The Form 12153 is a request for Collection Due Process or Equivalency Hearing. If the appeal (Form 12153) is filed within 30-days, it is a timely Collection Due Process (CDP) Hearing. A CDP will protect the specific tax periods from any further collection action until the taxpayer has the opportunity to be heard. It also preserves the taxpayer’s right to file a petition in Tax Court. However, a timely filed Collection Due Process request will toll the collection statute expiration date (CSED). The CSED is generally a 10 year period from the date of assessment in which the IRS can collect on a tax liability. However, filing a Collection Due Process request will extend this 10-year period.
However, if the request for a hearing is filed on the 31st day, or any time up to one year, the request for an appeal becomes an Equivalency hearing. The taxpayer’s case will still be forwarded to appeals and the taxpayer can request collection alternatives. However, the taxpayer’s account is not necessarily protected from further collection action while they wait for their hearing.
Once the request for an Equivalency is filed and transferred to the IRS Appeals Office, the IRS Settlement Officer will send a letter to the taxpayer which informs the taxpayer about the appeals process and provide the taxpayer with the name and contact information of the person in Appeals that has been assigned to the case. Thereafter, usually within 30-days, the IRS Settlement Officer will send a letter to the taxpayer scheduling the hearing and requesting documentation prior to the hearing date.
Assuming there are no compliance issues, and the financial documentation was provided to the IRS prior the hearing date, the hearing can be conducted rather quickly. The IRS will verify the taxpayer’s compliance, verify whether there were any procedural issues, and whether the IRS will accept taxpayer’s proposal on a resolution. If the parties agree to a resolution, the Settlement Officer will provide the necessary paperwork to the taxpayer.
If the taxpayer cannot resolve his account with IRS Appeals, the taxpayer does not have the right to appeal in Tax Court. His or her case will be transferred back to IRS Collections. However, filing an Equivalency hearing does not extend the 10 year time frame that the IRS can collect on the outstanding tax liability.