The following are non-processable criteria; the cases are returned to Collection as Premature Referrals (PR):

The following cases are no longer considered premature referrals. Instead, work these cases as Separate Timeliness Determinations:

IRM 8.22.2.2.4.10 for procedures for working separate timeliness determinations.

Appeals rescinds CDP notices it determines were issued in error. Erroneous CDP notices are when the requested lien or levy action is prohibited by law. Examples are when the taxpayer has:

Another example of an erroneous CDP Notice is where the taxpayer waived all rights to CDP notices and hearings, but a CDP notice is nonetheless issued. The notice should be deemed invalid and Appeals can rescind the notice.

In all instances, the rescission is unilateral. The appropriate letters to use are:

If the taxpayer requests a CDP hearing as a result of an erroneously issued CDP notice and the CDP notice is rescinded, advise the taxpayer of the following:

In the "Remarks" section of Form 5402, instruct APS to input TC 972 AC 069 using the same date of the rescinded TC 971 AC 069.

CDP notice issues at the following times are valid, even if the levy itself is prohibited. The CDP notice may not be rescinded:

Pending offers, installment agreements and innocent spouse requests will be considered by Appeals in the CDP or equivalent hearing if the taxpayer requests a hearing.

FTM is available on field Collection cases to taxpayers who qualify for a CDP or Equivalent Hearing:

For a CDP case to qualify for FTM, the taxpayer must meet the following requirements. If the taxpayer meets these requirements, the Revenue Officer may provide the taxpayer Publication 3605, Fast Track Mediation, and offer the taxpayer the option of using FTM to expedite resolution of the case. However the taxpayer must -

Prior to FTM the taxpayer may first request a conference with the field collection group manager. If resolution is not reached, the taxpayer can submit a request for FTM. Both the taxpayer and the RO must sign an agreement to mediate prior to mediation being scheduled. Collection does not have to agree to mediation. However, denial of a mediation request requires approval of the group manager and concurrence by the second level manager. The basis for the denial is communicated to the taxpayer and documented in the case history.

If FTM is recommended, Collection employees are responsible for completing Form 13369, Agreement to Mediate, and a brief summary of issues, done in a memorandum form. Collection forwards both documents to Appeals. Appeals employees trained as mediators conduct the session; however, they do not have settlement authority. Both parties must agree in order to reach a resolution.

Advise the taxpayer that if mediation results in an agreement between the taxpayer and Collection, they must withdraw the hearing request to finalize the agreement. If the taxpayer does not withdraw the request for a hearing, the case goes forward to Appeals as a CDP or equivalent hearing.

Collection should forward to the local Appeals Office within three business days of obtaining the taxpayer's signature the signed Agreement to Mediate and summary of issues. Jurisdiction and statute of limitation responsibility remains with Collection and, therefore, the case file is not forwarded to Appeals. Local Appeals and Collection offices work out their own procedures for prompt transmittal of cases to the local Appeals office.

Collection sends a copy of the signed Agreement to Mediate to the taxpayer or their representative:

The entire process normally takes an average of 30-40 calendar days to complete. If the mediation session is not held within a reasonable amount of time, the mediator may consider returning the request. The mediator attempts to bring the parties to a mutual resolution of the issues during the mediation session. If, after a reasonable time, it is apparent the parties will not reach resolution, the mediator may terminate the mediation session and the case can be referred to Appeals for the CDP hearing.

Refer to Rev. Proc. 2003-41, 2003-1 C.B. 1047, and IRM 8.26.3 Small Business Self Employed (SB/SE) Fast Track Mediation for additional information.

Add Feature Code "FT" to CDP WUNO.

Revenue Procedure 2000-43, 2000–2 C.B. 404, provides for the prohibition of certain ex parte communications that take place between Appeals and another Service function without the participation of the taxpayer or the taxpayer's representative.

Not all ex parte communications are prohibited. Appeals and other Service functions may communicate regarding the following matters:

provided that they do not address the substance of the issues or positions taken in the case.

