What Is A Collection Due Process Hearing?
A collection due process (CDP) hearing gives you one last chance to avoid a federal tax lien or tax levy. You will know you have a right to request a CDP hearing because you will receive a CDP notice. This notice is sent when any of the following IRS collection actions are being taken:
- Filing of a Federal tax lien
- Bank account levy
- Jeopardy Levy
- Levy on Your State Tax Refund
The IRS should send you this notice before taking the proposed actions, but there are some situations where they can send the notice of taking action. The important thing to note is that you have 30 days from the date of the notice to request a CDP hearing.
Request A Collection Due Process Hearing
By requesting a CDP hearing, you temporarily avoid the lien or levy. The IRS will typically not initiate the levy during the CDP hearing process. This gives you time to weigh your options.
The IRS is going to continue to pursue collection unless you give them a viable alternative. It’s always better to negotiate before they levy your assets than after.
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