[Federal Register Volume 71, Number 200 (Tuesday, October 17, 2006)]
[Rules and Regulations]
[Pages 60835-60843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-17140]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[TD 9290]
RIN 1545-BB96


Miscellaneous Changes to Collection Due Process Procedures 
Relating to Notice and Opportunity for Hearing Upon Filing of Notice of 
Federal Tax Lien

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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SUMMARY: This document contains final regulations amending the 
regulations relating to a taxpayer's right to a hearing under section 
6320 of the Internal Revenue Code of 1986 after the filing of a notice 
of Federal tax lien (NFTL). The final regulations make certain 
clarifying changes in the way collection due process (CDP) hearings are 
held and specify the period during which a taxpayer may request an 
equivalent hearing. The final regulations affect taxpayers against 
whose property or rights to property the Internal Revenue Service (IRS) 
files a NFTL.

DATES: Effective Date: These regulations are effective on November 16, 
2006.
    Applicability Date: These regulations apply to requests for CDP or 
equivalent hearings on or after November 16, 2006.

FOR FURTHER INFORMATION CONTACT: Laurence K. Williams, 202-622-3600 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    This document contains amendments to the Regulations on Procedure 
and Administration (26 CFR part 301) relating to the provision of 
notice under section 6320 of the Internal Revenue Code to taxpayers of 
a right to a CDP hearing (CDP Notice) after the IRS files a NFTL. Final 
regulations (TD 8979) were published on January 18, 2002, in the 
Federal Register (67 FR 2558) (the 2002 final regulations). The 2002 
final regulations implemented certain changes made by section 3401 of 
the Internal Revenue Service Restructuring and Reform Act of 1998 (Pub. 
L. 105-206, 112 Stat. 685)(RRA 1998), including the addition of section 
6320 to the Internal Revenue Code.
    Section 3401 of RRA 1998 also added section 6330 to the Internal 
Revenue Code. That statute provides for notice to taxpayers of a right 
to a hearing before or, in limited cases, after levy. A number of the 
provisions in section 6330 concerning the conduct and judicial review 
of a CDP hearing are incorporated by reference in section 6320. On 
January 18, 2002, final regulations (TD 8980) under section 6330 were 
published in the Federal Register (67 FR 2549) along with the 2002 
final regulations under section 6320.
    On September 16, 2005, the IRS and the Treasury Department 
published in the Federal Register (70 FR 54681) a notice of proposed 
rulemaking and notice of public hearing (REG-150088-02). The IRS 
received one set of written comments responding to the notice of 
proposed rulemaking. Because no one requested to speak at the public 
hearing, the hearing was cancelled. After considering each of the 
comments, the proposed regulations are adopted as amended by this 
Treasury decision.
    On August 17, 2006, the Pension Protection Act of 2006, Public Law 
109-280, 120 Stat. 780 (the PPA), was enacted. Section 855 of the PPA 
amended section 6330(d) of the Internal Revenue Code to withdraw 
judicial review of CDP notices of determination from United States 
district court jurisdiction, leaving review solely in the United States 
Tax Court. Section 6330(d) is made applicable to section 6320 hearings 
by section 6320(c). The amendment to section 6330(d), effective for 
notices of determination issued on or after October 17, 2006, requires 
the removal of references to district court review in the 2002 final 
regulations. This Treasury decision removes those references.
    The IRS and the Treasury Department have determined that a notice 
of proposed rulemaking and solicitation of public comments are not 
required to amend the regulations to implement the modification to 
section 6330(d). These amendments are made solely to conform the 
regulations to a statutory change enacted by Congress. Because the 
amendments do not involve any exercise of discretion or interpretation,

[[Page 60836]]

the notice and public comment procedures are unnecessary.
    The comments and changes to the proposed regulations, and the 
amendments required by the Congressional modification to section 
6330(d), are discussed below.