Appeals must give the taxpayer/representative the opportunity to participate in any discussions with another Service function which concern matters other than those in (2) above. Following are examples of inquiries Appeals employees may make without involving the taxpayer/representative:

Communications with the originating function which extend beyond matters of the type described above and address the substance of the issues in the case are prohibited unless the taxpayer is given the opportunity to participate

The taxpayer/representative can waive the ex parte prohibition. Generally a waiver will be granted on a communication-by-communication basis. The waiver could encompass all communications that might occur during the course of Appeals consideration of a specified case.

Prohibited ex parte communications include discussions about the:

The hearing officer must share a prohibited ex parte communication received orally or in writing from the IRS (Collection or Examination) with the taxpayer or his representative as soon as possible.

If the hearing officer promptly provides the information to the taxpayer and gives the taxpayer an opportunity to comment on the information before using the information in their determination, then it is not a prohibited ex parte communication.

If a prohibited ex parte communication is made orally or in writing, give the taxpayer an opportunity to respond to the information.

IRM 8.24.1.3 describes when a jeopardy levy may occur. A jeopardy levy may be issued before or after the taxpayer has been given a CDP notice of intent to levy and right to a hearing.

If Collection commences levy action during the CDP hearing (or after the CDP hearing was requested), incorporate the appropriateness of the levy (reasonableness of the finding of jeopardy of collection) in the CDP hearing. There is no separate right to an additional CDP hearing or IRC §7429 hearing at this time.

The taxpayer can sometimes also appeal the jeopardy levy under the Collection Appeals Program (CAP).

See IRM 8.24.1.3 for additional information on jeopardy levies.

The "Small Business and Work Opportunity Tax Act of 2007" modified the collection due process (CDP) procedures for employment tax liabilities by amending IRC §6330(f) to permit levy without first giving a taxpayer owing employment taxes a pre-levy CDP notice if the levy is a "disqualified employment tax levy (DETL)."

A tax period may be collected by a DETL if the following requirements are satisfied:

Collection may issue a DETL if the tax period(s) to be collected meet(s) the above requirements. Even if a tax period qualifies for a DETL, Collection has the option to issue a DETL or provide the taxpayer with a pre-levy CDP notice. Collection might decide to issue a pre-levy CDP notice if no IRC §6331(d) notice (CP 504) has been issued or there has been no contact with the taxpayer within the last 180 days.

Employment taxes are defined as FICA, FUTA, and withheld income tax. It includes taxes reported on:

The "prior" request refers to a timely, processable CDP levy hearing request and also includes:

The "prior" request does NOT include:

Use one or more of the following to identify a prior timely CDP levy hearing request:

The "prior" hearing request must have involved employment taxes arising within the two-year period before the beginning of the taxable period for which the DETL is served.

The two-year look-back period is measured from the beginning of the period for which the DETL is served. If the taxpayer requested a CDP levy hearing for employment taxes that arose during the two-year look-back period, the period qualifies for a DETL.

Collection issues a post-levy CDP notice (L1058D) within 10 days after the issuance of a DETL. The notice shall be:

Collection processes and forwards to Appeals the DETL post-levy hearing request in the same manner as other CDP hearing requests. Collection:

Follow procedures in IRM 8.22.2.2.4 for the review and documentation requirements of DETL hearing requests. Current standards for review and documentation of CDP cases apply to DETL hearing requests. DETL hearing requests receive priority consideration. IRM 8.22.2.2.6.5

Verify the following:

If the tax period meets the criteria for issuing a DETL, the taxpayer should have been issued the Notice of Intent to Levy under IRC §6331(d) prior to the issuance of the DETL. In most instances, this is the CP 504 notice or the "Status 58" notice.

If a CP 504 notice (or any other IRC §6331(d) notice) was not issued, and the DETL attached the taxpayer’s property, the levy was illegal and, unless the taxpayer otherwise consents, the levy must be released and any levied property returned in accordance with IRC §6343(d) (see note for applicable time limit). However, the L1058D is valid. Under these circumstances, treat the L1058D as a pre-levy notice under IRC §6330(a). (For future levies, the L1058D also satisfies the requirements of IRC §6331(d).

If a hearing request made in response to the post-DETL L1058D includes a tax period not on the L1058D, the tax period may have been listed on a prior CDP levy notice issued to the taxpayer. Verify this by checking TXMODA for a TC 971 AC 069. If the taxpayer was issued a prior CDP levy notice, the taxpayer may not be entitled to a CDP hearing for that period with the current CDP hearing, but may qualify for an equivalent hearing. There is no need to confirm a DETL was properly issued for that period.

