[Code of Federal Regulations]
[Title 26, Volume 18]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6320-1]

[Page 219-231]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
                               Collection
 
Sec. 301.6320-1  Notice and opportunity for hearing upon filing of notice 
of Federal tax lien.

    (a) Notification--(1) In general. For a notice of Federal tax lien 
(NFTL) filed on or after January 19, 1999, the Commissioner, or his or 
her delegate (the Commissioner), will prescribe procedures to notify the 
person described in section 6321 of the filing of a NFTL not more than 
five business days after the date of any such filing. The Collection Due 
Process Hearing Notice (CDP Notice) and other notices given under 
section 6320 must be given in person, left at the dwelling or usual 
place of business of such person, or sent by certified or registered 
mail to such person's last known address, not more than five business 
days after the day the NFTL was filed. For further guidance regarding 
the definition of last known address, see Sec. 301.6212-2.
    (2) Questions and answers. The questions and answers illustrate the 
provisions of this paragraph (a) as follows:
    Q-A1. Who is the person entitled to notice under section 6320?
    A-A1. Under section 6320(a)(1), notification of the filing of a NFTL 
on or after January 19, 1999, is required to be given only to the person 
described in section 6321 who is named on the NFTL that is filed. The 
person described in section 6321 is the person liable to pay the tax due 
after notice and demand who refuses or neglects to pay the tax due 
(hereinafter, referred to as the taxpayer).
    Q-A2. When will the Internal Revenue Service (IRS) provide the 
notice required under section 6320?
    A-A2. The IRS will provide this notice within five business days 
after the filing of the NFTL.
    Q-A3. Will the IRS give notification to the taxpayer for each tax 
period listed in a NFTL filed on or after January 19, 1999?
    A-A3. Yes. A NFTL can be filed for more than one tax period. The 
notification of the filing of a NFTL will specify each unpaid tax and 
tax period listed in the NFTL.
    Q-A4. Will the IRS give notification to the taxpayer of any filing 
of a NFTL for the same tax period or periods at another place of filing?
    A-A4. Yes. The IRS will notify a taxpayer when a NFTL is filed on or 
after January 19, 1999, for a tax period or periods at any recording 
office.
    Q-A5. Will the IRS give notification to the taxpayer if a NFTL is 
filed on or after January 19, 1999, for a tax period or periods for 
which a NFTL was filed in another recording office prior to that date?
    A-A5. Yes. The IRS will notify a taxpayer when each NFTL is filed on 
or after January 19, 1999, for a tax period or periods at any recording 
office.
    Q-A6. Will the IRS give notification to the taxpayer when a NFTL is 
refiled on or after January 19, 1999?
    A-A6. No. Section 6320(a)(1) does not require the IRS to notify the 
taxpayer of the refiling of a NFTL. A taxpayer may, however, seek 
reconsideration by the IRS office that is collecting the tax or refiling 
the NFTL, an administrative hearing before the IRS Office of Appeals 
(Appeals), or assistance from the National Taxpayer Advocate.
    Q-A7. Will the IRS give notification to a known nominee of, or a 
person holding property of, the taxpayer of the filing of the NFTL?
    A-A7. No. Such person is not the person described in section 6321 
and, therefore, is not entitled to notice, but such persons have other 
remedies. See A-B5 of paragraph (b)(2) of this section.
    Q-A8. Will the IRS give notification to the taxpayer when a 
subsequent NFTL is filed for the same period or periods?
    A-A8. Yes. If the IRS files an additional NFTL with respect to the 
same tax period or periods for which an original NFTL was filed, the IRS 
will notify the taxpayer when the subsequent NFTL is filed. Not all such 
notices will, however, give rise to a right to a CDP hearing (see 
paragraph (b) of this section).
    Q-A9. How will notification under section 6320 be accomplished?
    A-A9. The IRS will notify the taxpayer by letter. Included with this 
letter will be the additional information the IRS is required to provide 
taxpayers as well as, when appropriate, a

[[Page 220]]

Form 12153, Request for a Due Process Hearing. The IRS may effect 
delivery of the letter (and accompanying materials) in one of three 
ways: by delivering the notice personally to the taxpayer; by leaving 
the notice at the taxpayer's dwelling or usual place of business; or by 
mailing the notice to the taxpayer at his last known address by 
certified or registered mail.
    Q-A10. What must a CDP Notice given under section 6320 include?
    A-A10. These notices must include, in simple and nontechnical terms:
    (i) The amount of the unpaid tax.
    (ii) A statement concerning the taxpayer's right to request a CDP 
hearing during the 30-day period that commences the day after the end of 
the five business day period within which the IRS is required to provide 
the taxpayer with notice of the filing of the NFTL.
    (iii) The administrative appeals available to the taxpayer with 
respect to the NFTL and the procedures relating to such appeals.
    (iv) The statutory provisions and the procedures relating to the 
release of liens on property.
    Q-A11. What are the consequences if the taxpayer does not receive or 
accept a CDP Notice that is properly left at the taxpayer's dwelling or 
usual place of business, or sent by certified or registered mail to the 
taxpayer's last known address?
    A-A11. A CDP Notice properly sent by certified or registered mail 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, 
commencing the day after the end of the five business day notification 
period, within which the taxpayer may request a CDP hearing. Actual 
receipt is not a prerequisite to the validity of the CDP Notice.
    Q-A12. What if the taxpayer does not receive the CDP Notice because 
the IRS did not send that notice by certified or registered mail to the 
taxpayer's last known address, or failed to leave it at the dwelling or 
usual place of business of the taxpayer, and the taxpayer fails to 
request a CDP hearing with Appeals within the 30-day period commencing 
the day after the end of the five business day notification period?
    A-A12. A NFTL becomes effective upon filing. The validity and 
priority of a NFTL is not conditioned on notification to the taxpayer 
pursuant to section 6320. Therefore, the failure to notify the taxpayer 
concerning the filing of a NFTL does not affect the validity or priority 
of the NFTL. When the IRS determines that it failed properly to provide 
a taxpayer with a CDP Notice, it will promptly provide the taxpayer with 
a substitute CDP Notice and provide the taxpayer with an opportunity to 
request a CDP hearing. Substitute CDP Notices are discussed in Q&A-B3 of 
paragraph (b)(2) and Q&A-C8 of paragraph (c)(2) of this section.
    (3) Examples. The following examples illustrate the principles of 
this paragraph (a):

