Late CDP Request After a Final Levy Notice
Tanya, a self-employed graphic designer in Tampa, filed a joint 2022 Form 1040 with her then-husband. The return showed $62,000 of unpaid tax. The IRS assessed the tax in May 2024 and sent a Letter 1058, Final Notice of Intent to Levy, dated March 3, 2025, to Tanya's last known address. Tanya had moved in January 2025 and did not update her address with the IRS, but the notice was forwarded and she received it on March 7. She believes her ex-husband should pay the entire balance because he earned most of the income. On April 4, 2025, she mailed Form 12153 by certified mail, postmarked that day, requesting a collection due process hearing and proposing a $500-per-month installment agreement. She also submitted Form 2848 for her CPA. The IRS received the request on April 8. Tanya has no prior CDP hearing and has not filed an innocent spouse claim.
1. Was Tanya's CDP request timely? Explain the 30-day period, the mailing rule, and the consequences if it was late.
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The CDP request was late. The IRS must receive a timely request for a CDP hearing within the 30-day period beginning the day after the final notice is dated. The notice is dated March 3, 2025. Counting March 4 as day 1, March 31 is day 28, April 1 is day 29, and April 2 is day 30. The 30th day was April 2, 2025, a Wednesday, so no weekend or holiday extension applies. Tanya's request was postmarked April 4, 2025, two days after the deadline. The timely mailing rule treats a document as filed on the date of the U.S. postmark only if the postmark is on or before the due date; a late postmark does not cure the late request.
The IRS may treat the late request as an equivalent hearing request rather than a CDP hearing. An equivalent hearing allows the taxpayer to discuss collection alternatives, but it does not give Tax Court review and the IRS decision is generally final. Tanya's levy exposure is not automatically stayed by the late request. She should still ask the IRS to consider the installment agreement and any hardship, but she should not expect CDP appeal rights.
2. Assume the request had been timely. What issues could Tanya raise, and what issues could she not raise?
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In a timely CDP hearing, Tanya could raise collection alternatives such as an installment agreement, an offer in compromise, or currently not collectible status. She could challenge whether the proposed levy is appropriate and whether it balances the need for efficient collection with her legitimate concern that collection be no more intrusive than necessary. She could also raise spousal relief if she has not previously done so. Because the liability arises from a joint return, she may file Form 8857 for innocent spouse relief or consider separation of liability, if the facts support it.
She generally cannot use the CDP hearing to relitigate the existence or amount of the 2022 tax if she already had an opportunity to dispute it. Her belief that her ex-husband should pay is not by itself a defense to joint and several liability. A joint return makes each spouse liable for the full tax unless relief is granted. The CPA may represent her with Form 2848, but the CPA should be careful not to raise frivolous arguments. The focus should be on collection alternatives and a timely innocent spouse claim.
3. What should the CPA do now to protect Tanya's collection and Tax Court rights?
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The CPA should preserve proof of the April 4 postmark and the April 8 receipt date, because the late date affects the available forum. The CPA should immediately request an equivalent hearing in writing if the IRS has not already scheduled one, and should submit a completed Form 433-A or 433-F with income and expense documentation to support the $500-per-month proposal. The CPA should also request a collection hold only if there is a genuine economic hardship; a late CDP request does not automatically stop levy action.
Separately, the CPA should evaluate and promptly file Form 8857 for innocent spouse relief if Tanya qualifies. The CPA should update Tanya's address with the IRS and ensure that all future notices go to the correct address. If a levy has already been issued, the CPA should request release if the levy is causing economic hardship or if the underlying liability is being considered under innocent spouse procedures. The CPA should explain that the equivalent hearing does not provide Tax Court review, so any adverse determination cannot be appealed to the Tax Court in the same way as a timely CDP determination.