Make a separate determination for each DETL period to determine if the period qualifies for the DETL.

If you determine none of the periods qualify for the DETL, notify the Revenue Officer (RO) via encrypted E-mail (with a "cc" to the RO Group Manager) to immediately release the levy. Identify the taxpayer in the E-mail with the following information:

Choose the applicable explanation why the period(s) do not qualify for the DETL from the following list:

End the E-mail with the following paragraph:

Treat the post-levy CDP L1058D Notice as a pre-levy CDP Notice. Follow established procedures in scheduling a pre-levy conference.

If you determine one or more of the periods do not qualify for the DETL, take the following actions:

If all the periods on the DETL qualify for DETL status, continue working the case following established procedures.

Ensure the RO requested TC 971 AC 069 on the DETL hearing request period(s):

A DETL may be served to collect DETL tax periods during a timely requested pre- or post-levy CDP hearing or judicial review of such hearing. If a DETL is served during a CDP hearing, the SO determines if the DETL is permitted by using the procedures described above.

eCase functionality was introduced to Appeals as a way to eliminate the manual effort required to card-in cases.

The idea behind eCase functionality is that tax return and case information that must be shared from one operating unit to another should not have to be entered every time it moves from one system to another.

ACS and ICS CDP case data is transferred to ACDS via eCase.

eCase is an electronic means of transferring systems data such as:

eCase:

eCase information is available from ACDS via the "eCase Info" button after accessing a WUNO. The "eCase Info" button is grayed-out if eCase information is not available.

CDP cases are assigned one of the following case TYPE codes:

Verify accuracy of TYPE:

If multiple periods are listed on a CDP request and you determine a couple periods are late-filed and lack an EH request (either verbal or written) or do not qualify for an EH (i.e., CDP notice greater than a year old), do not return the entire case as a Premature Referral. Instead, address the situation in the Substantive Contact Letter and during the conference.

If the taxpayer states they do not want an equivalent hearing or is unresponsive and a conference is not held, take the following actions:

You must submit a request to your local APS to update CDPTS with any changes you make to the Case TYPE. Examples of Case TYPE changes:

Review the Case Summary Cards (CSC) and verify the correct periods were carded-in and the MFT is correct.

A request for a CDP hearing includes ALL periods listed on the CDP Lien or Levy Notice.

If the taxpayer insists they are only interested in certain periods and not all periods being part of the hearing, request that APS:

You must submit a request to your local APS to update CDPTS with any changes you make to the Tax Periods and/or MFT. Examples of Tax Period and MFT changes:

CDP cases may have one or more of the following feature codes:

Ensure the Case Summary Card reflects all applicable feature codes.

IRC 6320(b)(3) and IRC 6330(b)(3) require that an officer or employee who has had no prior involvement with respect to the same unpaid tax conduct the hearing. Prior involvement includes participation or involvement in a matter (other than a prior CDP hearing) that the taxpayer may have with respect to the tax and tax period shown on the CDP notice. The "impartiality" statement, affirming no prior involvement, must be documented in the case activity record in the first AN entry by each technical employee working on the CDP case. The only exception to documenting "no prior involvement" in Case Activity Records is where a withdrawal is received before analysis is conducted and no substantive contact has been made. The "impartiality" statement must also be present in the attachment to the determination or decision letter or on the Form 12257 at the conclusion of the hearing.

Prior involvement exists only when the same taxpayer, tax, and the tax period at issue in the CDP hearing were also at issue in the prior non-CDP matter and the appeals employee actually participated in the prior matter. For this purpose, an equivalent hearing is a non-CDP matter. If an officer or employee conducted an equivalent hearing with a taxpayer about the same tax and tax period now at issue in a CDP hearing, the officer or employee has had prior involvement.

A hearing officer who served as mediator with respect to an examination issue or a collection issue for a tax period subject to a CDP hearing will be considered to have had prior involvement.