    Example 1. H and W are jointly and severally liable with respect to 
a jointly filed income tax return for 1996. IRS files a NFTL with 
respect to H and W in County X on January 26, 1999. This is the first 
NFTL filed on or after January 19, 1999, for their 1996 liability. H and 
W will each be notified of the filing of the NFTL.
    Example 2. Employment taxes for 1997 are assessed against ABC 
Corporation. A NFTL is filed against ABC Corporation for the 1997 
liability in County X on June 5, 1998. A NFTL is filed against ABC 
Corporation for the 1997 liability in County Y on June 17, 1999. The IRS 
will notify the ABC Corporation with respect to the filing of the NFTL 
in County Y.
    Example 3. Federal income tax liability for 1997 is assessed against 
individual D. D buys an asset and puts it in individual E's name. A NFTL 
is filed against D in County X on June 5, 1999, for D's federal income 
tax liability for 1997. On June 17, 1999, a NFTL for the same tax 
liability is filed in County Y against E, as nominee of D. The IRS will 
notify D of the filing of the NFTL in both County X and County Y. The 
IRS will not notify E of the NFTL filed in County X. The IRS is not 
required to notify E of the NFTL filed in County Y. Although E is named 
on the NFTL filed in County Y, E is not the person described in section 
6321 (the taxpayer) who is named on the NFTL.

    (b) Entitlement to a CDP hearing--(1) In general. A taxpayer is 
entitled to one CDP hearing with respect to the first filing of a NFTL 
(on or after January 19, 1999) for a given tax period or periods with 
respect to the unpaid tax shown on the NFTL if the taxpayer timely 
requests such a hearing. The taxpayer must request such a hearing

[[Page 221]]

during the 30-day period that commences the day after the end of the 
five business day period within which the IRS is required to provide the 
taxpayer with notice of the filing of the NFTL.
    (2) Questions and answers. The questions and answers illustrate the 
provisions of this paragraph (b) as follows:
    Q-B1. Is a taxpayer entitled to a CDP hearing with respect to the 
filing of a NFTL for a type of tax and tax periods previously subject to 
a CDP Notice with respect to a NFTL filed in a different location on or 
after January 19, 1999?
    A-B1. No. Although the taxpayer will receive notice of each filing 
of a NFTL, under section 6320(b)(2), the taxpayer is entitled to only 
one CDP hearing under section 6320 for the type of tax and tax periods 
with respect to the first filing of a NFTL that occurs on or after 
January 19, 1999, with respect to that unpaid tax. Accordingly, if the 
taxpayer does not timely request a CDP hearing with respect to the first 
filing of a NFTL on or after January 19, 1999, for a given tax period or 
periods with respect to an unpaid tax, the taxpayer forgoes the right to 
a CDP hearing with Appeals and judicial review of the Appeals 
determination with respect to the NFTL. Under such circumstances, the 
taxpayer may request an equivalent hearing as described in paragraph (i) 
of this section.
    Q-B2. Is the taxpayer entitled to a CDP hearing when a NFTL for an 
unpaid tax is filed on or after January 19, 1999, in one recording 
office and a NFTL was previously filed for the same unpaid tax in 
another recording office prior to that date?
    A-B2. Yes. Under section 6320(b)(2), the taxpayer is entitled to a 
CDP hearing under section 6320 for each tax period with respect to the 
first filing of a NFTL on or after January 19, 1999, with respect to an 
unpaid tax, whether or not a NFTL was filed prior to January 19, 1999, 
for the same unpaid tax and tax period or periods.
    Q-B3. When the IRS provides the taxpayer with a substitute CDP 
Notice and the taxpayer timely requests a CDP hearing, is the taxpayer 
entitled to a CDP hearing before Appeals?
    A-B3. Yes. Unless the taxpayer provides the IRS a written withdrawal 
of the request that Appeals conduct a CDP hearing, the taxpayer is 
entitled to a CDP hearing before Appeals. Following the hearing, Appeals 
will issue a Notice of Determination, and the taxpayer is entitled to 
seek judicial review of that Notice of Determination.
    Q-B4. If the IRS sends a second CDP Notice under section 6320 (other 
than a substitute CDP Notice) for a tax period and with respect to an 
unpaid tax for which a section 6320 CDP Notice was previously sent, is 
the taxpayer entitled to a section 6320 CDP hearing based on the second 
CDP Notice?
    A-B4. No. The taxpayer is entitled to a CDP hearing under section 
6320 for each tax period only with respect to the first filing of a NFTL 
on or after January 19, 1999, with respect to an unpaid tax.
    Q-B5. Is a nominee of, or a person holding property of, the taxpayer 
entitled to a CDP hearing or an equivalent hearing?
    A-B5. No. Such person is not the person described in section 6321 
and is, therefore, not entitled to a CDP hearing or an equivalent 
hearing (as discussed in paragraph (i) of this section). Such person, 
however, may seek reconsideration by the IRS office collecting the tax 
or filing the NFTL, an administrative hearing before Appeals under its 
Collection Appeals Program, or assistance from the National Taxpayer 
Advocate. However, any such administrative hearing would not be a CDP 
hearing under section 6320 and any determination or decision resulting 
from the hearing would not be subject to judicial review under section 
6320. Such person also may avail himself of the administrative procedure 
included in section 6325(b)(4) or of any other procedures to which he is 
entitled.
    (3) Examples. The following examples illustrate the principles of 
this paragraph (b):

