The Truth About Collection Due Process (CDP)

The Collection Due Process (CDP) appeal is your opportunity to seek an independent review of your tax assessment to be sure that the Internal Revenue Service (IRS) has not made a mistake. The CDP appeal is used to appeal any enforcement actions, such as federal tax liens, property seizures, liens or wage garnishments that are made against you. 

A CDP appeal stops the government from taking action against you. As experts in the field, we at Christopher G Carmona CPA, APC want you to understand what really happens during a CDP. This is why we have written down information regarding the truth about Collection Due Process (CDP) so that you can rightfully take advantage of this service. 

If the taxpayers have a CDP (Collection Due Process) hearing, they are able to raise the underlying liability. However, they must do it at the first opportunity. What this means is that the taxpayer must raise the issue of the liability when they are allowed their first CDP hearing, whether that notice is for the threat to levy or the filing of the NFTL (Notice of Federal Tax Liens). 

The taxpayers can raise the issue when they file Form 12153 by checking “Other” at the bottom of Box 8 and writing in the explanation that they don’t believe they owe the money the IRS believes they do. When the taxpayers hear back from Appeals, they should submit their documentation to the Settlement Officer for consideration and attempt to reduce the liability. At your hearing, you can address many different issues that you may have. 

For example, if you felt that you paid all taxes that were owed or you could not pay your taxes because of having no income or being terminally ill, then the judge at the hearing needs to know those facts about your case. It’s a good idea to talk to a professional before you decide to move forward with a CDP appeal. The tax process can be complex, so having someone with you who understands the law may be helpful to you. 

If you are looking for a CPA firm in Diamond Bar, CA, reach out to the experts at Christopher G Carmona CPA, APC. If you’ve received an IRS letter, or other tax correspondence from the IRS, a state agency, or a local agency, it can be difficult to know what to do next. We represent clients who owe IRS penalties, interest, and taxes. We offer our services across Diamond Bar, Los Angeles, Oceanside, Orange County, Riverside County, San Diego County, and the surrounding areas. For a complete list of our services, please click here. If you have any questions about filing taxes and accounting, we’d love to hear from you. Please contact us here.