Summary of Comments and Explanation of Changes

    The comments suggested that the IRS be required to contact 
taxpayers who timely file an incomplete request for CDP hearing to give 
them the opportunity to perfect the request within a reasonable time 
period and further recommended that such contact be in writing and 
identify the infirmity requiring perfection. The comments also 
recommended that the final regulations establish a specific time period 
during which taxpayers may, by right, amend or perfect their 
previously-filed yet incomplete CDP hearing request. The request, 
according to the comments, should be considered timely if it is 
perfected within the applicable time period.
    Currently, the practice of the IRS is to contact taxpayers whose 
hearing requests fail to satisfy the requirements specified by the 
existing regulations and ask these taxpayers to perfect their requests 
within a specified period of time. The IRS considers requests perfected 
within the time specified to be timely. The intention of the IRS and 
the Treasury Department is to incorporate this administrative procedure 
into the proposed regulations. The final regulations more clearly state 
that the IRS will make a reasonable attempt to contact taxpayers to 
give them a reasonable period of time to perfect incomplete requests. 
However, the timeframe in which to respond to the request, and the 
method of delivery of the request (i.e., orally or in writing) are more 
appropriately addressed in the Internal Revenue Manual. The final 
regulations make clear that requests perfected within the time period 
specified by the IRS will be considered timely.
    The final regulations do not adopt the suggestion to establish a 
period of time during which a taxpayer is allowed to perfect an 
incomplete request, without regard to a perfection request from the 
IRS. The IRS and Treasury Department believe that the procedure 
incorporated into the final regulations is sufficient to permit 
taxpayers to ensure their requests are complete.
    The comments recommended that the IRS Office of Appeals (Appeals) 
be given the discretion to permit a taxpayer to amend an imperfect 
hearing request after the period for perfecting the request has 
expired, if the taxpayer can demonstrate that such amendment furthers 
an alternative to collection. This change to the regulations is 
unnecessary because Appeals is already empowered to exercise this 
discretion. Neither the current regulations nor the proposed amendments 
limits Appeals from exercising this discretion. Accordingly, the final 
regulations do not adopt this recommendation. Further clarification, 
however, will be provided in the Internal Revenue Manual.
    The comments suggested that where a taxpayer fails to perfect a CDP 
hearing request until after the time period specified by the IRS, the 
perfected request should be automatically treated as a request for an 
equivalent hearing. Treating untimely perfected requests as equivalent 
hearing requests may unduly prolong the process in cases in which a 
taxpayer does not want an equivalent hearing. Accordingly, the final 
regulations do not adopt this suggestion. The final regulations, 
however, provide that Appeals will determine the timeliness of CDP 
hearing requests. The final regulations also add to the proposed 
regulations that taxpayers making an untimely request will be provided 
the opportunity to have the request for CDP hearing treated as a 
request for equivalent hearing, without submitting an additional 
request.
    The comments requested that the final regulations give taxpayers 
whose hearing requests might be construed as making a frivolous 
argument the right to amend their hearing requests to raise relevant, 
non-frivolous issues. The comments further recommended that all 
taxpayers be given the right to supplement the hearing request prior to 
the conference conducted by Appeals.
    These comments indicate concern that taxpayers may be unable to 
articulate reasons for disagreeing with the collection action that are 
satisfactory to Appeals. The reasons for disagreeing with the 
collection action need not be detailed. To assist taxpayers in 
articulating reasons, the IRS is revising Form 12153, ``Request for a 
Collection Due Process Hearing,'' to add examples of the most common 
reasons taxpayers give for requesting a hearing, including requests for 
collection alternatives. In any event, the informal nature of the CDP 
hearing permits taxpayers and Appeals to discuss collection 
alternatives and issues not listed in the hearing request if such 
discussion will help resolve the case. Accordingly, the final 
regulations do not adopt these recommendations.
    The comments urged that the final regulations guarantee a face-to-
face conference for each taxpayer who presents a relevant, non-
frivolous reason for disagreement with the collection action. If this 
recommendation is not adopted, the comments suggest that the 
regulations address and provide examples of when a face-to-face 
conference will not be granted. The final regulations do not adopt the 
recommendation to guarantee a face-to-face conference for each taxpayer 
raising a relevant, non-frivolous issue. The IRS and the Treasury 
Department agree with the comments that a face-to-face conference can 
be a useful forum for resolving a taxpayer's issues. The final 
regulations recognize the importance of a face-to-face meeting by 
providing that taxpayers will ordinarily be offered an opportunity for 
a face-to-face conference. There will be instances, however, when a 
face-to-face conference is not practical. The final regulations 
identify typical situations in which a face-to-face conference will be 
neither necessary nor productive. Except for these situations, the IRS 
and the Treasury Department anticipate that Appeals will afford a face-
to-face meeting to taxpayers who request one. Nonetheless, 
unanticipated circumstances may arise in which granting a face-to-face 
conference will not be appropriate. The final regulations give Appeals 
the flexibility needed to respond to unanticipated circumstances.
    Adoption of the comment requesting guidance on when a face-to-face 
conference will not be granted is unnecessary. The final regulations 
retain descriptions of situations in which a face-to-face conference 
will not be granted, as illustrated in the proposed regulations. 
Further guidance on granting face-to-face conferences will be provided 
in the Internal Revenue Manual.
    The comments suggested that a taxpayer who appears to be presenting 
only frivolous reasons be given an opportunity to provide relevant, 
non-frivolous reasons in order to obtain a face-to-face conference. 
Adoption of this recommendation is unnecessary. Correspondence sent by 
Appeals to taxpayers who make only frivolous arguments invites them to 
submit relevant, non-frivolous reasons. Appeals offers face-to-face 
conferences to taxpayers who respond by providing such reasons.
    The comments also suggested that the regulations define relevant 
and frivolous. The IRS and the Treasury Department believe that any 
attempt to define these terms is unnecessary and could result in 
underinclusive definitions. For example, the comments suggest that a 
frivolous issue be defined as an issue that is the same or

[[Page 60837]]

