Form 12153: Why You Must Raise Every Issue at the CDP Hearing — Or Lose It Forever

When a client brings me an IRS Letter LT11 — Final Notice of Intent to Levy and Notice of Your Right to a Hearing — the clock starts immediately. They have 30 days from the date on that notice to file Form 12153, Request for a Collection Due Process or Equivalent Hearing. That form is their ticket to an independent review by an Appeals Officer. It's also their ticket to Tax Court if Appeals gets it wrong.

But here's what most people don't understand: the CDP hearing is not just a conversation. It's a record-building exercise. And if you don't raise an issue during the hearing, the Tax Court generally won't consider it on review. You get one CDP hearing per tax period. What you miss is gone.

After 25 years of tax work and over 100,000 returns, I've seen too many taxpayers — and too many representatives — treat Form 12153 like a formality. Check a couple of boxes, write a sentence or two, mail it in. That approach leaves arguments on the table that you can never pick back up.

The Rule: If You Don't Raise It, You Waive It

IRC § 6330(c)(2) defines what issues a taxpayer can raise at a CDP hearing. Subsection (A) covers issues relating to the unpaid tax or the proposed levy — collection alternatives, procedural challenges, appropriateness of the collection action. Subsection (B) allows challenges to the underlying tax liability itself, but only if the taxpayer did not receive a notice of deficiency or otherwise have a prior opportunity to dispute the liability.

When the Tax Court reviews a CDP determination under § 6330(d), it reviews the administrative record — meaning the issues that were actually raised during the hearing and the evidence that was actually submitted. Arguments that never made it into the record are generally excluded. The court isn't going to consider your brilliant theory about economic hardship if you never raised economic hardship with the Appeals Officer.

This is why what you write on Form 12153 — and what you submit during the hearing — matters more than most people realize. The form is the starting gun. Everything you want the Tax Court to eventually see needs to begin here. For a deeper look at how to structure your submissions, see How to Build an Administrative Record That Survives Tax Court Review.

Every Issue You Should Raise

Here's what I put on the table in every CDP hearing where a levy has been proposed. Not every argument will apply to every client. But I raise them all and let the record sort it out. The cost of including an argument you don't end up needing is zero. The cost of omitting one you needed later is everything.

Economic Hardship

The levy will deprive the taxpayer of the ability to meet basic reasonable living expenses. Under IRC § 6343(a)(1)(D), the IRS must release a levy that creates economic hardship. As the Tax Court held in Vinatieri v. Commissioner, 133 T.C. 392, sustaining a levy against a taxpayer in economic hardship is an abuse of discretion — because § 6343 would require its immediate release. The determination must address this. See Vinatieri v. Commissioner: The CDP Case Every Representative Should Know.

Collection Alternatives

The taxpayer is seeking less intrusive collection alternatives to pay the taxes, including installment agreement, partial-pay installment agreement, currently not collectible (CNC) status with Notice of Federal Tax Lien, or voluntary payments. Under § 6330(c)(2)(A), the taxpayer has the right to raise any relevant issue relating to the proposed levy, and collection alternatives are squarely within that scope. Force the Appeals Officer to evaluate each alternative on the record and explain why each was rejected.

Offer in Compromise — All Three Bases

Don't just check the OIC box. Raise all three bases separately so each one is in the record:

Doubt as to Liability (DATL): The taxpayer challenges the correctness of certain penalties or assessments. This includes penalties eligible for relief under Notice 2022-36 (automatic penalty abatement for certain failure-to-file penalties for tax years 2019 and 2020) and penalties where reasonable cause exists. To the extent the liability is reduced by penalty abatement, the assessed amount is overstated.

Doubt as to Collectibility (DATC): The taxpayer's assets and future income are insufficient to pay the full liability within the remaining collection statute expiration date (CSED). The taxpayer will provide Form 433-A (OIC) with supporting financial documentation.