    Example 1. H and W are jointly and severally liable with respect to 
a jointly filed income tax return for 1996. The IRS files a NFTL with 
respect to H and W in County X on January 26, 1999. This is the first 
NFTL filed on or after January 19, 1999, for their 1996 liability. H and 
W are each entitled to a CDP hearing with respect to the NFTL filed in 
County X. On June 17, 1999, a NFTL for the same tax liability is filed 
against H and W in County Y. The IRS will give H and W

[[Page 222]]

notification of the NFTL filed in County Y. H and W, however, are not 
entitled to a CDP hearing or an equivalent hearing with respect to the 
NFTL filed in County Y.
    Example 2. Federal income tax liability for 1997 is assessed against 
individual D. D buys an asset and puts it in individual E's name. A NFTL 
is filed against E, as nominee of D in County X on June 5, 1999, for D's 
federal income tax liability for 1997. The IRS will give D a CDP Notice 
with respect to the NFTL filed in County X. The IRS will not notify E of 
the NFTL filed in County X. The IRS is not required to notify E of the 
filing of the NFTL in County X. Although E is named on the NFTL filed in 
County X, E is not the person described in section 6321 (the taxpayer) 
who is named on the NFTL.

    (c) Requesting a CDP hearing--(1) In general. When a taxpayer is 
entitled to a CDP hearing under section 6320, the CDP hearing must be 
requested during the 30-day period that commences the day after the end 
of the five business day period within which the IRS is required to 
provide the taxpayer with a CDP Notice with respect to the filing of the 
NFTL.
    (2) Questions and answers. The questions and answers illustrate the 
provisions of this paragraph (c) as follows:
    Q-C1. What must a taxpayer do to obtain a CDP hearing?
    A-C1. (i) The taxpayer must make a request in writing for a CDP 
hearing. A written request in any form, which 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. The CDP 
Notice should include, when appropriate, a Form 12153 (Request for a 
Collection Due Process Hearing) that can be used by the taxpayer to 
request a CDP hearing.
    (ii) The Form 12153 requests the following information:
    (A) The taxpayer's name, address, daytime telephone number, and 
taxpayer identification number (SSN or TIN).
    (B) The type of tax involved.
    (C) The tax period at issue.
    (D) A statement that the taxpayer requests a hearing with Appeals 
concerning the filing of the NFTL.
    (E) The reason or reasons why the taxpayer disagrees with the filing 
of the NFTL.
    (iii) Taxpayers are encouraged to use a Form 12153 in requesting a 
CDP hearing so that the request can be readily identified and forwarded 
to Appeals. Taxpayers may obtain a copy of Form 12153 by contacting the 
IRS office that issued the CDP Notice or by calling, toll free, 1-800-
829-3676.
    (iv) The taxpayer may perfect any timely written request for a CDP 
hearing which otherwise meets the requirements set forth above and which 
is made or alleged to have been made on the taxpayer's behalf by the 
taxpayer's spouse or any other representative by filing, within a 
reasonable time of a request from Appeals, a signed written affirmation 
that the request was originally submitted on the taxpayer's behalf.
    Q-C2. Must the request for the CDP hearing be in writing?
    A-C2. Yes. There are several reasons why the request for a CDP 
hearing must be in writing. The filing of a timely request for a CDP 
hearing is the first step in what may result in a court proceeding. A 
written request will provide proof that the CDP hearing was requested 
and thus permit the court to verify that it has jurisdiction over any 
subsequent appeal of the Notice of Determination issued by Appeals. In 
addition, the receipt of the written request will establish the date on 
which the periods of limitation under section 6502 (relating to 
collection after assessment), section 6531 (relating to criminal 
prosecutions), and section 6532 (relating to suits) are suspended as a 
result of the CDP hearing and any judicial appeal. Moreover, because the 
IRS anticipates that taxpayers will contact the IRS office that issued 
the CDP Notice for further information or assistance in filling out Form 
12153, or to attempt to resolve their liabilities prior to going through 
the CDP hearing process, the requirement of a written request should 
help prevent any misunderstanding as to whether a CDP hearing has been 
requested. If the information requested on Form 12153 is furnished by 
the taxpayer, the written request also will help to establish the issues 
for which the taxpayer seeks a determination by Appeals.

