If you received an IRS lien or levy notice and requested a Collection Due Process hearing, the next question is often what to say — and how to say it in a way that preserves your options. A CDP case can be one of the few moments in the IRS collection process when a taxpayer may be able to raise both collection alternatives and, in limited situations, liability arguments before the IRS Independent Office of Appeals. Under 26 U.S.C. § 6330, Appeals considers whether legal and administrative requirements were met, whether the proposed collection action is appropriate, and whether an alternative resolution makes more sense in light of the taxpayer’s circumstances.
In this post you’ll learn how collection alternatives and liability issues fit into a CDP case, when each argument is available, what evidence often matters, and where taxpayers sometimes lose review rights by framing the case too narrowly or too late. If you want a broader overview first, it may help to start with this guide to how CDP hearing rights, levy defenses, and payment alternatives work together.
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A timely CDP request can pause levy action while the hearing is pending in many levy cases, and a timely request also generally preserves the right to seek Tax Court review after Appeals issues its determination, according to the IRS’s current CDP guidance and Publication 594. By contrast, an equivalent hearing may still allow review inside Appeals, but it generally does not carry the same path to court review if the taxpayer disagrees with the outcome, as explained in Publication 594.
That procedural difference is a big reason CDP cases often turn on strategy as much as substance. A taxpayer may be trying to stop a levy, protect wages or bank funds, negotiate time to pay, seek currently not collectible status, challenge whether a lien filing should remain in place, or dispute whether the underlying tax is even correct. Each objective calls for a different presentation, different supporting documents, and sometimes a different legal theory.
The statute gives Appeals a fairly specific checklist. Under 26 U.S.C. § 6330(c), the hearing officer considers:
That last limitation is where many CDP cases become more technical. In general terms, a taxpayer does not get a second full shot at liability inside CDP if there was already a prior chance to contest the tax. Treasury regulations state that a prior opportunity can include a prior conference opportunity with Appeals in some circumstances, as reflected in 26 C.F.R. § 301.6320-1.
One of the most common problems in CDP practice is blending two very different arguments:
Those ideas can appear in the same case, but they are not interchangeable. Appeals may consider both only if each is properly available and supported. The IRS describes a CDP hearing as an opportunity to discuss alternatives to enforced collection and, in limited situations, to dispute the amount owed if there was no prior opportunity to do so, according to the IRS’s CDP FAQs.