After submitting a Collection Due Process hearing (CDP hearing) request, you might be wondering what happens next. To alleviate the stress and anxiety of guessing, you should know what can happen after you file a CDP hearing request. In brief, the Appeals employee might decide that you do not owe the liability, you can pay it using a collection alternative, or he might reject your CDP request.
Rejection of the CDP Hearing Request
CDP hearing requests can be rejected entirely or partially. Why does a CDP hearing request get rejected? First, the Appeals Office rejects frivolous requests. It can reject the entire request and send the taxpayer a disregard letter to inform the taxpayer that it will not consider the matter. As a result, the taxpayer loses the opportunity for a hearing with the Appeals employee or go to the Tax Court.
Second, the Appeals Office commonly rejects a specific request for tax resolution through a collection alternative because of the taxpayer’s non-compliance. However, suppose the rejection is due to this non-compliance basis. In that case, the taxpayer will still receive a determination letter informing him that he can go to Tax Court to argue or contest the rejection. The taxpayer must show some procedural defect in the assessment or the process leading to the determination.
Withdrawal of the CDP Request
During the hearing, you could find yourself getting into an agreement with the Appeals employee on a resolution of the collection action against you. It can also be that you have reached an agreement with Collections before forwarding the case to the Appeals Office. If this is the case, the Appeals employee will ask you to sign a form (Form 12256) used in withdrawing a CDP request. The form states that the taxpayer has resolved the CDP matter. It also provides the taxpayer’s rights that are waived upon signing the waiver.
However, if you want to preserve your right to seek a retained jurisdiction hearing in case of the non-implementation of the resolution of the CDP case, you may use Form 12257. Signing the form would mean that you have given up your right to go to Tax Court to contest the determination that the Appeals employee makes, yet you may go to court if the resolution does not proceed as planned.
After the CDP hearing has been terminated, the Appeals employee should send a determination letter (Form 3193) to the taxpayer, except if the CDP request has been withdrawn or rejected.
A determination letter is one of the letters that the Appeals Office uses to conclude the taxpayer’s efforts to file the CDP case. It summarizes the conclusions of the Appeals employee and describes the grounds for the determination. It should discuss all the issues raised in the case and the reasons why the Appeals Office rejected the request. If it fails to provide the proper description of the resolution or the administrative file to provide adequate support, it may lead to remand.