Table of Contents
- 8 Issues Taxpayers Commonly Raise in a CDP Hearing
- Why The Issues You Raise Matter
- 1. Whether The IRS Followed Required Procedures
- 2. A Challenge To The Underlying Tax Liability
- 3. An Installment Agreement
- 4. An Offer In Compromise Or Other Collection Alternative
- 5. Innocent Spouse Or Other Spousal Defenses
- 6. Whether The Proposed Collection Action Is Appropriate
- 7. Economic Hardship And Intrusiveness
- 8. Whether An Issue Is Barred Because It Was Raised Before Or Is Frivolous
- What These Eight Issues Have In Common
- Final Thoughts
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8 Issues Taxpayers Commonly Raise in a CDP Hearing
If the IRS has sent a Final Notice of Intent to Levy or a Notice of Federal Tax Lien filing, a Collection Due Process hearing can be one of the few structured opportunities to slow the collection process and put specific issues in front of the IRS Independent Office of Appeals. In general terms, a CDP hearing is not just about saying “I disagree.” It is about identifying the issues Appeals is legally allowed to consider, backing them up with documents, and preserving the record for possible court review.
In this post, you’ll learn eight issues taxpayers commonly raise in a CDP hearing, why those issues matter, and where people often run into procedural limits. If you want a fuller overview of how the process works from start to finish, this guide on protecting your rights in an IRS collection appeal pairs well with what follows.
Scroll to the bottom for every post in this series.
Why The Issues You Raise Matter
Under Internal Revenue Code section 6330, Appeals generally addresses three core areas in a CDP case: whether the IRS followed required procedures, any relevant issues the taxpayer raises, and whether the proposed collection action appropriately balances efficient tax collection against the taxpayer’s concern that the action be no more intrusive than necessary. The IRS and the Taxpayer Advocate Service both describe CDP hearings as a forum where taxpayers may raise relevant collection issues, including alternatives to enforced collection and certain liability-related arguments. 26 U.S.C. § 6330; IRS Publication 1660; Taxpayer Advocate Service overview
That matters because taxpayers usually cannot count on Appeals — or later, the Tax Court — to consider issues that were never properly raised during the hearing. The IRS’s own internal guidance notes that, in general, a taxpayer seeking Tax Court review can ask the court to consider only issues raised at the CDP hearing. IRS Internal Revenue Manual 35.3.23
1. Whether The IRS Followed Required Procedures
One of the most common CDP issues is the simplest: did the IRS do everything the law requires before filing the lien or moving forward with a levy?
Appeals is required to obtain verification that the requirements of applicable law and administrative procedure have been met. That can include reviewing whether the right notice was issued, whether the notice was sent properly, whether timing rules were followed, and whether required approvals were obtained where applicable. 26 U.S.C. § 6330(c)(1); IRS Collection Due Process Deskbook; IRS IRM 5.12.6
This issue comes up often when taxpayers say they never received the notice, received it at the wrong address, or believe the IRS moved too quickly. In levy cases especially, timing matters because a timely hearing request typically suspends levy action while the CDP case is pending. The IRS describes the hearing right in its CDP FAQs and Form 12153 materials. IRS CDP FAQs; Form 12153
Here’s what this often means in practice: even if a taxpayer is also asking for a payment alternative, it may still be worth identifying any procedural defects. In some cases, those defects shape what Appeals can sustain and what gets remanded or reconsidered.
2. A Challenge To The Underlying Tax Liability
Many taxpayers want to use the CDP hearing to argue that the tax bill itself is wrong. That can be one of the most important issues in the case — but only in limited circumstances.
The statute allows a taxpayer to challenge the existence or amount of the underlying tax liability if the taxpayer did not receive a statutory notice of deficiency for that liability and did not otherwise have an opportunity to dispute it. IRS guidance explains that a prior opportunity can include a prior conference with Appeals, whether offered before or after assessment. 26 U.S.C. § 6330(c)(2)(B); IRS IRM 35.3.23
This issue is especially common where the IRS assessed tax from a substitute for return, imposed certain penalties, or assessed trust fund recovery penalties or other liabilities the taxpayer says were never properly disputed before collection began. The IRS CDP Deskbook and Appeals guidance discuss liability issues in detail, including when they are precluded and when they can still be considered. IRS CDP Deskbook; IRS IRM 8.22.8
The catch is important: if the taxpayer had a prior meaningful chance to dispute the liability, Appeals may treat the issue as barred in the CDP case. That procedural line is one reason many people look closely at how to raise collection alternatives and liability arguments effectively before the hearing record is set.