[[Page 223]]

    Q-C3. When must a taxpayer request a CDP hearing with respect to a 
CDP Notice issued under section 6320?
    A-C3. A taxpayer must submit a written request for a CDP hearing 
within the 30-day period that commences the day after the end of the 
five business day period following the filing of the NFTL. Any request 
filed during the five business day period (before the beginning of the 
30-day period) will be deemed to be filed on the first day of the 30-day 
period. The period for submitting a written request for a CDP hearing 
with respect to a CDP Notice issued under section 6320 is slightly 
different from the period for submitting a written request for a CDP 
hearing with respect to a CDP Notice issued under section 6330. For a 
CDP Notice issued under section 6330, the taxpayer must submit a written 
request for a CDP hearing within the 30-day period commencing the day 
after the date of the CDP Notice.
    Q-C4. How will the timeliness of a taxpayer's written request for a 
CDP hearing be determined?
    A-C4. The rules and regulations under section 7502 and section 7503 
will apply to determine the timeliness of the taxpayer's request for a 
CDP hearing, if properly transmitted and addressed as provided in A-C6 
of this paragraph (c)(2).
    Q-C5. Is the 30-day period within which a taxpayer must make a 
request for a CDP hearing extended because the taxpayer resides outside 
the United States?
    A-C5. No. Section 6320 does not make provision for such a 
circumstance. Accordingly, all taxpayers who want a CDP hearing under 
section 6320 must request such a hearing within the 30-day period that 
commences the day after the end of the five business day notification 
period.
    Q-C6. Where should the written request for a CDP hearing be sent?
    A-C6. The written request for a CDP hearing must be sent, or hand 
delivered, to the IRS office that issued the CDP Notice at the address 
indicated on the CDP Notice. If the address of that office does not 
appear on the CDP Notice, the request must be sent, or hand delivered, 
to the compliance area director, or his or her successor, serving the 
compliance area in which the taxpayer resides or has its principal place 
of business. If the taxpayer does not have a residence or principal 
place of business in the United States, the request must be sent, or 
hand delivered, to the compliance director, Philadelphia Submission 
Processing Center, or his or her successor. Taxpayers may obtain the 
address of the appropriate person to which the written request should be 
sent or hand delivered by calling, toll-free, 1-800-829-1040 and 
providing their taxpayer identification number (SSN or TIN).
    Q-C7. What will happen if the taxpayer does not request a CDP 
hearing in writing within the 30-day period that commences the day after 
the end of the five business day notification period?
    A-C7. If the taxpayer does not request a CDP hearing in writing 
within the 30-day period that commences on the day after the end of the 
five business day notification period, the taxpayer will forego the 
right to a CDP hearing under section 6320 with respect to the unpaid tax 
and tax periods shown on the CDP Notice. The taxpayer may, however, 
request an equivalent hearing. See paragraph (i) of this section.
    Q-C8. When must a taxpayer request a CDP hearing with respect to a 
substitute CDP Notice?
    A-C8. 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.
    Q-C9. Can taxpayers attempt to resolve the matter of the NFTL with 
an officer or employee of the IRS office collecting the tax or filing 
the NFTL either before or after requesting a CDP hearing?
    A-C9. Yes. Taxpayers are encouraged to discuss their concerns with 
the IRS office collecting the tax or filing the NFTL, either before or 
after they request a CDP hearing. If such a discussion occurs before a 
request is made for a CDP hearing, the matter may be resolved without 
the need for Appeals consideration. However, these discussions do not 
suspend the running of the 30-day period, commencing the day

[[Page 224]]

after the end of the five business day notification period, within which 
the taxpayer is required to request a CDP hearing, nor do they extend 
that 30-day period. If discussions occur after the request for a CDP 
hearing is filed and the taxpayer resolves the matter with the IRS 
office collecting the tax or filing the NFTL, the taxpayer may withdraw 
in writing the request that a CDP hearing be conducted by Appeals. The 
taxpayer can also waive in writing some or all of the requirements 
regarding the contents of the Notice of Determination.
    (3) Examples. The following examples illustrate the principles of 
this paragraph (c):

    Example 1. A NFTL for a 1997 income tax liability assessed against 
individual A is filed in County X on June 17, 1999. The IRS mails a CDP 
Notice to individual A's last known address on June 18, 1999. Individual 
A has until July 26, 1999, a Monday, to request a CDP hearing. The five 
business day period within which the IRS is required to notify 
individual A of the filing of the NFTL in County X expires on June 24, 
1999. The 30-day period within which individual A may request a CDP 
hearing begins on June 25, 1999. Because the 30-day period expires on 
July 24, 1999, a Saturday, individual A's written request for a CDP 
hearing will be considered timely if it is properly transmitted and 
addressed to the IRS in accordance with section 7502 and the regulations 
thereunder no later than July 26, 1999.
    Example 2. Same facts as in Example 1, except that individual A is 
on vacation, outside the United States, or otherwise does not receive or 
read the CDP Notice until July 19, 1999. As in Example 1, individual A 
has until July 26, 1999, to request a CDP hearing. If individual A does 
not request a CDP hearing, individual A may request an equivalent 
hearing as to the NFTL at a later time. The taxpayer should make a 
request for an equivalent hearing at the earliest possible time.
    Example 3. Same facts as in Example 2, except that individual A does 
not receive or read the CDP Notice until after July 26, 1999, and does 
not request a hearing by July 26, 1999. Individual A is not entitled to 
a CDP hearing. Individual A may request an equivalent hearing as to the 
NFTL at a later time. The taxpayer should make a request for an 
equivalent hearing at the earliest possible time.
    Example 4. Same facts as in Example 1, except the IRS determines 
that the CDP Notice mailed on June 18, 1999, was not mailed to 
individual A's last known address. As soon as practicable after making 
this determination, the IRS will mail a substitute CDP Notice to 
individual A at individual A's last known address, hand deliver the 
substitute CDP Notice to individual A, or leave the substitute CDP 
Notice at individual A's dwelling or usual place of business. Individual 
A will have 30 days commencing on the day after the date of the 
substitute CDP Notice within which to request a CDP hearing.