substantially similar to an issue identified as frivolous by the IRS in 
published guidance. It is not possible to anticipate or keep pace with 
the evolution of frivolous arguments through published guidance. 
Instead, taxpayers are advised to consult the lists of examples of 
frivolous arguments in IRS Publication 2105, ``Why Do I Have to Pay 
Taxes'' and on the IRS Web site in a document entitled ``The Truth 
about Frivolous Tax Arguments.'' The names and web addresses of these 
documents, and a toll-free number to order Publication 2105, will be 
added to the instructions to Form 12153 to help taxpayers avoid making 
these arguments.
    The comments recommended clarification of the proposed rule that a 
face-to-face conference concerning a collection alternative will not be 
granted unless the alternative would be available to other taxpayers in 
similar circumstances. According to the comments, a taxpayer should not 
be denied a face-to-face conference because the requested collection 
alternative cannot be accepted, for example, because it appears from 
financial information that the taxpayer can pay the liabilities in 
full. This proposed rule was not intended to deny a face-to-face 
conference because the requested collection alternative would not be 
accepted. The intention of this rule is to permit the denial of a face-
to-face conference to discuss a collection alternative for which the 
taxpayer is not eligible. A lack of eligibility under IRS policy is 
tied to a taxpayer's compliance with the Federal tax laws, not to the 
taxpayer's financial circumstances or ability to request the most 
appropriate alternative. For example, if the taxpayer has not filed all 
required tax returns, the taxpayer is not eligible for an offer to 
compromise or an installment agreement.
    In response to the concerns expressed in the comments, the final 
regulations amplify the rule that a face-to-face conference to discuss 
a collection alternative will not be granted unless other taxpayers 
would be eligible for the alternative in similar circumstances. The 
final regulations provide in A-D8 that Appeals in its discretion may 
grant a face-to-face conference if Appeals determines that a face-to-
face conference is appropriate to explain to the taxpayer the 
requirements for becoming eligible for a collection alternative. The 
final regulations also provide that taxpayers will be given an 
opportunity to demonstrate they are eligible for a collection 
alternative in order to obtain a face-to-face conference to discuss the 
alternative. Taxpayers will also be given an opportunity to become 
eligible for a collection alternative in order to obtain a face-to-face 
conference. For example, under the final regulations, if a taxpayer 
appears to have failed to file all required returns (and thus appears 
not to be eligible for an offer to compromise or an installment 
agreement), the taxpayer will be given an opportunity to demonstrate 
the inapplicability of the filing requirements or to file delinquent 
returns, in order to obtain a face-to-face conference. The final 
regulations further provide that a taxpayer's eligibility for a 
collection alternative does not include the taxpayer's ability to pay 
the unpaid tax.
    The comments expressed concern that the amendment providing a face-
to-face conference at an Appeals office other than an office in which 
all officers or employees had prior involvement could be construed as 
giving Appeals the discretion to deny a face-to-face conference even if 
the taxpayer would have been granted a face-to-face conference at the 
original location. The relevant sentence in A-D8 in the final 
regulations has been rewritten to make clear that Appeals does not have 
discretion to deny a face-to-face conference at an alternate location 
if the taxpayer would have been granted a face-to-face conference but 
for the disqualification of the Appeals employees at the original 
location.
    The comments suggested that the regulations permit face-to-face 
conferences to be held not only at the Appeals office closest to the 
taxpayer's residence or, for a business taxpayer, the taxpayer's 
principal place of business, but also at the Appeals office closest to 
the taxpayer's school or place of employment, the authorized 
representative's place of business, or some other location convenient 
to the taxpayer or the taxpayer's representative. The IRS and Treasury 
Department believe the rules for CDP hearings should be consistent with 
the treatment of other proceedings in Appeals. The longstanding 
practice of Appeals in cases not docketed in the Tax Court is to grant 
face-to-face conferences in the Appeals office closest to the 
taxpayer's residence or principal place of business. The practice is 
retained in the final regulations. Appeals will, however, attempt to 
accommodate reasonable requests to hold the face-to-face conference at 
an Appeals office more convenient to the taxpayer.
    The comments expressed concern that the definition of prior 
involvement under section 6320(b)(3) or 6330(b)(3) in the proposed 
regulations could be construed too narrowly in two ways. First, the 
definition of prior involvement as involvement in a prior hearing or 
proceeding could be read to exclude involvement in some informal 
settings, e.g., the Appeals officer's participation in a mediation 
session. In order to clarify that no such limitation is intended, the 
final regulations substitute matter for hearing or proceeding in A-D4 
of paragraph (d)(2). Second, defining prior involvement to exist when 
the Appeals officer previously considered the same tax liability could 
be construed as excluding from the definition instances in which the 
Appeals officer previously considered questions bearing only on 
collection issues. The final regulations adopt the suggestion in the 
comments to remove the word liability in A-D4 in order to eliminate the 
potential interpretation that there is a distinction between liability 
and collection issues in determining prior involvement.
    The comments also requested that a mediation example be added to 
paragraph (d)(3). The IRS and the Treasury Department believe that the 
change made to A-D4 adequately clarifies the definition of prior 
involvement. This example and others will be added to the Internal 
Revenue Manual to ensure the proper administration of sections 
6320(b)(3) and 6330(b)(3).
    The comments recommended that the regulations address the treatment 
of ex parte communications during CDP hearings. The rules applicable to 
ex parte communications during CDP hearings and other Appeals 
proceedings are provided in Rev. Proc. 2000-43, 2000-43 I.R.B. 404. 
Therefore, these rules are not duplicated in the regulations under 
sections 6320 and 6330.
    The comments recommended that the regulations be amended to provide 
that self-reported tax liabilities may be disputed in a CDP hearing. 
The final regulations adopt this recommendation. See also Montgomery v. 
Commissioner, 122 T.C. 1 (2004), acq. 2005-51 I.R.B. 1152.
    The comments also requested changes in the existing regulations' 
interpretation of preclusive events under section 6330(c)(2)(B). Under 
section 6330(c)(2)(B), during a CDP hearing, a taxpayer may challenge 
the existence or amount of the underlying tax liability for any tax 
period if the person did not receive any statutory notice of deficiency 
for such tax liability or did not otherwise have an opportunity to 
dispute such tax liability. Section 6330(c)(2)(B) is made applicable to 
section 6320 hearings by section

[[Page 60838]]

6320(c). According to the comments, the only opportunity to dispute the 
tax liability that is sufficient to prevent the taxpayer from 
challenging the liability in a CDP hearing is the prior opportunity to 
dispute the liability in a judicial forum. The IRS and the Treasury 
Department believe that the existing regulations correctly include an 
opportunity for an Appeals conference as a preclusive prior 
opportunity. The text of section 6330(c)(2)(B) does not contain 
language limiting prior opportunities to judicial proceedings. 
Moreover, it is consistent for a taxpayer who has had an opportunity to 
obtain a determination of liability by Appeals in one administrative 
hearing to be precluded from obtaining an Appeals determination in a 
subsequent CDP administrative hearing with respect to the same 
liability. This interpretation of section 6330(c)(2)(B) has been upheld 
by the courts. See, e.g., Pelliccio v. United States, 253 F. Supp. 2d 
258, 261-62 (D. Conn. 2003). Accordingly, the final regulations do not 
adopt this suggestion.
    Alternatively, the comments also recommended that the regulations 
specify that a pre-CDP Appeals conference is not a prior opportunity to 
dispute liability under section 6330(c)(2)(B) if the receipt of the 
conference was conditioned upon the taxpayer's agreement to extend the 
assessment statute of limitations with respect to the liability and the 
taxpayer declined to extend the statute. The IRS and Treasury 
Department believe this addition is unnecessary. For taxes subject to 
deficiency procedures, the relevant, pre-assessment ``prior 
opportunity'' is the receipt of the notice of deficiency. The offer of 
an Appeals conference prior to receipt of the notice of deficiency does 
not constitute an opportunity to dispute liability under section 
6330(c)(2)(B). This interpretation of section 6330(c)(2)(B) has been 
added to paragraph (e)(3) A-E2 to remove any uncertainty about this 
matter. For liabilities not subject to deficiency procedures, the offer 
of an Appeals conference prior to assessment constitutes an opportunity 
to dispute the liability under section 6330(c)(2)(B). Appeals 
conferences to consider these types of liabilities are rarely 
conditioned upon an extension of the assessment statute of limitations. 
The IRS generally makes conditional offers of a conference only when a 
taxpayer makes an untimely request for review of a proposed Trust Fund 
Recovery Penalty pursuant to a Letter 1153 and less than one year 
remains on the assessment statute of limitations. In this circumstance, 
however, the opportunity for an Appeals conference offered in the 
Letter 1153 constitutes the opportunity to dispute the liability under 
section 6330(c)(2)(B). The conditional offer made after the expiration 
of the prior opportunity provided in the Letter 1153 is irrelevant. For 
these reasons, the final regulations do not adopt this comment.
    The comments objected to the addition of a definition of 
administrative record to the regulations as an attempt to overrule the 
Tax Court's decision in Robinette v. Commissioner, 123 T.C. 85 (2004), 
rev'd, 439 F.3d 455 (8th Cir. 2006). The assumption that Robinette 
eliminated any role for an administrative record in CDP court 
proceedings is not supported by the Court's opinion. While the Tax 
Court held in Robinette that it was not required to limit its abuse-of-
discretion review to the administrative record, it did not reject the 
utility of an administrative record. Subsequent to the submission of 
the comments, the United States Court of Appeals for the Eighth Circuit 
reversed the Tax Court and held that abuse-of-discretion review in CDP 
cases is limited to the administrative record. Robinette v. 
Commissioner, 439 F.3d 455 (8th Cir. 2006). For these reasons, it is 
important that taxpayers and the IRS have a common understanding of the 
scope of the administrative record. The definition is retained in the 
final regulations.
    The comments suggested that the proposed definition of the 
administrative record permits Appeals officers and employees to exclude 
from the record for judicial review issues, arguments, and evidence 
presented orally by the taxpayer, and to exclude written communications 
and documents. The administrative record definition is not intended to 
suggest that the reviewing court is not permitted to determine the 
contents of the administrative record or the record's adequacy in an 
individual case. The reviewing court has the authority to receive 
evidence concerning what happened during the CDP hearing. The 
definition is provided to establish for the benefit of the IRS and 
taxpayers a baseline description of what each administrative record 
should contain to ensure a record sufficient for judicial review. The 
final regulations have not been changed in this regard. The final 
regulations, however, adopt the suggestion that the description of the 
case file in A-D7 and in the definition of administrative record in A-
F6 of the proposed regulations (redesignated as A-F4 in the final 
regulations) be made consistent.
    The comments recommended that the final regulations require each 
Appeals officer to include in the notice of determination a list of the 
documents the Appeals officer believes are included in the 
administrative record. The justification for this proposed requirement 
is that the list would assist the taxpayer in deciding whether to seek 
judicial review. The list of documents, according to the comments, will 
also assist the court and taxpayers seeking review to more efficiently 
ascertain whether there was an abuse of discretion.
    The final regulations do not adopt this recommendation. Requiring 
Appeals officers to prepare a list of documents constituting the 
administrative record in each of the thousands of cases handled each 
year would impose a heavy burden on Appeals without a commensurate 
benefit to taxpayers. The notice of determination issued in each case 
describes the facts and reasons supporting the Appeals officer's 
determination and should provide an adequate basis for the taxpayer's 
decision whether to seek judicial review.
    The IRS and the Treasury Department acknowledge that disputes have 
arisen with respect to the contents of the administrative record in CDP 
cases and that there are no special rules in place to resolve these 
disputes. An appropriate solution could involve the Tax Court's 
development of rules governing the preparation and submission of the 
administrative record for abuse-of-discretion review, particularly now 
that the recently-enacted Pension Protection Act of 2006 requires all 
CDP cases to be litigated in the Tax Court.
    The comments suggested removal of the limitation in the existing 
regulations that a taxpayer is precluded from obtaining judicial review 
of an issue not raised with Appeals during the CDP hearing. As an 
alternative, the comments recommended that a taxpayer only be prevented 
from raising those issues the taxpayer could have, but failed to raise 
during the CDP hearing. The limitation in the existing regulations 
implements a basic principle of administrative law that those seeking 
review of an issue must first give the agency the opportunity to 
evaluate and respond to the issue. This limitation has been upheld in 
the courts. See Robinette v. Commissioner, 123 T.C. 85, 101-102 (2004), 
rev'd on other grounds, 439 F.3d 455 (8th Cir. 2006); Magana v. 
Commissioner, 118 T.C. 488, 493 (2002); Abu-Awad v. United States, 294 
F. Supp.2d 879, 889 (S.D. Tex. 2003). Accordingly, the final