3. An Installment Agreement
A request for an installment agreement is one of the most frequently raised CDP issues. IRS Publication 1660 specifically lists installment agreements as a collection alternative that may be raised during a hearing. IRS Publication 1660
In practical terms, this issue asks Appeals to consider whether the tax debt can be resolved through monthly payments rather than levy or continued lien enforcement. Appeals often looks for current financial information, filed returns, and proof that the taxpayer is in ongoing compliance. IRS internal guidance notes that taxpayers generally qualify only for collection alternatives available to similarly situated taxpayers, and that Appeals may require supporting financial documentation before deciding the issue. IRS Internal Revenue Bulletin 2005-43; IRS IRM 8.22.7
For many taxpayers, this is where the CDP process becomes less about abstract rights and more about paperwork, deadlines, and financial presentation. If the file is incomplete, Appeals may close the case without giving the proposed alternative much weight. That is one reason some taxpayers spend time beforehand learning about common mistakes that can affect review rights in a CDP case.
4. An Offer In Compromise Or Other Collection Alternative
Another common issue is whether the taxpayer qualifies for an Offer in Compromise, temporary hardship status, or another alternative to enforced collection. Publication 1660 lists collection alternatives broadly, including an installment agreement and offer in compromise. Form 12153 also mentions “currently unable to pay” as a possible issue to raise. IRS Publication 1660; Form 12153
This category can include:
- Offer in Compromise
- Currently Not Collectible status
- Subordination, discharge, or withdrawal issues tied to a lien
- Asset substitution proposals
- Other alternatives that may reduce the intrusiveness of collection
IRS Appeals guidance confirms that taxpayers may request collection alternatives in a CDP hearing, and that Appeals evaluates them based on the facts, the taxpayer’s financial condition, and overall compliance posture. IRS IRM 8.22.7
For someone facing a levy, this may be the core of the hearing. In general terms, the taxpayer is not only arguing against the IRS’s proposed collection action but also presenting a workable alternative. That distinction matters because CDP is often strongest when it pairs an objection with a realistic resolution path.
5. Innocent Spouse Or Other Spousal Defenses
CDP hearings also commonly involve spousal defenses, especially where the tax debt arises from a joint return and one spouse says the liability is really tied to the other spouse’s income, deductions, or reporting decisions.
IRS Publication 1660 expressly lists appropriate spousal defenses as an issue a taxpayer may raise in a CDP hearing. The IRS’s litigation guidance also recognizes spousal defenses as valid CDP issues, while noting that the issue can be precluded if the IRS has already made a final determination on that defense in a prior final determination letter or statutory notice of deficiency. IRS Publication 1660; IRS IRM 35.3.23
Taxpayers often use the hearing to explain that collection against them would be unfair because they lacked knowledge of the understatement or because equity-based innocent spouse relief may apply. IRS Publication 971 explains that issuance of a section 6330 levy notice can intersect with innocent spouse claims. IRS Publication 971
This area can get technical quickly. Relief may depend on filing history, timing, marital status, attribution of income, and what was known at the time the return was signed. An attorney might help determine whether the issue belongs inside the CDP case, in a separate innocent spouse submission, or in both.
6. Whether The Proposed Collection Action Is Appropriate
Some taxpayers use the hearing to argue that the specific collection action the IRS chose is not appropriate, even if the liability itself is not disputed.
That can include arguments like:
- the levy is premature,
- the lien is unnecessarily damaging,
- the IRS has chosen a collection tool that does not fit the facts,
- the account could be resolved in a less disruptive way, or
- the agency has not adequately considered the taxpayer’s circumstances.
The governing statute allows a taxpayer to raise “any relevant issue relating to the unpaid tax or the proposed levy,” and IRS materials reflect that taxpayers may contest the appropriateness of collection action. 26 U.S.C. § 6330(c)(2)(A); IRS Publication 1660
This issue often overlaps with collection alternatives but is not identical to them. A taxpayer may be saying, in effect: even if I owe this tax, this particular levy or lien approach goes too far under the circumstances.
That can be particularly important for business taxpayers, self-employed individuals, and people whose bank account or receivables are central to keeping income flowing. Sometimes a levy meant to collect taxes can also impair the very cash flow that could fund a payment arrangement.