    (d) Conduct of CDP hearing--(1) In general. If a taxpayer requests a 
CDP hearing under section 6320(a)(3)(B) (and does not withdraw that 
request), the CDP hearing will be held with Appeals. The taxpayer is 
entitled under section 6320 to a CDP hearing for the unpaid tax and tax 
periods set forth in a NFTL only with respect to the first filing of a 
NFTL on or after January 19, 1999. To the extent practicable, the CDP 
hearing requested under section 6320 will be held in conjunction with 
any CDP hearing the taxpayer requests under section 6330. A CDP hearing 
will be conducted by an employee or officer of Appeals who, prior to the 
first CDP hearing under section 6320 or section 6330, has had no 
involvement with respect to the unpaid tax for the tax periods to be 
covered by the hearing, unless the taxpayer waives this requirement.
    (2) Questions and answers. The questions and answers illustrate the 
provisions of this paragraph (d) as follows:
    Q-D1. Under what circumstances can a taxpayer receive more than one 
CDP hearing under section 6320 with respect to a tax period?
    A-D1. The taxpayer may receive more than one CDP hearing under 
section 6320 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 unpaid tax has changed as a result 
of an additional assessment of tax (not including interest or penalties) 
for that period or an additional accuracy-related or filing-delinquency 
penalty has been assessed. The taxpayer is not entitled to another CDP 
hearing under section 6320 if the additional assessment represents 
accruals of interest, accruals of penalties, or both.

[[Page 225]]

    Q-D2. Will a CDP hearing with respect to one tax period be combined 
with a CDP hearing with respect to another tax period?
    A-D2. To the extent practicable, a CDP hearing with respect to one 
tax period shown on the NFTL will be combined with any and all other CDP 
hearings which the taxpayer has requested.
    Q-D3. Will a CDP hearing under section 6320 be combined with a CDP 
hearing under section 6330?
    A-D3. To the extent practicable, a CDP hearing under section 6320 
will be held in conjunction with a CDP hearing under section 6330.
    Q-D4. What is considered to be prior involvement by an employee or 
officer of Appeals with respect to the unpaid tax and tax period 
involved in the hearing?
    A-D4. 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 section 6320 or section 6330) that the 
taxpayer may have had with respect to the unpaid tax and tax periods 
shown on the NFTL.
    Q-D5. How can a taxpayer waive the requirement that the officer or 
employee of Appeals have no prior involvement with respect to the tax 
and tax periods involved in the CDP hearing?
    A-D5. The taxpayer must sign a written waiver.
    Q-D6. How are CDP hearings conducted?
    A-D6. The formal hearing procedures required under the 
Administrative Procedure Act, 5 U.S.C. 551 et seq., do not apply to CDP 
hearings. CDP hearings are much like Collection Appeal Program (CAP) 
hearings in that they are informal in nature and do not require the 
Appeals officer or employee and the taxpayer, or the taxpayer's 
representative, to hold a face-to-face meeting. A CDP hearing may, but 
is not required to, consist of a face-to-face meeting, one or more 
written or oral communications between an Appeals officer or employee 
and the taxpayer or the taxpayer's representative, or some combination 
thereof. A transcript or recording of any face-to-face meeting or 
conversation between an Appeals officer or employee and the taxpayer or 
the taxpayer's representative is not required. The taxpayer or the 
taxpayer's representative does not have the right to subpoena and 
examine witnesses at a CDP hearing.
    Q-D7. If a taxpayer wants a face-to-face CDP hearing, where will it 
be held?
    A-D7. The taxpayer must be offered an opportunity for a hearing at 
the Appeals office closest to taxpayer's residence or, in the case of 
business taxpayers, the taxpayer's principal place of business. If that 
is not satisfactory to the taxpayer, the taxpayer will be given an 
opportunity for a hearing by correspondence or by telephone. If that is 
not satisfactory to the taxpayer, the Appeals officer or employee will 
review the taxpayer's request for a CDP hearing, the case file, any 
other written communications from the taxpayer (including written 
communications, if any, submitted in connection with the CDP hearing), 
and any notes of any oral communications with the taxpayer or the 
taxpayer's representative. Under such circumstances, review of those 
documents will constitute the CDP hearing for the purposes of section 
6320(b).
    (e) Matters considered at CDP hearing--(1) In general. 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 the issuance of a determination, 
the hearing officer is required to obtain verification from the IRS 
office collecting the tax or filing the NFTL 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 NFTL filing, and offers of collection 
alternatives. The taxpayer also may raise challenges to the existence or 
amount of the tax liability specified on the CDP Notice for any tax 
period shown on the CDP Notice if the taxpayer did not receive a 
statutory notice of deficiency for that tax liability

[[Page 226]]

