CDP Hearing or CAP Appeal? | Kathryn Meyer Law PC

Use Collection Due Process (CDP) when you hold one of the specific lien or levy notices that grant it and you are still inside its 30-day window: it stops levies, pauses the collection clock and leads to Tax Court review. Use the Collection Appeals Program (CAP) for the many actions CDP does not cover, such as a rejected or terminated installment agreement, a levy or seizure without CDP rights, or a missed CDP deadline: it is usually faster, but its decision is final and cannot be taken to court.

Both routes send your case to the IRS Independent Office of Appeals, and in some cases you will use both at different times. They sit alongside the other collection protections described on Kathryn Meyer's page on IRS collections and enforcement.

How do the two routes compare?

	Collection Due Process	Collection Appeals Program
Legal basis	IRC 6320 (liens) and 6330 (levies)	IRS administrative procedure (Publication 1660)
What it covers	The first lien filing notice and the first levy notice for each tax and period, plus a few post-levy notices	Lien filings at any time, levies, seizures, installment agreement rejections, modifications and terminations, wrongful levies, denied lien withdrawals, discharges and subordinations
Deadline	30 days; the lien notice states the last date, and a levy request must be postmarked within 30 days of the notice date	Short, action-specific windows: days, not weeks, after a manager conference; 30 days for installment agreements
Form	Form 12153	Form 9423, or a phone request in some cases
Can you dispute the tax owed?	Only if you had no earlier opportunity	No
Levy during the appeal	Prohibited for those periods, with limited exceptions	Normally no collection on the periods under appeal, unless collection is at risk
Collection clock	Suspended while the hearing and any appeals are pending	Suspended during an appeal of a rejected or terminated installment agreement; other CAP appeals are not among the events the IRS lists as pausing it
Court review	U.S. Tax Court, within 30 days of the determination	None; the decision binds you and the IRS
Speed	Formal hearing	Generally quicker

Publication 1660 puts the trade-off in one line: CAP "generally results in a quicker Appeals decision and is available for a broader range of collection actions," but you "cannot go to court if you disagree with the CAP decision."

How each route works, step by step

Collection Due Process

You receive a Notice of Federal Tax Lien Filing and Your Right to a Hearing, or a Final Notice of Intent to Levy and Notice of Your Right to a Hearing (or one of the post-levy notices Publication 1660 lists).
You send Form 12153 to the address on the notice within the deadline, listing every tax and period and the alternative you want.
Appeals holds the hearing, by phone, correspondence or in person if you qualify, and issues a determination letter.
If you disagree, you may petition the Tax Court within 30 days of the determination (IRC 6330(d)(1)).

The deadlines and what a timely request protects are covered in detail in what a Collection Due Process hearing is and when to ask for one. What the court does with the determination is explained in how the Tax Court reviews a Collection Due Process decision.

Collection Appeals Program

If your only contact has been a notice or phone call, call the number on the notice, explain which action you disagree with and why, and offer a solution. The employee must refer you to a manager, who will speak with you then or return your call within 24 hours. If you do not agree with the manager, the case goes to Appeals; a written request is not required.
If a revenue officer is handling your case, you must first ask for a conference with the collection manager. If that does not resolve it, tell the revenue officer or manager within 2 business days after the conference that you will appeal, and send Form 9423 so it is postmarked within 3 business days after the conference. If no manager contacts you within 2 business days of your request, Form 9423 should be received or postmarked within 4 business days of the request.
After a seizure, you must appeal to the collection manager within 10 business days after the notice of seizure is given to you or left at your home or business.
For an installment agreement that is rejected, appeal on or before the 30th day after the date of the rejection letter. For a proposed termination, you have 30 days from the notice of intent to terminate, and your right to appeal continues for 30 more days after a termination takes effect.

Form 9423 asks you to check each collection action you are appealing, list the tax periods, and explain why you disagree, and Publication 1660 adds that you must also offer a solution.

Which actions can only be appealed through CAP?

Later lien filings. CDP rights attach to the first notice of lien for each tax and period; CAP covers the proposed or actual filing of a lien at the first and each later filing.
Lien relief denials. A denied withdrawal, discharge, subordination or certificate of non-attachment, explained in whether a federal tax lien can be released, withdrawn, discharged or subordinated.
Levies and returned proceeds. CAP is available before or after a levy, and for a denied request to return levy proceeds, which must be made within 2 years of a levy made on or after March 23, 2017.
Seizures, before or after the seizure but before the property is sold.
Installment agreements that are rejected, modified or terminated; how plans work is covered in the IRS payment plan options.
Third-party claims. Someone who does not owe the tax but whose property was levied, or whose property was named in a nominee or alter ego lien, can use CAP; Publication 1660 notes that nominees and alter egos have no CDP rights, though transferees assessed under IRC 6901 do.

Some collection disputes use neither route. Publication 1660 sends a rejected offer in compromise, a proposed trust fund recovery penalty, a denied trust fund penalty claim and a denied penalty abatement request to the protest procedure in Publication 5. The trust fund penalty process is explained in whether the IRS can make you personally pay your company's unpaid payroll taxes.