The prior involvement rules also apply to equivalent hearings in a manner similar to CDP hearings. Prior involvement by a Settlement Officer or employee with a taxpayer, tax and tax period in an equivalent hearing or other non-CDP matter prevents the officer or employee from conducting a CDP hearing, without first securing a Form 14041 waiver. However, involvement in a prior CDP hearing with the same taxpayer, tax and tax period as an equivalent hearing is not prior involvement that would prevent the officer or employee from conducting the equivalent hearing.

The prior involvement restriction only applies to the officer conducting the hearing, not the officer’s manager who signs the notice of determination or decision letter.

If all hearing officers at the office closest to the taxpayer's residence, place of employment or school, or for a business taxpayer, the Appeals office closest to the taxpayer's principal place of business, have had prior involvement with the taxpayer, the taxpayer will not be offered a face-to-face conference at that location unless the taxpayer elects to waive the requirement of IRC 6330(b)(3). Instead, the taxpayer will be offered a face-to-face conference at another Appeals office if Appeals otherwise would have offered the taxpayer a face-to-face conference at the closer location. Appeals should try to offer the face-to-face conference at an Appeals office most convenient for the taxpayer. See Treas. Reg. 301.6330-1(d)(2).

Taxpayers may waive the "no prior involvement" restriction through use of Form 14041, Waiver Form for Right to Request A New Settlement/Appeals Officer under Section 6320 and/or 6330. Retain the Form 14041 with the administrative file. Securing of Form 14041 is also a mandatory documentation item.

Where a Form 12257 is secured or an abbreviated ACM is prepared, documentation of "no prior involvement" is only required in the Case Activity Record.

As long as there is no prior involvement, a taxpayer does not have a right to a hearing with a Settlement Officer, other than the one assigned. However, case transfer may be considered if requested by the taxpayer. See IRM 8.6.1.3.2.

A timely-filed request for a CDP hearing suspends the period of time permitted related to the following:

from the date of the receipt of the written CDP request until:

IDRS Transaction Code (TC) 520 with closing codes 76 or 77 systemically suspends the period of limitation and collection activity relating to collection after assessment.

It is critical that TC 520 cc 76 or 77 is input with the correct date for each CDP tax period. IRM 8.22.2.2.4.9 The subsection is entitled Timeliness Determinations. A TC 520 cc 76/77 must be corrected before the TC 521 is input.

Use the following table for determining the TC 520 cc 77 date.

CSED suspension information:

Within 5 workdays of receipt of the case, the hearing officer must review and document in their case activity record their verification of:

Immediately correct incorrect TC 520 dates and/or CSED codes P, B, S, using the following procedure:

The hearing officer must also document their CSED verification in the attachment to the Notice of Determination Letter.

The CSED is not suspended on the partnership if Collection only issues a CDP levy notice to, or files an NFTL in the name of, an individual partner and the individual partner requests a hearing.

Hearing officers must, during initial analysis, document their review in the case activity record whether the requirements of any applicable law or administrative procedure were met (the first of the "big three" ). The review of both the tax and penalty assessments is required regardless of whether:

Document the following:

Verify and document items in (1)a-d above from:

An identified irregularity may require further inquiry beyond the transcripts. There is no need to get into specifics like the dates that the requirements were accomplished unless the taxpayer raised some legal or procedural requirement issue.

In some cases, Forms 12153 are timely filed but need to be "perfected" because necessary information or a required signature is missing.

Collection has primary responsibility for perfecting a hearing request using IRS systems or by contacting the taxpayer.

If the taxpayer fails to provide the following information, the flaw in the hearing request may be cured if this information can be obtained from IRS systems or the taxpayer::

The taxpayer can "perfect" a hearing request that is both imperfect and invalid because it is missing the taxpayer's signature(s) or is signed by a POA without a valid Form 2848 on file. If the form is signed or Form 2848 is provided within the reasonable time frame Collection provides, the hearing request is perfected and made valid. If a valid signature is not provided to perfect the request, the hearing request is invalid and is non- processable. It should not be referred to Appeals.

An imperfect request may or may not be a non-processable request. It should not be returned as a Premature Referral unless it meets one of the six criteria in 8.22.2.2.2.1

If the taxpayer did not submit Form 12153, but it appears that the taxpayer is requesting a CDP hearing, then the taxpayer has met the requirement of submitting a statement that the taxpayer requests a CDP hearing.