or did not otherwise have an opportunity to dispute that tax liability. 
Finally, the taxpayer may not raise an issue that was raised and 
considered at a previous CDP hearing under section 6330 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.
    (2) Spousal defenses. A taxpayer may raise any appropriate spousal 
defenses at a CDP hearing unless the Commissioner has already made a 
final determination as to spousal defenses in a statutory notice of 
deficiency or final determination letter. To claim a spousal defense 
under section 66 or section 6015, the taxpayer must do so in writing 
according to rules prescribed by the Commissioner or the Secretary. 
Spousal defenses raised under sections 66 and 6015 in a CDP hearing are 
governed in all respects by the provisions of sections 66 and section 
6015 and the regulations and procedures thereunder.
    (3) Questions and answers. The questions and answers illustrate the 
provisions of this paragraph (e) as follows:
    Q-E1. What factors will Appeals consider in making its 
determination?
    A-E1. Appeals will consider the following matters in making its 
determination:
    (i) Whether the IRS met the requirements of any applicable law or 
administrative procedure.
    (ii) Any issues appropriately raised by the taxpayer relating to the 
unpaid tax.
    (iii) Any appropriate spousal defenses raised by the taxpayer.
    (iv) Any challenges made by the taxpayer to the appropriateness of 
the NFTL filing.
    (v) Any offers by the taxpayer for collection alternatives.
    (vi) Whether the continued existence of the filed NFTL represents a 
balance between the need for the efficient collection of taxes and the 
legitimate concern of the taxpayer that any collection action be no more 
intrusive than necessary.
    Q-E2. When is a taxpayer entitled to challenge the existence or 
amount of the tax liability specified in the CDP Notice?
    A-E2. 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.
    Q-E3. Are spousal defenses subject to the limitations imposed under 
section 6330(c)(2)(B) on a taxpayer's right to challenge the tax 
liability specified in the CDP Notice at a CDP hearing?
    A-E3. The limitations imposed under section 6330(c)(2)(B) do not 
apply to spousal defenses. When a taxpayer asserts a spousal defense, 
the taxpayer is not disputing the amount or existence of the liability 
itself, but asserting a defense to the liability which may or may not be 
disputed. A spousal defense raised under section 66 or section 6015 is 
governed by section 66 or section 6015 and the regulations and 
procedures thereunder. Any limitation under those sections, regulations, 
and procedures therefore will apply.
    Q-E4. May a taxpayer raise at a CDP hearing a spousal defense under 
section 66 or section 6015 if that defense was raised and considered 
administratively and the Commissioner has issued a statutory notice of 
deficiency or final determination letter addressing the spousal defense?
    A-E4. No. A taxpayer is precluded from raising a spousal defense at 
a CDP hearing when the Commissioner has made a final determination under 
section 66 or section 6015 in a final determination letter or statutory 
notice of deficiency. However, a taxpayer may raise spousal defenses in 
a CDP hearing when the taxpayer has previously

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raised spousal defenses, but the Commissioner has not yet made a final 
determination regarding this issue.
    Q-E5. May a taxpayer raise at a CDP hearing a spousal defense under 
section 66 or section 6015 if that defense was raised and considered in 
a prior judicial proceeding that has become final?
    A-E5. No. A taxpayer is precluded by the doctrine of res judicata 
and by the specific limitations under section 66 or section 6015 from 
raising a spousal defense in a CDP hearing under these circumstances.
    Q-E6. What collection alternatives are available to the taxpayer?
    A-E6. Collection alternatives would include, for example, a proposal 
to withdraw the NFTL 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.
    Q-E7. What issues may a taxpayer raise in a CDP hearing under 
section 6320 if the taxpayer previously received a notice under section 
6330 with respect to the same tax and tax period and did not request a 
CDP hearing with respect to that notice?
    A-E7. The taxpayer may raise appropriate spousal defenses, 
challenges to the appropriateness of the NFTL filing, and offers of 
collection alternatives. The existence or amount of the tax liability 
for the tax and tax period specified in the CDP Notice may be challenged 
only if the taxpayer did not already have an opportunity to dispute that 
tax liability. Where the taxpayer previously received a CDP Notice under 
section 6330 with respect to the same tax and tax period and did not 
request a CDP hearing with respect to that earlier CDP Notice, the 
taxpayer already had an opportunity to dispute the existence or amount 
of the underlying tax liability.
    Q-E8. How will Appeals issue its determination?
    A-E8. (i) 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. It will state whether the IRS met the 
requirements of any applicable law or administrative procedure; it will 
resolve any issues appropriately raised by the taxpayer relating to the 
unpaid tax; it will include a decision on any appropriate spousal 
defenses raised by the taxpayer; it will include a decision on any 
challenges made by the taxpayer to the appropriateness of the NFTL 
filing; it will respond to any offers by the taxpayer for collection 
alternatives; and it will address whether the continued existence of the 
filed NFTL represents a balance between the need for the efficient 
collection of taxes and the legitimate concern of the taxpayer that any 
collection action be no more intrusive than necessary. 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 or the IRS are required to take. Lastly, the Notice of 
Determination will advise the taxpayer of the taxpayer's right to seek 
judicial review within 30 days of the date of the Notice of 
Determination.
    (ii) Because taxpayers are encouraged to discuss their concerns with 
the IRS office collecting the tax or filing the NFTL, certain matters 
that might have been raised at a CDP hearing may be resolved without the 
need for Appeals consideration. Unless, as a result of these 
discussions, the taxpayer agrees in writing to withdraw the request that 
Appeals conduct a CDP hearing, Appeals will still issue a Notice of 
Determination. The taxpayer can, however, waive in writing Appeals' 
consideration of some or all of the matters it would otherwise consider 
in making its determination.
    Q-E9. Is there a period of time within which Appeals must conduct a 
CDP hearing or issue a Notice of Determination?
    A-E9. No. Appeals will, however, attempt to conduct a CDP hearing 
and issue a Notice of Determination as expeditiously as possible under 
the circumstances.
    Q-E10. Why is the Notice of Determination and its date important?
    A-E10. The Notice of Determination will set forth Appeals' findings 
and decisions with respect to the matters set forth in A-E1 of this 
paragraph (e)(3). The 30-day period within which the taxpayer is 
permitted to seek judicial

