IRS Form 12153

Key takeaways

• Form 12153 halts IRS levy action and suspends the 10-year collection period while your case is under review. 
• You have 30 days from the date on your levy notice to request a CDP hearing with full appeal rights.
• A CDP hearing can open the door to better tax resolution options, such as challenging the debt, proposing payment alternatives, and raising other defences. 
• Missing the deadline limits your rights to an “equivalent hearing” that doesn’t stop levies or provide appeal options if you disagree with the hearing. 
• Professional representation strengthens your appeal and helps you navigate the otherwise complex CDP process. 

What is IRS Form 12153?

IRS Form 12153 is an official request form for a Collection Due Process (CDP) hearing with the IRS Office of Appeals. You can use this form to request a hearing when: 

• You have had a Notice of Federal Tax Lien indicating that the IRS has placed a legal claim on your property. 
• You have received a Final Notice of Intent to Levy (typically Letter 1058 or LT11) warning that the IRS will seize your assets. 

This form allows you to officially dispute the collection actions and request a hearing with an appeals officer. Note: The officer works independently from the IRS collection division, meaning you get a different person to look at the situation than the IRS employees or revenue officers you’ve spoken with previously. Filing this form by the deadline also halts collection actions. 

How Filing Form 12153 Immediately Halts IRS Levies 

If you file this form by the 30-day deadline on the levy notice, the IRS legally has to halt any levy action. This protection stays effective throughout the hearing and any subsequent appeals. That means the IRS cannot take any action to seize your assets while the hearing is happening. 

This filing also suspends the 10-year statute of limitations for IRS collections. It pauses the clock, meaning the statute will be extended by however long the hearing takes. 

The levy prevention doesn’t stop the IRS from filing a Notice of Federal Tax Lien. But it does stop them from taking your property while the hearing is pending. If you miss the deadline, you can still appeal, but the process is significantly different. 

The 30-Day Deadline: What Happens if You Miss It 

If you miss the deadline, the IRS can move forward with levy actions, including garnishing your wages, levying your bank account, or seizing your assets. 

You have up to a year to request an equivalent hearing with Form 12153, but this option does not give you the same protections you get with a CDP hearing. In all cases, remember the appeals process is very complicated. Consult with a tax attorney to protect yourself and your assets. 

CDP Hearing vs. Equivalent Hearing: Main Differences 

Understanding the differences between a CDP hearing and an equivalent hearing is important, as it directly affects how the IRS deals with your case. Let’s break down what you should know about each of these hearings.

Collection Due Process (CDP) hearing filed within 30 days: 

• Stops levy action during the hearing and appeal process
• “Pauses” the 10-year collection period while this happens
• Gives you maximum negotiation power with the appeals officer 
• Gives you the right to appeal the determination to the Tax Court 

Equivalent Hearing filed after the 30-day deadline: 

• Doesn’t stop levies, meaning the IRS can continue with collection action
• Doesn’t suspend the 10-year period during the hearing 
• Offers no right to a judicial review in Tax Court, meaning your options are very limited if you disagree with the decision made in the equivalent hearing 
• Gives you the same chance to propose alternative solutions, but with less leverage 

While both hearings mean you can raise the same issues and propose alternative collection options, the main difference is the procedural protections. Missing that all-important deadline offers far fewer protections than you typically get as part of the CDP hearing.

Issues You Can Raise at a CDP Hearing 

The CDP hearing gives you the chance to challenge your tax situation. During the process, you will be able to raise the following issues: 

Liability disputes 

First up, you can challenge whether you actually owe the tax in question, but only if you did not receive a deficiency notice (i.e. the formal letter explaining why you owe additional tax) and haven’t had a prior opportunity to dispute the amount, you may be able to do so now. 

Innocent spouse relief 

In cases where you have filed jointly and believe your spouse (or former spouse) is solely responsible for the debt, you request innocent spouse relief during your CDP hearing, using Form 8857 for the claim. 

Bankruptcy discharge 

If you have filed for bankruptcy and your tax debts were discharged, you can present this as your defence during the CDP hearing. The appeals officer will then verify whether your specific tax liabilities were actually discharged. 

Misapplied payments 

If you believe you made more payments to the IRS than were credited to your account, you can bring this to light during the CDP hearing process. The hearing gives you the chance to contest the IRS’s records and ensure that none of the payments you made were misapplied. 

Lien-related issues

If you’re facing federal lien notices, the CDP hearing gives you the chance to request a lien withdrawal, subordination, discharge, or release. Of course, you will need to meet the requirements of these changes before the IRS approves them. 

Collection alternatives 

If you’re unable to pay the tax debt you owe, the CDP hearing allows you to propose alternative solutions. These include installment agreements, Offers in Compromise (OIC), and Currently Not Collectible status. By working with an attorney, you can find the right tax debt solution for your case. This gives you the best chance of your proposal being approved.

Collection action appropriateness 

As part of the CDP hearing, you can also argue that the proposed levy would create economic hardship for you, or that the IRS should pursue other collection methods first. 

The CDP hearing process gives you the opportunity to state your case and get the best tax debt solution. The appeals officer has to balance the government’s interest in efficient tax collection and your legitimate concerns about the collection action.

Collection Alternatives You Can Propose using Form 12153

When filing Form 12153, you can propose workable tax debt solutions. Understanding the best outcome for your situation is the first step in this process. You can work with an enrolled agent to better understand your options. Here’s an overview of the main alternatives: 

Installment agreements 

When paying the total tax debt you owe is not an option, you can propose an installment agreement. If your balance is under $50,000 (sometimes up to $250,000), the IRS may approve an installment agreement without you needing to offer too much documentation. 