Requirement for a timely hearing request

Use the IRS received date to verify if the request is timely:

Determining timeliness if the postmark, meter or fax transmission date is illegible, or the envelope is missing:

The letter transmitting the POA's copy of the CDP notice and the taxpayer's CDP Levy Notice should have the same issuance date. However, where the POA sends their copy of the CDP Levy Notice with the hearing request, verify that the POA's letter and the taxpayer's letter have the same issuance date. You can make this determination by viewing:

If the POA's letter does not match the date of the taxpayers, do not use the POA's letter to determine timeliness because the POA's letter is not issued following the requirements of IRC 6320(a)(2) and IRC 6330(a)(2), which are:

Separate Timeliness Determination: Appeals makes a separate timeliness determination on the following four (4) types of CDP or equivalent hearing requests:

ACS and RO's have been directed to fax the documents in (3) below to APS in the following offices where Collection Specialists have been assigned to work the CDPTD requests:

Collection will fax the following documents to APS in the above offices:

APS will card-in the case as TYPE = CDPTD in the OTHER/Miscellaneous category.

CDPTD requests will not receive a Uniform Acknowledgement Letter.

Collection Specialists will work and close CDPTD requests within five workdays of assignment, preparing Form 5402 with the appropriate closing code and paragraph.

Closing codes for CDPTD cases:

Select one (or both) of the following paragraphs appropriate to the CDPTD:

Procedures for CDPTD paperwork:

For CDP hearing requests that were untimely and the taxpayer did not request an equivalent hearing:

For CDP hearing requests that were timely received yet non-processable, and perfected late:

For EH requests (including untimely CDP requests treated as EH requests) that were untimely received:

For EH requests (including untimely CDP requests treated as EH requests) that were timely yet non-processable, but perfected after the reasonable time period for perfection specified by Collection:

Appeals employees will:

You do not need to review and/or consider information from the taxpayer that is received after the issuance of the Notice of Determination/Decision Letter and while the case is being held in suspense for potential court action.

If the case has been closed in Appeals, forward the information to the appropriate Collection function; if the case is still in suspense, place the information in the administrative file; if the case is docketed, forward the information to the assigned Area Counsel attorney.

Under state law, general partners in partnerships are liable for taxes assessed against the partnership. The Supreme Court in United States v. Galletti, 541 U.S. 114 (2004), held that the Service’s assessment against a partnership serves to make the general partner liable for the tax. While the Supreme Court in Galletti did not address administrative collection, Galletti is consistent with the Service’s long-standing legal position that it can enforce a tax lien and take administrative levy action against a general partner based on the assessment and notice and demand directed to the partnership. See Chief Counsel Notice 2005-003 at http://www.irs.gov/pub/irs-ccdm/cc-2005-003.pdf

The Service will give separate CDP levy or lien notices to all general partner(s) whose property the Service intends to levy or to the partners listed on the NFTL as being liable for a partnership’s employment taxes.

The hearing request is established on CDPTS under the partnership EIN.

The partner's individual CDP hearing request DOES NOT affect Collection's ability to collect from the partnership or other individual partners' assets. The partner's individual CDP hearing request DOES affect the Service's ability to levy a partner's individual assets to collect the partnership liability that is the subject of the CDP levy notice.

The AARS, during the screening process, or the hearing officer, during initial analysis, may determine that the taxpayers liability was resolved with one of the following:

The AARS or the hearing officer may solicit a withdrawal of a resolved case prior to issuance of the Substantive Contact Letter provided that the taxpayer has not disputed the liability.

If the taxpayer does not withdraw the CDP/EH hearing request the hearing officer will issue the Substantive Contact Letter within 30 days of receiving the case. IRM 8.22.2.2.6

If the AARS solicits a withdrawal, doesn't receive it AND keeps the case to work, the AARS must issue the SCL within 30 days of their assignment.

Examples of a resolved case where a pre-substantive contact is appropriate:

If there is no response to the substantive contact letter, you must make a second attempt to contact the taxpayer.

The case activity record must clearly document a minimum of 2 attempts.