[[Page 60839]]

regulations do not adopt either of these recommendations.
    The comments recommended that if the limitation on the taxpayer's 
ability to raise new issues during judicial review is retained, then 
the amendment to A-F5 (redesignated as A-F3 in the final regulations) 
should clarify that a taxpayer need not provide the evidence specified 
by Appeals with respect to an issue in order to present ``any 
evidence'' necessary to properly raise the issue. The IRS and the 
Treasury Department believe this change is unnecessary. The revision to 
A-F5 (redesignated as A-F3) does not suggest that the ``any evidence'' 
needed to avoid preclusion must be the evidence specified by Appeals. 
The revised language simply requires that the taxpayer submit some 
evidentiary support. This suggestion is not adopted in the final 
regulations.
    The comments also suggested adding that a taxpayer need not provide 
any evidence to avoid preclusion if the case file already contains 
evidence with respect to that issue. This addition is not necessary. If 
the case file contains all the information needed for a decision on an 
issue, an Appeals officer will not request any additional evidence and 
the revised language in A-F5 (redesignated as A-F3 in the final 
regulations) will not apply. In the unlikely event that an Appeals 
officer making a determination on an issue requested information 
already in the file, a reviewing court should find the taxpayer's 
failure to provide any evidence does not prevent the issue from being 
raised. The final regulations do not adopt this recommendation.
    The comments urged that the regulations make clear that the 
authority of Appeals officers to determine the validity, sufficiency 
and timeliness of a CDP notice does not alter or limit the authority of 
the reviewing court to make the same determination. The IRS and the 
Treasury Department believe this clarification is unnecessary. It is 
well-settled that reviewing courts have the authority to determine the 
validity, sufficiency and timeliness of a CDP notice. See, e.g., 
Kennedy v. Commissioner, 116 T.C. 255 (2001). This clarification is not 
adopted in the final regulations.
    The comments recommended that administrative rules similar to those 
developed under section 6015 be added to the regulations. The 
regulations state that a spousal defense raised under section 66 or 
6015 is governed by section 66 or 6015 and the regulations and 
procedures thereunder. See Treas. Reg. Sec.  301.6320-1(e)(2). To the 
extent it is determined that further guidance is necessary, such 
guidance will be in the form of additions to the Internal Revenue 
Manual. The final regulations do not adopt this recommendation.
    The final regulations include amendments to the existing 
regulations to remove references to judicial review by United States 
district courts. The Pension Protection Act of 2006, Public Law 109-
280, 120 Stat. 780, section 855 amended section 6330(d) to eliminate 
the jurisdiction of the district courts to review notices of 
determination, leaving the Tax Court with sole jurisdiction. Section 
6330(d) is made applicable to section 6320 hearings by section 6320(c). 
To make clear in the regulations that judicial review is available only 
in the Tax Court, Q&A-F3 and Q&A-F4 in the existing regulations are 
removed by the final regulations and Q&A-F5 and Q&A-F6 in the proposed 
regulations are redesignated as Q&A-F3 and Q&A-F4 in the final 
regulations. In addition, only the Tax Court is now mentioned in A-E11, 
paragraph (f)(1), A-F1, redesignated Q&A-F3 and Q&A-F4, Example 1 of 
paragraph (g)(3), Q&A-H2 and redesignated Q-I6.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 12866. 
Therefore, a regulatory assessment is not required. It also has been 
determined that section 553(b) of the Administrative Procedure Act (5 
U.S.C. chapter 5) does not apply to these regulations. In particular, 
the IRS and the Treasury Department find for good cause that a notice 
of proposed rulemaking and solicitation of public comments are 
unnecessary to amend the existing regulations to implement the 
modification of section 6330(d) by the Pension Protection Act of 2006, 
Public Law 109-280, 120 Stat. 780. These amendments are made solely to 
conform the regulations to the statutory change enacted by Congress. 
The amendments do not involve any exercise of discretion or 
interpretation by the IRS or Treasury Department and the removal of 
United States district court jurisdiction would become effective even 
if the amendments were not made. Accordingly, the notice and public 
comment procedures do not apply. Because the regulations do not impose 
a collection of information on small entities, the Regulatory 
Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to 
section 7805(f) of the Internal Revenue Code, the proposed regulations 
were submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on its impact on small business.