Effective Tax Administration (ETA): Even if the liability is technically collectible, collection of the full amount would create economic hardship or would be unfair and inequitable under the taxpayer's specific circumstances. This is the safety valve under Treas. Reg. § 301.7122-1(b)(3), and it needs to be in the record even if you think DATC is your strongest basis.

Challenge to the Underlying Liability — § 6330(c)(2)(B)

If the taxpayer did not receive a statutory notice of deficiency or otherwise have a prior opportunity to dispute the underlying tax liability, they have the right to challenge it during the CDP hearing. This is a powerful provision that many representatives overlook. Raise it. Even if the challenge is limited to specific penalty assessments or specific line items on the return, get it on the record. If you don't raise it here, the Tax Court won't consider it.

Least Intrusive Collection Tool — § 6330(c)(3)(C)

This is the one I see left off most often, and it shouldn't be. Under IRC § 6330(c)(3)(C), the Appeals Officer must consider whether the proposed collection action "balances the need for the efficient collection of taxes with the legitimate concern that any collection action be no more intrusive than necessary." That's a statutory balancing test, and the Notice of Determination must address it.

The argument is straightforward: less intrusive alternatives exist — CNC with NFTL, installment agreement, offer in compromise — that fully protect the government's interest in collection while preserving the taxpayer's ability to meet basic living expenses. A levy is the most aggressive tool in the collection toolbox. The determination needs to explain why nothing less will do. For the full framework, see No More Intrusive Than Necessary: The IRC § 6330 Argument Most Representatives Miss.

Procedural Verification — § 6330(c)(1)

Request that the Appeals Officer verify compliance with all requirements of applicable law and administrative procedure before the proposed levy. This includes proper assessment under IRC § 6203, proper notice and demand under IRC § 6303, and issuance of the required pre-levy notices under IRC § 6330(a). This is a statutory requirement — the Appeals Officer must do it regardless — but putting it on the record ensures the determination addresses it explicitly.

Why This Matters Even More After Zuch

In June 2025, the U.S. Supreme Court decided Commissioner v. Zuch, No. 24-416, and the decision fundamentally changed the risk calculus for CDP hearings. The Court held that the Tax Court loses jurisdiction over a CDP case once the IRS is no longer pursuing a levy. If the liability gets paid off — even involuntarily through refund offsets — the case becomes moot, and the Tax Court can't review the determination.

Justice Gorsuch's dissent called this a "roadmap for evading Tax Court review." He wasn't wrong. The IRS can now, in theory, offset refunds against the disputed liability while your CDP case is pending, reduce the balance to zero, and then move to dismiss. The taxpayer who did everything right — filed the Form 12153 on time, raised every issue, petitioned the Tax Court — ends up with no merits decision on their dispute.

The Tax Court demonstrated this exact scenario in All Is Well Homecare Services, LLC v. Commissioner (December 4, 2025), where a small business lost its day in Tax Court after the IRS accepted an OIC and then declared the levy was no longer warranted. The court dismissed for lack of jurisdiction under Zuch.

Congress is moving to fix this. The Taxpayer Due Process Enhancement Act (H.R. 6506), advanced by the Ways and Means Committee on December 10, 2025, would amend § 6330(d)(1) to preserve Tax Court jurisdiction even if the IRS abandons the collection action. But until that legislation passes, Zuch is the law.

What does this mean practically? It means the CDP hearing itself — not the Tax Court petition — may be your only shot. If the IRS can moot your Tax Court case, then the arguments you raise at the hearing level are the arguments that matter most. Get them all on the record. Make the Appeals Officer address every one. Because the Notice of Determination might be the final word.

The Bottom Line

Form 12153 is not a formality. It's the foundation of your entire CDP case. Every issue you raise becomes part of the administrative record. Every issue you skip becomes an argument the Tax Court can refuse to consider — assuming you even get to Tax Court after Zuch.

Raise economic hardship. Raise all three OIC bases. Raise the liability challenge. Raise the least intrusive means argument. Raise the procedural verification. Raise everything. The cost of raising an argument you don't need is nothing. The cost of missing one you did need is the case.

Build the record like it's the only record that will ever exist. After Zuch, it might be.