However, for larger amounts, you will need to complete Form 433-A (for individuals) and Form 433-B (for businesses). This covers your income, expenses, and any assets you have. You may also need to file these forms if you owe payroll taxes, have recently defaulted on a payment plan, or a revenue officer requires them.

Offer in Compromise (OIC)

Another option is to propose settling the tax debt for less than what you owe. This is known as an Offer in Compromise (OIC). If you cannot pay the full debt, based on your income and assets, the IRS may approve an OIC. The agency would rather recover a portion of the debt than not get anything at all. Your attorney can advise whether this is the right choice for your case. 

Currently Not Collectible status 

Should you have experienced genuine financial hardship, the appeals officer can place your account on Currently Not Collectible status. Examples of “hardship” can include medical issues, expenses that outweigh your income, and unemployment. The status temporarily stops any collection activities. However, penalties and interest continue to accrue.

Penalty abatement 

Additionally, you may be able to request a removal of penalties during your CDP hearing. This is not technically a collection alternative, but it can lower your overall debt. You may be eligible for penalty abatement if you have a “reasonable cause” for either late filing or late payment. The IRS also offers first-time abatement to taxpayers with a history of compliance and abatement for penalties incurred based on incorrect written advice from the IRS. 

The sooner you submit Form 12153, the faster you can come to a tax debt resolution. However, accuracy matters here, too. Proposing a solution you’re eligible for is a must. By working with an expert tax attorney, you increase your chance of approval. 

What to Include on Form 12153

Completing Form 12153 correctly will immediately strengthen your case. While you can technically do this yourself, it’s more strategic to work with an expert. The form requires: 

Your basis for dispute

After filling out your basic information, you need to include a basis for your dispute. The IRS won’t process your request without a stated reason. You can check multiple boxes here, while also adding details in the space provided. Be as specific as you can when explaining why you’re disputing the Final Notice of Intent to Levy.

Supporting documents

You will also need to attach your supporting documentation. This includes documents such as a copy of your notice, proof of payments, bankruptcy discharge papers, and financial statements. The more evidence you can provide to support your position, the better your case. 

Proposed resolutions

Finally, you should include a clear proposed resolution to settle the tax debt. Your tax attorney can help you decide what the right solution is for your case. Choosing one that suits your circumstances puts you in the best position and gives you a good chance of approval. 

What Happens After You File Form 12153

When you have filed the form and the IRS receives it, they will transfer your case to the Office of Appeals. From there, an appeals officer will review it and contact you to schedule your hearing. 

CDP hearings are usually conducted over the phone. However, you can also request an in-person or video conference hearing. If you are being represented by a tax resolution professional, they will likely be able to handle the hearing without you needing to be present.

During the CDP hearing, the appeals officer will: 

• Review the facts of your case along with the documents you submitted 
• Discuss any issues you raised on Form 12153
• Consider the collection alternatives you proposed
• May ask for more information or verification 
• Explain how the IRS arrived at its conclusion of your tax liability 

When the officer has reviewed your case, they may send your information to the IRS Collection Function for verification. You will then get a Notice of Determination. 

If you disagree with the outcome, you have 30 days to petition the Tax Court for review. Equivalent hearings don’t have this appeal right. 

Why Professional Representation is Essential 

Working with a tax attorney when filing Form 12153 is essential. While you can technically do it yourself, the form and subsequent CDP hearing can be complex. 

One wrong step, and you could ruin your chances of a fair tax debt resolution. An experienced tax attorney understands the correct process and can support you in finding the best solution for your debt.

At McLaud Law P.C., our tax attorney and enrolled agents can help you navigate this complicated area of tax debt law. Request a free consultation today or call us at 585-397-7785.

FAQs on Form 12153

Who can file Form 12153?

Taxpayers can file this form if they have received a notice saying they have the right to a Collection Due Process hearing. You can use this form to request a CDP hearing or an equivalent hearing.

What if I didn’t receive a notice about my right to a CDP hearing?

You can only request a CDP hearing if the IRS sent you a notice saying you have that right. In other situations, you may have other appeal rights – for example, through the Collection Appeals Program (CAP). If you didn’t receive the notice because it was sent to the wrong address, you can file Form 12153 as long as it’s before the deadline on the notice. Your IRS online account should show all of the notices that were sent to you. 

When is the deadline to file Form 12153?

The deadline to file Form 12153 to request a CDP hearing is 30 days from the date the IRS sent the levy notice. It is not 30 days from the date you received the notice. The deadline should be clearly noted on the notice. Additionally, you have up to one year to file this form to request an equivalent hearing.

Can I request a tax court hearing with Form 12153?

No, you cannot request a tax court hearing with Form 12153. However, if you request a CDP hearing with this form and you disagree with the results of that hearing, you can appeal to the Tax Court, but you must do so by the deadline on the notice of determination (sent after the CDP hearing). 

What if the IRS doesn’t stop the levy when I file Form 12153?

If you missed the 30-day deadline, the IRS doesn’t have to stop the levy. However, if you mailed the form, the IRS may have started the levy before opening your envelope. Other issues may also be happening, including IRS errors. Contact a tax attorney for help. 

This communication is Attorney Advertising. It is presented for informational purposes only and does not constitute legal advice. Every legal situation is different, and prior results do not guarantee a similar outcome. This communication does not create an attorney-client relationship between McLaud Law P.C. and the recipient.