Drafting Information

    The principal author of these regulations is Laurence K. Williams, 
Office of Associate Chief Counsel, Procedure and Administration 
(Collection, Bankruptcy and Summonses Division).

List of Subjects in 26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

0
Accordingly, 26 CFR part 301 is amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

0
Paragraph 1. The authority citation for part 301 continues to read, in 
part, as follows:

    Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Section 301.6320-1 is amended as follows:
0
1. Paragraph (c)(2) A-C1, Q&A-C6 and A-C7 are revised.
0
2. Paragraph (d)(2) A-D4 and A-D7 are revised.
0
3. Paragraph (d)(2) Q&A-D8 is added.
0
4. Paragraph (d)(3) is added.
0
5. Paragraph (e)(1) is revised.

0
6. Paragraph (e)(3) A-E2, A-E6, A-E7 and A-E11 are revised.
0
7. Paragraph (f)(1) is revised.
0
8. Paragraph (f)(2) A-F1 is revised.
0
9. Paragraph (f)(2) Q&A-F3 is removed.
0
10. Paragraph (f)(2) Q&A-F5 is revised and redesignated Q&A-F3.
0
11. Paragraph (f)(2) Q&A-F4 is revised.
0
12. Paragraph (g)(3) Example 1 is revised.
0
13. Paragraph (h)(2) Q&A-H2 is revised.
0
14. Paragraph (i)(2) Q-I5 is redesignated Q-I6 and revised.
0
15. Paragraph (i)(2) A-I5 is redesignated A-I6.
0
16. Paragraph (i)(2) Q&A-I1 through Q&A-I4 are redesignated Q&A-I2 
through Q&A-I5.
0
17. Paragraph (i)(2) Q&A-I1 and Q&A-I7 through Q&A-I11 are added.
0
18. Paragraph (j) is revised.


Sec.  301.6320-1  Notice and opportunity for hearing upon filing of 
notice of Federal tax lien.

* * * * *
    (c) * * *
    (2) * * *
    A-C1. (i) The taxpayer must make a request in writing for a CDP 
hearing. The request for a CDP hearing shall

[[Page 60840]]

