The Collection Due Process Hearing: IRC §6330, the Goza Framework, and Tax Court Review

The Collection Due Process hearing framework was created by Section 3401 of the IRS Restructuring and Reform Act of 1998, Pub. L. No. 105-206, 112 Stat. 685 (1998) — known as RRA 1998. The legislation responded to congressional hearings in 1997 and 1998 documenting IRS taxpayer-rights abuses in collection enforcement. Congress enacted Section 3401 to ensure taxpayers received notice and a meaningful hearing before the IRS could levy on property or file a Notice of Federal Tax Lien.

The CDP provisions are codified at two parallel sections: IRC §6320 governs CDP rights upon NFTL filing; IRC §6330 governs CDP rights before levy. The provisions became effective for collection actions taken after January 18, 1999.

The legislative history at H.R. Rep. No. 105-599 (Conf. Rep.), at 263-267 (1998), articulates the statutory purpose: to "afford taxpayers adequate notice of collection activity and a meaningful hearing before the IRS deprives them of their property." Implementing regulations were promulgated by Treasury Decisions 8979 and 8980 on January 17, 2002, codified at Treas. Reg. §301.6320-1 and Treas. Reg. §301.6330-1. Significant amendments were promulgated on November 16, 2006.

IRC §6331(d) requires the IRS to provide written notice at least 30 days before any levy action (subject to narrow exceptions for jeopardy assessments, state refund offsets, and disqualified employment tax levies). This 30-day pre-levy notice is statutorily required regardless of CDP rights — even where no CDP hearing right exists, the IRS must still provide §6331(d) notice before levy.

When the IRS issues a §6331(d) notice that also carries CDP rights under §6330, it does so by means of Letter 1058 (Field Collection cases assigned to a Revenue Officer) or LT11 (culminating notice in the Automated Collection System sequence). Both notices are titled "Final Notice of Intent to Levy and Notice of Your Right to a Hearing" and are legally identical CDP-eligible notices.

IRC §6330(a)(2) specifies that the notice must be given: (A) in person; (B) left at the taxpayer's dwelling or usual place of business; or (C) sent by certified or registered mail to the taxpayer's last known address. Per IRC §6330(a)(3)(B), the 30-day window runs from the date the CDP notice is sent (mailing date for mailed notices) — not from the date of receipt.

A CDP hearing is requested by filing Form 12153 (Request for a Collection Due Process or Equivalent Hearing) with the IRS office that issued the CDP notice — typically the address printed on Letter 1058 or LT11 itself. Filing with the wrong IRS office can result in the request being deemed untimely. Treas. Reg. §301.6330-1(c)(2), Q&A-C1 sets out the content requirements: the request must be in writing, signed, identify the taxpayer, identify the tax periods at issue, state the basis for the request, and propose specific collection alternatives or state the basis for any underlying-liability challenge.

If the request is untimely (filed after 30 days but within one year), it is automatically treated as a request for an Equivalent Hearing under Treas. Reg. §301.6330-1(i)(2). The taxpayer may use Form 12253 (Withdrawal of Request) to withdraw a previously-filed request before the SO issues a determination.

The collection suspension is automatic upon timely filing — no separate request, motion, or determination is required. From the moment the timely Form 12153 is postmarked through the conclusion of the CDP hearing and any Tax Court review, the IRS may not proceed with the proposed levy.

The interaction between CDP suspension and CSED tolling is procedurally important. IRM 25.6.1.7 confirms: the CSED is tolled from the date of the timely CDP request through the date of the Notice of Determination, plus the 90 days available to petition the Tax Court, plus any time during which a Tax Court petition is pending. This tolling can extend the CSED by 6-18 months in typical cases.

The most consequential limitation on CDP hearing scope is IRC §6330(c)(2)(B), which permits a taxpayer to "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."

Subsequent decisions refining the doctrine:

For the majority of CDP cases — those where the underlying liability is not contestable — the hearing focuses on collection alternatives proposed by the taxpayer under IRC §6330(c)(2)(A).

The CDP hearing concludes with the Settlement Officer's issuance of a Notice of Determination under IRC §6330(c)(3). The Notice must address: (A) whether the IRS met all statutory and procedural requirements; (B) the issues raised by the taxpayer; and (C) the balance between efficient tax collection and the concern that any collection action be no more intrusive than necessary.

Under IRC §6330(d)(1), the taxpayer has 30 days from the date of the Notice of Determination to petition the United States Tax Court for review. The 30-day period for filing a Tax Court petition is jurisdictional and absolute — late filings will be dismissed for lack of jurisdiction. The petition may be filed electronically through DAWSON (the Tax Court's electronic filing system) or by mail under IRC §7502 timely-mailing rules.

Reversals under the abuse-of-discretion standard occur where: (1) the SO failed to consider an issue properly raised; (2) the SO based the determination on facts not in the administrative record; (3) the SO applied an incorrect legal standard; or (4) the SO's determination is contrary to controlling Tax Court precedent. Vinatieri v. Commissioner, 133 T.C. 392 (2009), is the canonical reversal example — the SO had refused to release a hardship levy citing unfiled returns; the Tax Court held this was abuse of discretion because §6343(a)(1)(D) does not condition hardship release on filing compliance.

If the 30-day CDP window is missed, the taxpayer may request an Equivalent Hearing under Treas. Reg. §301.6330-1(i)(2) within one year of the CDP notice date. The EH is conducted by Appeals using the same procedural framework as a CDP hearing — same Settlement Officer pool, same consideration of collection alternatives.

Practitioners pursuing Equivalent Hearing should combine the request with: (a) express request to Collection that levy action be held pending the EH outcome; (b) Form 911 to TAS invoking IRC §7811 if any immediate levy threat exists; (c) express §6343 release request if an active levy is in place.

IRC §6320 is the lien-CDP parallel to IRC §6330. When the IRS files a Notice of Federal Tax Lien (NFTL) under IRC §6321 and §6323, it must provide written notice within 5 business days under IRC §6320(a)(2). The notice is Letter 3172 (Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC §6320). The taxpayer has 30 days from the date of Letter 3172 to file Form 12153.

The IRC §6320 CDP framework parallels §6330 with respect to hearing procedure, issues available, Settlement Officer evaluation, Notice of Determination, and Tax Court review. Lien-CDP hearings often focus on lien-specific remedies: lien withdrawal under IRC §6323(j) (where withdrawal will facilitate collection or is in the IRS's best interest), lien subordination under IRC §6325(d), lien discharge under IRC §6325(b), or DDIA lien withdrawal under IRM 5.12.9.5. Where both a levy CDP and lien CDP arise concurrently, Treas. Reg. §301.6330-1(b)(2) allows the IRS to consolidate them into a single hearing.