[[Page 228]]

review of Appeals' determination commences the day after the date of the 
Notice of Determination.
    Q-E11. If an Appeals officer considers the merits of a taxpayer's 
liability in a CDP hearing when the taxpayer had previously received a 
statutory notice of deficiency or otherwise had an opportunity to 
dispute the liability prior to the NFTL, will the Appeals officer's 
determination regarding those liability issues be considered part of the 
Notice of Determination?
    A-E11. No. An Appeals officer may consider the existence and amount 
of the underlying tax liability as a part of the CDP hearing only if the 
taxpayer did not receive a statutory notice of deficiency for the tax 
liability in question or otherwise have a prior opportunity to dispute 
the tax liability. Similarly, an Appeals officer may not consider any 
other issue if the issue was raised and considered at a previous hearing 
under section 6330 or in any other previous administrative or judicial 
proceeding in which the person seeking to raise the issue meaningfully 
participated. In the Appeals officer's sole discretion, however, the 
Appeals officer may consider the existence or amount of the underlying 
tax liability, or such other precluded issues, at the same time as the 
CDP hearing. Any determination, however, made by the Appeals officer 
with respect to such a precluded issue shall not be treated as part of 
the Notice of Determination issued by the Appeals officer and will not 
be subject to any judicial review. Because any decisions made by the 
Appeals officer with respect to such precluded issues are not properly a 
part of the CDP hearing, such decisions are not required to appear in 
the Notice of Determination issued following the hearing. Even if a 
decision concerning such precluded issues is referred to in the Notice 
of Determination, it is not reviewable by a district court or the Tax 
Court because the precluded issue is not properly part of the CDP 
hearing.
    (4) Examples. The following examples illustrate the principles of 
this paragraph (e):

    Example 1. The IRS sends a statutory notice of deficiency to the 
taxpayer at his last known address asserting a deficiency for the tax 
year 1995. The taxpayer receives the notice of deficiency in time to 
petition the Tax Court for a redetermination of the asserted deficiency. 
The taxpayer does not timely file a petition with the Tax Court. The 
taxpayer is precluded from challenging the existence or amount of the 
tax liability in a subsequent CDP hearing.
    Example 2. Same facts as in Example 1, except the taxpayer does not 
receive the notice of deficiency in time to petition the Tax Court and 
did not have another prior opportunity to dispute the tax liability. The 
taxpayer is not precluded from challenging the existence or amount of 
the tax liability in a subsequent CDP hearing.
    Example 3. The IRS properly assesses a trust fund recovery penalty 
against the taxpayer. The IRS offers the taxpayer the opportunity for a 
conference with Appeals at which the taxpayer would have the opportunity 
to dispute the assessed liability. The taxpayer declines the opportunity 
to participate in such a conference. The taxpayer is precluded from 
challenging the existence or amount of the tax liability in a subsequent 
CDP hearing.

    (f) Judicial review of Notice of Determination--(1) In general. 
Unless the taxpayer provides the IRS a written withdrawal of the request 
that Appeals conduct a CDP hearing, Appeals is required to issue a 
Notice of Determination in all cases where a taxpayer has timely 
requested a CDP hearing. The taxpayer may appeal such determinations 
made by Appeals within the 30-day period commencing the day after the 
date of the Notice of Determination to the Tax Court or a district court 
of the United States, as appropriate.
    (2) Questions and answers. The questions and answers illustrate the 
provisions of this paragraph (f) as follows:
    Q-F1. What must a taxpayer do to obtain judicial review of a Notice 
of Determination?
    A-F1. Subject to the jurisdictional limitations described in A-F2, 
the taxpayer must, within the 30-day period commencing the day after the 
date of the Notice of Determination, appeal the determination by Appeals 
to the Tax Court or to a district court of the United States.
    Q-F2. With respect to the relief available to the taxpayer under 
section 6015, what is the time frame within which a taxpayer may seek 
Tax Court review of Appeals' determination following a CDP hearing?

[[Page 229]]

    A-F2. If the taxpayer seeks Tax Court review not only of Appeals' 
denial of relief under section 6015, but also of relief requested 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 
seeks Tax Court review of Appeals' denial of relief under section 6015, 
then the taxpayer should request Tax Court review, as provided by 
section 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 section 6320, then only the taxpayer's section 
6015 claims may be reviewable by the Tax Court.
    Q-F3. Where should a taxpayer direct a request for judicial review 
of a Notice of Determination?
    A-F3. 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.
    Q-F4. What happens if the taxpayer timely appeals Appeals' 
determination to the incorrect court?
    A-F4. 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.
    Q-F5. What issue or issues may the taxpayer raise before the Tax 
Court or before a district court if the taxpayer disagrees with the 
Notice of Determination?
    A-F5. In seeking Tax Court or district court review of Appeals' 
Notice of Determination, the taxpayer can only request that the court 
consider an issue that was raised in the taxpayer's CDP hearing.
    (g) Effect of request for CDP hearing and judicial review on periods 
of limitation and collection activity--(1) In general. The periods of 
limitation under section 6502 (relating to collection after assessment), 
section 6531 (relating to criminal prosecutions), and section 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 judicial review or the 
exhaustion of any rights to appeals following judicial review. In no 
event shall any of these periods of limitation expire before the 90th 
day after the date on which the IRS receives the taxpayer's written 
withdrawal of the request that Appeals conduct a CDP hearing or the 
determination with respect to such hearing becomes final upon either the 
expiration of the time for seeking judicial review or upon exhaustion of 
any rights to appeals following judicial review.
    (2) Questions and answers. The questions and answers illustrate the 
provisions of this paragraph (g) as follows:
    Q-G1. For what period of time will the periods of limitation under 
sections 6502, 6531, and 6532 remain suspended if the taxpayer timely 
requests a CDP hearing concerning the filing of a NFTL?
    A-G1. 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 Notice of Determination resulting 
from the CDP hearing becomes final. In no event shall any of these 
periods of limitation expire before the 90th day after the day on which 
the IRS receives the taxpayer's written withdrawal of the request that 
Appeals conduct a CDP hearing or there is a final determination with 
respect to such hearing. The periods of limitation that are suspended 
under section 6320 are those which apply to the taxes and the tax period 
or periods to which the CDP Notice relates.
    Q-G2. For what period of time will the periods of limitation under 
sections

