the IRS must do, in order, on the correct time line, and document to be able to make collections against a taxpayer.
Again, assuming we are brought on board before time lines expire, the CAP is our first avenue of protest at this point. The CAP can be requested via Form 9423 before or after the filing of a NFTL, levy, or seizure, or upon rejection or termination of an installment agreement.
Once Appeals makes a decision regarding your case on a CAP hearing, that decision is binding on both you and the IRS. You do not have the right to Judicial Review of the CAP decision.
Another option in the representative’s toolbox is the CDP Hearing request. Unlike the CAP, the reasons for requesting a CDP Hearing are more limited. They have strictly to do with Liens and Levies.
Timing is a critical factor in this process. Timely filing of the request preserves the taxpayers rights to Judicial Review of the decision made by the Appeals Division. Normally, the Judicial Review of a CDP Hearing will be an Administrative review. This means that the Administrative Law Judge will review the entire case file and make a decision. There is no “trial” phase of this process.
If you, as a representative, are not brought in until after the time lines are blown, you may still file a request for a hearing but it will be an Equivalent Hearing (EH) and the right of Judicial Review is not available.
Timing for the filing of a CDP hearing request are as follows:
1. Postmarked by no later then the date indicated on the NTFL letter or
2. Postmarked within 30 days of the date after the date on the Final Notice of Intent to Levy letter or Notice of Your Right to a Hearing After an Actual levy letter
3. If the time for filing has expired you may file for an EH within one year plus five business days from the NFTL or
4. For a Levy or Final Notice of Levy one year from the date on the notice.
Because a CDP hearing not only tolls the statute, it also stops lien or levy action, in most cases,
Assuming your CDP hearing request was filed in a timely manner and you are unhappy with the Appeals Officers decision, you then fall under the Tax Court Petition standards which we discussed earlier.
Next: Last but not least: Other Options for Your Client