What changes the answer

Which notice you hold. Only the notices under IRC 6320 and 6330 that Publication 1660 lists give CDP rights; everything else points to CAP or another procedure.
The calendar. Inside the CDP window you get a full hearing with court review; after it, an equivalent hearing within one year (which does not stop levies or pause the clock) or CAP.
Whether you dispute the tax itself. CAP cannot consider the existence or amount of the liability; CDP can only if you did not receive a notice of deficiency and had no other chance to dispute it (IRC 6330(c)(2)(B)).
Whether you want court review. Only a CDP determination can go to the Tax Court; a CAP decision is binding and cannot be reviewed by a court.
The collection deadline. A timely CDP hearing suspends the 10-year clock under IRC 6330(e), and so does an appeal of a rejected or terminated installment agreement, according to the IRS; other CAP appeals do not appear on the IRS's list of pausing events, which can matter on an old balance (see how long the IRS has to collect a tax debt).
Jeopardy and employment tax levies. Under Publication 1660, collection may continue during CAP if the IRS believes collection is at risk or the business meets the disqualified employment tax levy criteria.

For example: a terminated plan and a levy notice

For example, imagine a contractor with a payment plan who misses two payments after a slow season. The IRS sends a notice of intent to terminate the agreement. He calls the number on the notice within 30 days, asks for a manager, and when the manager will not reinstate the plan, his case goes to Appeals under CAP. Under Publication 1660, the IRS cannot levy for 30 days after a termination, or while a timely appeal is pending, unless collection is in jeopardy. Appeals reinstates the agreement with a lower payment after he shows his reduced income. Had Appeals upheld the termination, he could not go to court over that CAP decision. If the IRS later sends him a Final Notice of Intent to Levy for a period that has never had a levy notice, he would then have a separate, full CDP right with its own 30-day window and Tax Court review. This is a hypothetical, not a real case.

Common mistakes when choosing an appeal route

Using CAP when CDP is still open. CAP is quicker but gives up court review and the statutory bar on levies during a CDP hearing.
Missing the business-day deadlines. After a manager conference with a revenue officer case, CAP gives you 2 business days to say you will appeal and 3 to postmark Form 9423.
Arguing the tax in CAP. CAP cannot consider whether you owe the tax or how much.
Leaving out a solution. Publication 1660 says a CAP request must offer a way to resolve the problem, such as a plan, a bond or other property.
Assuming the Taxpayer Advocate can extend a deadline. Publication 1660 says the Taxpayer Advocate Service cannot extend the time to request a CDP, equivalent or CAP hearing.
Providing incomplete information. False or missing information, or fraud, voids an Appeals decision.

What to do this week

Read the title of the notice: if it says "Your Right to a Hearing," find the CDP deadline on it.
List every action you object to (lien, levy, seizure, plan rejection or termination) and the tax periods involved.
For a CDP right still open, prepare Form 12153; for CAP, call for a manager conference or prepare Form 9423 as Publication 1660 directs.
Write down the solution you will propose, with financial information to support it.
Calendar every business-day deadline from the day of the conference or notice, and keep proof of mailing.

Frequently asked questions

Can you use both CDP and CAP?

Yes, for different actions. A first levy notice can carry CDP rights while a later plan termination or seizure is appealed under CAP, and Publication 1660 notes that a levy may give you both CAP and CDP rights.

Who can represent you in CAP?

Publication 1660 says you may represent yourself at CDP, CAP and other Appeals proceedings, or be represented by an attorney, certified public accountant or enrolled agent, among others. Representation is explained in how a tax attorney represents you before the IRS.

Does CAP stop a levy?

Normally the IRS will not collect on the periods Appeals is considering during CAP, unless it believes collection is at risk. A levy already in place may still need a release request; see how to get a bank or wage levy released.

Can an offer in compromise be raised in either route?

An offer can be proposed as a collection alternative in a CDP hearing. A rejected offer is appealed through the Publication 5 protest procedure instead; the offer rules are in whether you qualify for an IRS offer in compromise.

What if you missed the CDP deadline?

You can ask for an equivalent hearing within one year (one year plus 5 business days for a lien), or use CAP. Neither pauses levies by law or leads to court review.

Is a CAP decision ever reviewed?

Not by a court. Publication 1660 notes other routes may exist for some issues, such as a third party's wrongful levy suit in district court.

How does Appeals look at the numbers?

In both routes, Appeals judges a proposed plan or alternative against your financial information and the IRS's expense tables, explained in how the IRS decides what you can afford to pay.

Choosing the right route in time

The choice between these routes is often made in days, and the wrong one can give up court review or let a deadline pass. Kathryn Meyer spent more than two decades in the IRS Office of Chief Counsel and represents taxpayers in collection appeals and in the Tax Court. If you have a lien, levy or plan notice, contact the firm or call (571) 560-8674 as soon as it arrives.

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