include the information and signature specified in A-C1(ii) of this 
paragraph (c)(2). See A-D7 and A-D8 of paragraph (d)(2).
    (ii) The written request for a CDP hearing must be dated and must 
include the following:
    (A) The taxpayer's name, address, daytime telephone number (if 
any), and taxpayer identification number (e.g., SSN, ITIN or EIN).
    (B) The type of tax involved.
    (C) The tax period at issue.
    (D) A statement that the taxpayer requests a hearing with Appeals 
concerning the filing of the NFTL.
    (E) The reason or reasons why the taxpayer disagrees with the 
filing of the NFTL.
    (F) The signature of the taxpayer or the taxpayer's authorized 
representative.
    (iii) If the IRS receives a timely written request for CDP hearing 
that does not satisfy the requirements set forth in A-C1(ii) of this 
paragraph (c)(2), the IRS will make a reasonable attempt to contact the 
taxpayer and request that the taxpayer comply with the unsatisfied 
requirements. The taxpayer must perfect any timely written request for 
a CDP hearing that does not satisfy the requirements set forth in A-
C1(ii) of this paragraph (c)(2) within a reasonable period of time 
after a request from the IRS.
    (iv) Taxpayers are encouraged to use Form 12153, ``Request for a 
Collection Due Process Hearing,'' in requesting a CDP hearing so that 
the request can be readily identified and forwarded to Appeals. 
Taxpayers may obtain a copy of Form 12153 by contacting the IRS office 
that issued the CDP Notice, by downloading a copy from the IRS Internet 
site, http://www.irs.gov/pub/irs-pdf/f12153.pdf, or by calling, 
toll-free, 1-800-829-3676.
    (v) The taxpayer must affirm any timely written request for a CDP 
hearing which is signed or alleged to have been signed on the 
taxpayer's behalf by the taxpayer's spouse or other unauthorized 
representative by filing, within a reasonable period of time after a 
request from the IRS, a signed, written affirmation that the request 
was originally submitted on the taxpayer's behalf. If the affirmation 
is filed within a reasonable period of time after a request, the timely 
CDP hearing request will be considered timely with respect to the non-
signing taxpayer. If the affirmation is not filed within a reasonable 
period of time after a request, the CDP hearing request will be denied 
with respect to the non-signing taxpayer.
* * * * *
    Q-C6. Where must the written request for a CDP hearing be sent?
    A-C6. The written request for a CDP hearing must be sent, or hand 
delivered (if permitted), to the IRS office and address as directed on 
the CDP Notice. If the address of that office does not appear on the 
CDP Notice, the taxpayer should obtain the address of the office to 
which the written request should be sent or hand delivered by calling, 
toll-free, 1-800-829-1040 and providing the taxpayer's identification 
number (e.g., SSN, ITIN or EIN).
* * * * *
    A-C7. If the taxpayer does not request a CDP hearing in writing 
within the 30-day period that commences on the day after the end of the 
five-business-day notification period, the taxpayer foregoes the right 
to a CDP hearing under section 6320 with respect to the unpaid tax and 
tax periods shown on the CDP Notice. A written request submitted within 
the 30-day period that does not satisfy the requirements set forth in 
A-C1(ii)(A), (B), (C), (D) or (F) of this paragraph (c)(2) is 
considered timely if the request is perfected within a reasonable 
period of time pursuant to A-C1(iii) of this paragraph (c)(2). If the 
request for CDP hearing is untimely, either because the request was not 
submitted within the 30-day period or not perfected within the 
reasonable period provided, the taxpayer will be notified of the 
untimeliness of the request and offered an equivalent hearing. In such 
cases, the taxpayer may obtain an equivalent hearing without submitting 
an additional request. See paragraph (i) of this section.
* * * * *
    (d) * * *
    (2) * * *
    A-D4. Prior involvement by an Appeals officer or employee includes 
participation or involvement in a matter (other than a CDP hearing held 
under either section 6320 or section 6330) that the taxpayer may have 
had with respect to the tax and tax period shown on the CDP Notice. 
Prior involvement exists only when the taxpayer, the tax and the tax 
period at issue in the CDP hearing also were at issue in the prior non-
CDP matter, and the Appeals officer or employee actually participated 
in the prior matter.
* * * * *
    A-D7. Except as provided in A-D8 of this paragraph (d)(2), a 
taxpayer who presents in the CDP hearing request relevant, non-
frivolous reasons for disagreement with the NFTL filing will ordinarily 
be offered an opportunity for a face-to-face conference at the Appeals 
office closest to taxpayer's residence. A business taxpayer will 
ordinarily be offered an opportunity for a face-to-face conference at 
the Appeals office closest to the taxpayer's principal place of 
business. If that is not satisfactory to the taxpayer, the taxpayer 
will be given an opportunity for a hearing by telephone or by 
correspondence. In all cases, the Appeals officer or employee will 
review the case file, as described in A-F4 of paragraph (f)(2). If no 
face-to-face or telephonic conference is held, or other oral 
communication takes place, review of the documents in the case file, as 
described in A-F4 of paragraph (f)(2), will constitute the CDP hearing 
for purposes of section 6320(b).
    Q-D8. In what circumstances will a face-to-face CDP conference not 
be granted?
    A-D8. A taxpayer is not entitled to a face-to-face CDP conference 
at a location other than as provided in A-D7 of this paragraph (d)(2) 
and this A-D8. If all Appeals officers or employees at the location 
provided for in A-D7 of this paragraph (d)(2) have had prior 
involvement with the taxpayer as provided in A-D4 of this paragraph 
(d)(2), the taxpayer will not be offered a face-to-face conference at 
that location, unless the taxpayer elects to waive the requirement of 
section 6320(b)(3). The taxpayer will be offered a face-to-face 
conference at another Appeals office if Appeals would have offered the 
taxpayer a face-to-face conference at the location provided in A-D7 of 
this paragraph (d)(2), but for the disqualification of all Appeals 
officers or employees at that location. A face-to-face CDP conference 
concerning a taxpayer's underlying liability will not be granted if the 
request for a hearing or other taxpayer communication indicates that 
the taxpayer wishes only to raise irrelevant or frivolous issues 
concerning that liability. A face-to-face CDP conference concerning a 
collection alternative, such as an installment agreement or an offer to 
compromise liability, will not be granted unless other taxpayers would 
be eligible for the alternative in similar circumstances. For example, 
because the IRS does not consider offers to compromise from taxpayers 
who have not filed required returns or have not made certain required 
deposits of tax, as set forth in Form 656, ``Offer in Compromise,'' no 
face-to-face conference will be granted to a taxpayer who wishes to 
make an offer to compromise but has not fulfilled those obligations. 
Appeals in its discretion, however, may grant a face-to-face conference 
if Appeals determines that a face-to-face conference is appropriate to 
explain to the taxpayer the requirements for becoming eligible

[[Page 60841]]

for a collection alternative. In all cases, a taxpayer will be given an 
opportunity to demonstrate eligibility for a collection alternative and 
to become eligible for a collection alternative, in order to obtain a 
face-to-face conference. For purposes of determining whether a face-to-
face conference will be granted, the determination of a taxpayer's 
eligibility for a collection alternative is made without regard to the 
taxpayer's ability to pay the unpaid tax. A face-to-face conference 
need not be granted if the taxpayer does not provide the required 
information set forth in A-C1(ii)(E) of paragraph (c)(2). See also A-
C1(iii) of paragraph (c)(2).
    (3) Examples. The following examples illustrate the principles of 
this paragraph (d):

    Example 1. Individual A timely requests a CDP hearing concerning 
a NFTL filed with respect to the 1998 income tax liability assessed 
against individual A. Appeals employee B previously conducted a CDP 
hearing regarding a proposed levy for individual A's 1998 income tax 
liability. Because employee B's only prior involvement with 
individual A's 1998 income tax liability was in connection with a 
section 6330 CDP hearing, employee B may conduct the CDP hearing 
under section 6320 involving the NFTL filed for the 1998 income tax 
liability.
    Example 2. Individual C timely requests a CDP hearing concerning 
a NFTL filed with respect to the 1998 income tax liability assessed 
against individual C. Appeals employee D previously conducted a 
Collection Appeals Program (CAP) hearing regarding a NFTL filed with 
respect to individual C's 1998 income tax liability. Because 
employee D's prior involvement with individual C's 1998 income tax 
liability was in connection with a non-CDP hearing, employee D may 
not conduct the CDP hearing under section 6320 unless individual C 
waives the requirement that the hearing will be conducted by an 
Appeals officer or employee who has had no prior involvement with 
respect to individual C's 1998 income tax liability.
    Example 3. Same facts as in Example 2, except that the prior CAP 
hearing only involved individual C's 1997 income tax liability and 
employment tax liabilities for 1998 reported on Form 941, 
``Employer's Quarterly Federal Tax Return.'' Employee D would not be 
considered to have prior involvement because the prior CAP hearing 
in which she participated did not involve individual C's 1998 income 
tax liability.
    Example 4. Appeals employee F is assigned to a CDP hearing 
concerning a NFTL filed with respect to a trust fund recovery 
penalty (TFRP) assessed pursuant to section 6672 against individual 
E. Appeals employee F participated in a prior CAP hearing involving 
individual E's 1999 income tax liability, and participated in a CAP 
hearing involving the employment taxes of business entity X, which 
incurred the employment tax liability to which the TFRP assessed 
against individual E relates. Appeals employee F would not be 
considered to have prior involvement because the prior CAP hearings 
in which he participated did not directly involve the TFRP assessed 
against individual E.
    Example 5. Appeals employee G is assigned to a CDP hearing 
concerning a NFTL filed with respect to a TFRP assessed pursuant to 
section 6672 against individual H. In preparing for the CDP hearing, 
Appeals employee G reviews the Appeals case file concerning the 
prior CAP hearing involving the TFRP assessed pursuant to section 
6672 against individual H. Appeals employee G is not deemed to have 
participated in the previous CAP hearing involving the TFRP assessed 
against individual H by such review.