[[Page 230]]

6502, 6531, and 6532 be suspended if the taxpayer does not request a CDP 
hearing concerning the filing of a NFTL, or the taxpayer requests a CDP 
hearing, but his request is not timely?
    A-G2. Under either of these circumstances, section 6320 does not 
provide for a suspension of the periods of limitation.
    Q-G3. What, if any, enforcement actions can the IRS take during the 
suspension period?
    A-G3. Section 6330(e), made applicable to section 6320 CDP hearings 
by section 6320(c), provides for the suspension of the periods of 
limitation discussed in paragraph (g)(1) of these regulations. Section 
6330(e) also provides that levy actions that are the subject of the 
requested CDP hearing under that section shall be suspended during the 
same period. Levy actions, however, are not the subject of a CDP hearing 
under section 6320. The IRS may levy for tax periods and taxes covered 
by the CDP Notice under section 6320 and for other taxes and periods if 
the CDP requirements under section 6330 for those taxes and periods have 
been satisfied. The IRS also may file NFTLs for tax periods or taxes not 
covered by the CDP Notice, may file a NFTL for the same tax and tax 
period stated on the CDP Notice at another recording office, and may 
take other non-levy collection actions such as initiating judicial 
proceedings to collect the tax shown on the CDP Notice or offsetting 
overpayments from other periods, or of other taxes, against the tax 
shown on the CDP Notice. Moreover, the provisions in section 6330 do not 
apply when the IRS levies for the tax and tax period shown on the CDP 
Notice to collect a state tax refund due the taxpayer, or determines 
that collection of the tax is in jeopardy. Finally, section 6330 does 
not prohibit the IRS from accepting any voluntary payments made for the 
tax and tax period stated on the CDP Notice.
    (3) Examples. The following examples illustrate the principles of 
this paragraph (g):

    Example 1. The period of limitation under section 6502 with respect 
to the taxpayer's tax period listed in the NFTL will expire on August 1, 
1999. The IRS sent a CDP Notice to the taxpayer on April 30, 1999. The 
taxpayer timely requested a CDP hearing. The IRS received this request 
on May 15, 1999. Appeals sends the taxpayer its determination on June 
15, 1999. The taxpayer timely seeks judicial review of that 
determination. The period of limitation under section 6502 would be 
suspended from May 15, 1999, until the determination resulting from that 
hearing becomes final by expiration of the time for seeking review or 
reconsideration before the appropriate court, plus 90 days.
    Example 2. Same facts as in Example 1, except the taxpayer does not 
seek judicial review of Appeals' determination. Because the taxpayer 
requested the CDP hearing when fewer than 90 days remained on the period 
of limitation, the period of limitation will be extended to October 13, 
1999 (90 days from July 15, 1999).

    (h) Retained jurisdiction of Appeals--(1) In general. The Appeals 
office that makes a determination under section 6320 retains 
jurisdiction over that determination, including any subsequent 
administrative hearings that may be requested by the taxpayer regarding 
the NFTL 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.
    (2) Questions and answers. The questions and answers illustrate the 
provisions of this paragraph (h) as follows:
    Q-H1. Are the periods of limitation suspended during the course of 
any subsequent Appeals consideration of the matters raised by a taxpayer 
when the taxpayer invokes the retained jurisdiction of Appeals under 
section 6330(d)(2)(A) or (d)(2)(B)?
    A-H1. No. Under section 6320(b)(2), a taxpayer is entitled to only 
one CDP hearing under section 6320 with respect to the tax and tax 
period or periods specified in the CDP Notice. 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.

[[Page 231]]

    Q-H2. Is a decision of Appeals resulting from a retained 
jurisdiction hearing appealable to the Tax Court or a district court?
    A-H2. No. As discussed in A-H1, a taxpayer is entitled to only one 
CDP hearing under section 6320 with respect to the tax and tax period or 
periods specified in the CDP Notice. Only determinations resulting from 
CDP hearings are appealable to the Tax Court or a district court.
    (i) Equivalent hearing--(1) In general. 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 herein as an ``equivalent hearing.'' The 
equivalent hearing will be held by Appeals and generally will 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.
    (2) Questions and answers. The questions and answers illustrate the 
provisions of this paragraph (i) as follows:
    Q-I1. What issues will Appeals consider at an equivalent hearing?
    A-I1. In an equivalent hearing, Appeals will consider the same 
issues that it would have considered at a CDP hearing on the same 
matter.
    Q-I2. Are the periods of limitation under sections 6502, 6531, and 
6532 suspended if the taxpayer does not timely request a CDP hearing and 
is subsequently given an equivalent hearing?
    A-I2. No. The suspension period provided for in section 6330(e) 
relates only to hearings requested within the 30-day period that 
commences on the day after the end of the five business day period 
following the filing of the NFTL, that is, CDP hearings.
    Q-I3. Will collection action, including the filing of additional 
NFTLs, be suspended if a taxpayer requests and receives an equivalent 
hearing?
    A-I3. 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.
    Q-I4. What will the Decision Letter state?
    A-I4. The Decision Letter will generally contain the same 
information as a Notice of Determination.
    Q-I5. Will a taxpayer be able to obtain court review of a decision 
made by Appeals with respect to an equivalent hearing?
    A-I5. Section 6320 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 section 6015. Such review must be sought 
within 90 days of the issuance of Appeals' determination on those 
issues, as provided by section 6015(e).
    (j) Effective date. This section is applicable with respect to any 
filing of a NFTL on or after January 19, 1999.

[T.D. 8979, 67 FR 2561, Jan. 18, 2002]