7. Economic Hardship And Intrusiveness
A closely related issue is economic hardship — whether collection is causing or is likely to cause serious financial harm. Publication 1660 identifies hardship concerns as part of what can be raised in a CDP hearing, and the Taxpayer Advocate Service emphasizes that Appeals must consider whether the collection action is no more intrusive than necessary. IRS Publication 1660; Taxpayer Advocate Service taxpayer rights page
This is grounded in the statute’s balancing requirement. In making a determination, Appeals is directed to consider whether the proposed collection action balances the need for efficient tax collection with the taxpayer’s legitimate concern that the action be no more intrusive than necessary. 26 U.S.C. § 6330(c)(3)(C)
In real life, this issue may involve facts like:
- inability to pay rent, mortgage, or utilities,
- loss of payroll funding for a small business,
- medical expenses,
- job loss,
- disability,
- reduced income,
- or a levy’s ripple effects on dependents.
The National Taxpayer Advocate has repeatedly highlighted the importance of the CDP balancing test, noting that it was designed to inject fairness into the collection process rather than turn the hearing into a rubber stamp. Taxpayer Advocate Service discussion of CDP balancing concerns
For many taxpayers, this is where facts and documentation carry real weight. Bank statements, payroll records, medical bills, profit-and-loss statements, and sworn explanations may all shape how seriously Appeals evaluates intrusiveness.
8. Whether An Issue Is Barred Because It Was Raised Before Or Is Frivolous
This last issue is slightly different because it often arises as a dispute about what can be heard at all. Many CDP cases turn on whether the taxpayer’s issue is properly before Appeals or legally precluded.
Under section 6330(c)(4), an issue generally may not be raised in a CDP hearing if it was raised and considered at a previous administrative or judicial proceeding and the taxpayer meaningfully participated. The IRS also states that issues identified as frivolous or made solely to delay collection are not proper CDP issues. 26 U.S.C. § 6330(c)(4); IRS IRM 35.3.23; IRS IRM 5.1.9
That is why taxpayers commonly find themselves debating questions like:
- Did I really have a prior chance to contest this liability?
- Was that prior proceeding meaningful?
- Is this a new issue or the same old issue framed differently?
- Is Appeals treating a legitimate argument as frivolous?
- Did I preserve the issue clearly enough for later review?
The IRS warns that certain anti-tax arguments are considered frivolous, and those arguments can lead not only to rejection of the issue but also, in some settings, penalties. IRS discussion of frivolous tax arguments
This issue may sound procedural, but it can shape the entire case. A taxpayer who frames a liability objection the wrong way may be told the issue is barred. A taxpayer who raises only generalized grievances may leave Appeals with little to decide. And a taxpayer who focuses on nonfrivolous, documented, legally recognized issues often puts the case in a much stronger procedural posture.
What These Eight Issues Have In Common
These issues are different on the surface, but they share a few themes:
- CDP hearings are issue-driven. Appeals is not there to re-open everything automatically.
- Documentation often decides whether an issue gets traction. Financial records, notices, prior correspondence, and return history all matter.
- Timing can affect what is still available. A timely CDP request generally preserves more rights than an equivalent hearing request filed after the 30-day window. IRS CDP FAQs; Taxpayer Advocate Service glossary entry on timely CDP requests
- Issue preservation matters for court review. The record developed at Appeals can shape what happens next if the case goes to Tax Court. IRS IRM 35.3.23
The stakes can be real. The National Taxpayer Advocate continues to treat CDP as a significant taxpayer-rights area, and recent commentary after the Supreme Court’s 2024 Zuch decision has focused on gaps in judicial review when the collection action disappears before final resolution. Taxpayer Advocate Service blog on post-Zuch CDP gaps
Final Thoughts
A CDP hearing can be one of the few formal chances to raise targeted objections before the IRS moves forward with lien or levy enforcement. The eight issues taxpayers commonly raise are usually some combination of procedure, liability, hardship, collection alternatives, and fairness. In general terms, the strongest CDP presentations tend to connect the issue raised to the statute, the IRS record, and the taxpayer’s documents.
If you’re dealing with a levy notice, lien filing, disputed assessment, or a rejected payment proposal, it may help to speak with a tax controversy attorney who has documented experience handling highly similar IRS collection matters. Visit ReferU.AI to get matched with an attorney who has demonstrable experience in cases like yours — for free.