    (e) Matters considered at CDP hearing--(1) In general. Appeals will 
determine the timeliness of any request for a CDP hearing that is made 
by a taxpayer. Appeals has the authority to determine the validity, 
sufficiency, and timeliness of any CDP Notice given by the IRS and of 
any request for a CDP hearing that is made by a taxpayer. Prior to 
issuance of a determination, Appeals is required to obtain verification 
from the IRS office collecting the tax that the requirements of any 
applicable law or administrative procedure with respect to the filing 
of the NFTL have been met. The taxpayer may raise any relevant issue 
relating to the unpaid tax at the hearing, including appropriate 
spousal defenses, challenges to the appropriateness of the NFTL filing, 
and offers of collection alternatives. The taxpayer also may raise 
challenges to the existence or amount of the underlying liability, 
including a liability reported on a self-filed return, for any tax 
period specified on the CDP Notice if the taxpayer did not receive a 
statutory notice of deficiency for that tax liability or did not 
otherwise have an opportunity to dispute the tax liability. Finally, 
the taxpayer may not raise an issue that was raised and considered at a 
previous CDP hearing under section 6330 or in any other previous 
administrative or judicial proceeding if the taxpayer participated 
meaningfully in such hearing or proceeding. Taxpayers will be expected 
to provide all relevant information requested by Appeals, including 
financial statements, for its consideration of the facts and issues 
involved in the hearing.
* * * * *
    (3) * * *
    A-E2. A taxpayer is entitled to challenge the existence or amount 
of the underlying liability for any tax period specified on the CDP 
Notice if the taxpayer did not receive a statutory notice of deficiency 
for such liability or did not otherwise have an opportunity to dispute 
such liability. Receipt of a statutory notice of deficiency for this 
purpose means receipt in time to petition the Tax Court for a 
redetermination of the deficiency determined in the notice of 
deficiency. An opportunity to dispute the underlying liability includes 
a prior opportunity for a conference with Appeals that was offered 
either before or after the assessment of the liability. An opportunity 
for a conference with Appeals prior to the assessment of a tax subject 
to deficiency procedures is not a prior opportunity for this purpose.
* * * * *
    A-E6. Collection alternatives include, for example, a proposal to 
withdraw the NFTL in circumstances that will facilitate the collection 
of the tax liability, subordination of the NFTL, discharge of the NFTL 
from specific property, an installment agreement, an offer to 
compromise, the posting of a bond, or the substitution of other assets. 
A collection alternative is not available unless the alternative would 
be available to other taxpayers in similar circumstances. See A-D8 of 
paragraph (d)(2).
* * * * *
    A-E7. The taxpayer may raise appropriate spousal defenses, 
challenges to the appropriateness of the NFTL filing, and offers of 
collection alternatives. The existence or amount of the underlying 
liability for any tax period specified in the CDP Notice may be 
challenged only if the taxpayer did not have a prior opportunity to 
dispute the tax liability. If the taxpayer previously received a CDP 
Notice under section 6330 with respect to the same tax and tax period 
and did not request a CDP hearing with respect to that earlier CDP 
Notice, the taxpayer had a prior opportunity to dispute the existence 
or amount of the underlying tax liability.
* * * * *
    A-E11. No. An Appeals officer may consider the existence and amount 
of the underlying tax liability as a part of the CDP hearing only if 
the taxpayer did not receive a statutory notice of deficiency for the 
tax liability in question or otherwise have a prior opportunity to 
dispute the tax liability. Similarly, an Appeals officer may not 
consider any other issue if the issue was raised and considered at a 
previous hearing under section 6330 or in any other previous 
administrative or judicial proceeding in which the person seeking to 
raise the issue meaningfully participated. In the Appeals officer's 
sole discretion, however, the Appeals officer may consider the 
existence or amount of the underlying tax liability,

[[Page 60842]]

or such other precluded issues, at the same time as the CDP hearing. 
Any determination, however, made by the Appeals officer with respect to 
such a precluded issue shall not be treated as part of the Notice of 
Determination issued by the Appeals officer and will not be subject to 
any judicial review. Because any decisions made by the Appeals officer 
on such precluded issues are not properly a part of the CDP hearing, 
such decisions are not required to appear in the Notice of 
Determination issued following the hearing. Even if a decision 
concerning such precluded issues is referred to in the Notice of 
Determination, it is not reviewable by the Tax Court because the 
precluded issue is not properly part of the CDP hearing.
* * * * *
    (f) Judicial review of Notice of Determination--(1) In general. 
Unless the taxpayer provides the IRS a written withdrawal of the 
request that Appeals conduct a CDP hearing, Appeals is required to 
issue a Notice of Determination in all cases where a taxpayer has 
timely requested a CDP hearing. The taxpayer may appeal such 
determinations made by Appeals within the 30-day period commencing the 
day after the date of the Notice of Determination to the Tax Court.
    (2) * * *
    A-F1. Subject to the jurisdictional limitations described in A-F2 
of this paragraph (f)(2), the taxpayer must, within the 30-day period 
commencing the day after the date of the Notice of Determination, 
appeal the determination by Appeals to the Tax Court.
* * * * *
    Q-F3. What issue or issues may the taxpayer raise before the Tax 
Court if the taxpayer disagrees with the Notice of Determination?
    A-F3. In seeking Tax Court review of a Notice of Determination, the 
taxpayer can only ask the court to consider an issue, including a 
challenge to the underlying tax liability, that was properly raised in 
the taxpayer's CDP hearing. An issue is not properly raised if the 
taxpayer fails to request consideration of the issue by Appeals, or if 
consideration is requested but the taxpayer fails to present to Appeals 
any evidence with respect to that issue after being given a reasonable 
opportunity to present such evidence.
    Q-F4. What is the administrative record for purposes of Tax Court 
review?
    A-F4. The case file, including the taxpayer's request for hearing, 
any other written communications and information from the taxpayer or 
the taxpayer's authorized representative submitted in connection with 
the CDP hearing, notes made by an Appeals officer or employee of any 
oral communications with the taxpayer or the taxpayer's authorized 
representative, memoranda created by the Appeals officer or employee in 
connection with the CDP hearing, and any other documents or materials 
relied upon by the Appeals officer or employee in making the 
determination under section 6330(c)(3), will constitute the record in 
the Tax Court review of the Notice of Determination issued by Appeals.
    (g) * * *
    (3) * * *

