Archive: Collections
CDP Hearing Strategy: Timely vs. Equivalent, and Why the Choice Is Strategic
The collection due process hearing is powerful, but it pauses your statute. The equivalent hearing trades power for a running clock.
When the IRS files a lien notice or sends a final levy notice, you get collection due process rights: 30 days to request a hearing before an independent appeals officer. Most advice stops at 'always request it.' The insider version is more interesting, because the CDP request carries a price tag nobody mentions - and an alternative exists with a different deal entirely.
What a Timely CDP Buys
Request the hearing within 30 days and three things happen: the proposed levy action is barred while the hearing is pending, you get the right to propose collection alternatives and in some cases challenge the underlying liability, and an adverse determination is reviewable in Tax Court. That is real power - the only routine path from a collection dispute into a courtroom.
The price: the collection statute stops running for the entire pendency, and if fewer than 90 days remain afterward, the IRS gets at least 90. For a taxpayer with seven years left on the clock, irrelevant. For a taxpayer with 14 months left, a CDP hearing can be a strategic catastrophe that donates the IRS the time it needed.
The Equivalent Hearing Alternative
Miss the 30 days - or choose to - and you can request an equivalent hearing within a year. Same appeals officer, same ability to propose alternatives, but no levy bar, no Tax Court review, and critically, no statute suspension. The clock keeps running while you negotiate. Late in the statute, that trade is frequently brilliant: you get the conversation with Appeals while the calendar keeps eroding the debt underneath the discussion.
Choosing With Eyes Open
The decision tree is concrete. Need to stop an imminent levy or preserve court review: timely CDP, accept the toll. Statute running short and no emergency: consider the equivalent hearing and protect the clock. Liability itself disputed with no prior chance to contest: the timely hearing's court path may be worth everything. The 30-day window forces the choice fast, which is exactly why the notice should be in a lawyer's hands the week it arrives, not the week it expires. Send me yours.