If for some reason, you find yourself defaulting on a tax payment or two, the IRS will take steps to recover that debt. This could be through IRS levies, allowing them to seize your assets, taking money from your accounts or through a Notice of Federal Tax Lien (NFTL). By law, the IRS must inform you before any collection efforts are made, and after filing an NFTL.
What Is A CDP Hearing?
After the IRS makes it known to you that they intend to initiate steps to recover what you owe, you can request a hearing to discuss your case. At the hearing, you get to find out whether there were any procedural issues on the IRS’s side or propose alternative methods of collection. So, a CDP hearing is a last-ditch effort to avoid the penalties altogether or offer payment alternatives that would be easier on you. It’s important to note, though, that most CDP hearings discuss alternative collection methods. So your chances of getting away without making payments are slim.
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