    Example 1. The period of limitation under section 6502 with 
respect to the taxpayer's tax period listed in the NFTL will expire 
on August 1, 1999. The IRS sent a CDP Notice to the taxpayer on 
April 30, 1999. The taxpayer timely requested a CDP hearing. The IRS 
received this request on May 15, 1999. Appeals sends the taxpayer 
its determination on June 15, 1999. The taxpayer timely seeks 
judicial review of that determination. The period of limitation 
under section 6502 would be suspended from May 15, 1999, until the 
determination resulting from that hearing becomes final by 
expiration of the time for seeking review or reconsideration before 
the Tax Court, plus 90 days.
* * * * *
    (h) * * *
    (2) * * *
    Q-H2. Is a decision of Appeals resulting from a retained 
jurisdiction hearing appealable to the Tax Court?
    A-H2. No. As discussed in A-H1, a taxpayer is entitled to only one 
CDP hearing under section 6320 with respect to the tax and tax period 
or periods specified in the CDP Notice. Only determinations resulting 
from CDP hearings are appealable to the Tax Court.
    (i) * * *
    (2) * * *
    Q-I1. What must a taxpayer do to obtain an equivalent hearing?
    A-I1. (i) A request for an equivalent hearing must be made in 
writing. A written request in any form that requests an equivalent 
hearing will be acceptable if it includes the information and signature 
required in A-I1(ii) of this paragraph (i)(2).
    (ii) The request must be dated and must include the following:
    (A) The taxpayer's name, address, daytime telephone number (if 
any), and taxpayer identification number (e.g., SSN, ITIN or EIN).
    (B) The type of tax involved.
    (C) The tax period at issue.
    (D) A statement that the taxpayer is requesting an equivalent 
hearing with Appeals concerning the filing of the NFTL.
    (E) The reason or reasons why the taxpayer disagrees with the 
filing of the NFTL.
    (F) The signature of the taxpayer or the taxpayer's authorized 
representative.
    (iii) The taxpayer must perfect any timely written request for an 
equivalent hearing that does not satisfy the requirements set forth in 
A-I1(ii) of this paragraph (i)(2) within a reasonable period of time 
after a request from the IRS. If the requirements are not satisfied 
within a reasonable period of time, the taxpayer's equivalent hearing 
request will be denied.
    (iv) The taxpayer must affirm any timely written request for an 
equivalent hearing that is signed or alleged to have been signed on the 
taxpayer's behalf by the taxpayer's spouse or other unauthorized 
representative, and that otherwise meets the requirements set forth in 
A-I1(ii) of this paragraph (i)(2), by filing, within a reasonable 
period of time after a request from the IRS, a signed written 
affirmation that the request was originally submitted on the taxpayer's 
behalf. If the affirmation is filed within a reasonable period of time 
after a request, the timely equivalent hearing request will be 
considered timely with respect to the non-signing taxpayer. If the 
affirmation is not filed within a reasonable period of time, the 
equivalent hearing request will be denied with respect to the non-
signing taxpayer.
* * * * *
    Q-I6. Will a taxpayer be able to obtain Tax Court review of a 
decision made by Appeals with respect to an equivalent hearing?
* * * * *
    Q-I7. When must a taxpayer request an equivalent hearing with 
respect to a CDP Notice issued under section 6320?
    A-I7. A taxpayer must submit a written request for an equivalent 
hearing within the one-year period commencing the day after the end of 
the five-business-day period following the filing of the NFTL. This 
period is slightly different from the period for submitting a written 
request for an equivalent hearing with respect to a CDP Notice issued 
under section 6330. For a CDP Notice issued under section 6330, a 
taxpayer must submit a written request for an equivalent hearing within 
the one-year period commencing the day after the date of the CDP Notice 
issued under section 6330.
    Q-I8. How will the timeliness of a taxpayer's written request for 
an equivalent hearing be determined?
    A-I8. The rules and regulations under section 7502 and section 7503 
will apply to determine the timeliness of the

[[Page 60843]]

taxpayer's request for an equivalent hearing, if properly transmitted 
and addressed as provided in A-I10 of this paragraph (i)(2).
    Q-I9. Is the one-year period within which a taxpayer must make a 
request for an equivalent hearing extended because the taxpayer resides 
outside the United States?
    A-I9. No. All taxpayers who want an equivalent hearing concerning 
the filing of the NFTL must request the hearing within the one-year 
period commencing the day after the end of the five-business-day period 
following the filing of the NFTL.
    Q-I10. Where must the written request for an equivalent hearing be 
sent?
    A-I10. The written request for an equivalent hearing must be sent, 
or hand delivered (if permitted), to the IRS office and address as 
directed on the CDP Notice. If the address of the issuing office does 
not appear on the CDP Notice, the taxpayer should obtain the address of 
the office to which the written request should be sent or hand 
delivered by calling, toll-free, 1-800-829-1040 and providing the 
taxpayer's identification number (e.g., SSN, ITIN or EIN).
    Q-I11. What will happen if the taxpayer does not request an 
equivalent hearing in writing within the one-year period commencing the 
day after the end of the five-business-day period following the filing 
of the NFTL?
    A-I11. If the taxpayer does not request an equivalent hearing with 
Appeals within the one-year period commencing the day after the end of 
the five-business-day period following the filing of the NFTL, the 
taxpayer foregoes the right to an equivalent hearing with respect to 
the unpaid tax and tax periods shown on the CDP Notice. A written 
request submitted within the one-year period that does not satisfy the 
requirements set forth in A-I1(ii) of this paragraph (i)(2) is 
considered timely if the request is perfected within a reasonable 
period of time pursuant to A-I1(iii) of this paragraph (i)(2). If a 
request for equivalent hearing is untimely, either because the request 
was not submitted within the one-year period or not perfected within 
the reasonable period provided, the equivalent hearing request will be 
denied. The taxpayer, however, may seek reconsideration by the IRS 
office collecting the tax, assistance from the National Taxpayer 
Advocate, or an administrative hearing before Appeals under its 
Collection Appeals Program or any successor program.
    (j) Effective date. This section is applicable on or after November 
16, 2006, with respect to requests made for CDP hearings or equivalent 
hearings on or after November 16, 2006.

Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.

    Approved: October 6, 2006.
Eric Solomon,
Acting Deputy Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. E6-17140 Filed 10-16-06; 8:45 am]
BILLING CODE 4830-01-P