Letter 4000, Last Chance Letter is the preferred method for your second attempt.

For the second attempt:

Document with a clear entry in the case activity record that you informed the taxpayer that if we do not timely receive the requested information, the hearing will consist of:

Recognize and be sensitive where there are indications the taxpayer:

The Multilingual Initiative (MLI) will identify individuals who are willing to assist other Appeals employees as interpreters. See http://mli.web.irs.gov/v3/contact_mli/ContactMLI.asp. Also, see IRM 22.31.1.

A minor child is able to serve as an interpreter for his/her parent during an Appeals conference, per guidance issued by Disclosure.

Recognize and be sensitive to taxpayers with issues that require:

Give special consideration to transferring the case to an Appeals office with the required industry or cultural knowledge even if the case does not qualify for a face-to-face hearing.

A CDP hearing may be:

Accommodate taxpayers who request AND qualify for a face-to-face hearing at an Appeals office near:

Transfer to the office requested by the taxpayer following established procedures.

Exceptions to a face-to-face hearing:

Give the taxpayer a reasonable opportunity (an additional 14 days) to demonstrate eligibility or become eligible after the taxpayer requests a face-to-face conference. Allow taxpayers to:

Confirm the eligibility deadline by letter. Following are examples of this provision:

There may be instances in which a taxpayer will need more than 14 days to prepare a delinquent return because he is unable to prepare the return himself.

Appeals may require a Collection Information Statement (CIS) as a condition to granting a face-to-face CDP conference if the sole purpose of the conference is to discuss a collection alternative which requires a CIS, except as discussed below. The purpose of requiring a collection information statement is to ensure that the conference will be productive in assisting the Settlement Officer in evaluating the collection alternative. A CIS is required for the following collection alternatives: Offers in compromise, other than doubt as to liability offers Partial payment installment agreements Non-streamlined installment agreements In-business trust fund installment agreements, except those meeting the “express” criteria.

If a CIS is necessary for a face-to-face hearing, request it from the taxpayer and allow a reasonable period of time (e.g., 14 days) for the taxpayer to submit it. If the CIS is missing information necessary for a productive conference, provide a reasonable opportunity (e.g., another 14 days) to supply missing data before denying the face-to-face conference. If the taxpayer asks for an extension of time to complete or correct the CIS, grant a reasonable request. If the taxpayer does not provide the information requested, notify them by phone or letter that the request for a face-to-face hearing is denied. Document the contact and schedule a telephone conference.

Grant a face-to-face request if the CIS is less than 12 months old as this meets the eligibility requirement. If during the course of handling the case, the CIS becomes more than 12 months old, you do not need an update of the information unless the taxpayer’s financial situation has significantly changed. A face-to-face conference may be conditioned on the submission of an updated CIS if the taxpayer's financial condition is known to have significantly changed since the date the CIS was prepared – for example, the taxpayer has become unemployed. Because the CIS need only be complete enough to permit a productive face-to-face CDP conference, the sufficiency of the CIS must be determined on a case-by-case basis.

Do not deny a face-to-face CDP request if the CIS is missing information that would not prevent a productive discussion with the taxpayer. For example, all income and asset information is generally necessary for a productive conference, but some expense items may not be necessary if the taxpayer prefers to use the Allowable Living Expense (ALE) standards for expenses. Do not condition a face-to-face conference on the production of supporting documents to the collection information statement.

Submission of a CIS is not an opportunity for Appeals to prejudge the viability of a collection alternative prior to the conference. A face-to-face conference cannot be denied because the CIS shows that the taxpayer is able to pay the tax in full or is not able to make the payments proposed.

Grant a face-to-face request if it is necessary to explain the requirements for becoming eligible for a collection alternative. Taxpayers may be better able to understand the requirements for becoming eligible for a collection alternative if they are able to meet with an Appeals employee face-to-face. Examples include a taxpayer with a hearing impairment, who speaks little or no English, or who lacks sophistication. Taxpayers may not be able to understand there is an obligation to file a return, may not be able to articulate why they believe they are not required to file a return or know how to go about preparing a return. It may be easier to meet face-to-face where the SO is able to look at the taxpayer's financial records. Under these or similar circumstances, grant a face-to-face conference.