IRC 6320 

Crawford v. Comm’r filed January 7, 2026 by the U.S. Tax Court at T.C. Memo 2026-3 illustrates the opportunity provided to seek Collection Due Process hearing rights after a Notice of Federal Tax Lien has been issued.  In this case, the taxpayer had been assessed a Trust Fund Recovery Penalty for non-payment of employment taxes. Ultimately, the IRS issued Letter 3172 Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320.  In this case, the taxpayer’s representative filed a Request for Collection Due Process hearing within the 30 day timeline provided in the Lien notice.  By preserving these rights, the taxpayer obtained the ability to review collection alternatives with IRS Appeals. These would include Currently Not Collectible, regular Installment Agreement, Partial Payment Installment Agreement, or an Offer In Compromise. Many times reviewing collection alternatives with IRS Appeals is more advantageous than with IRS collections.  Most commonly, taxpayers will receive CDP rights at the time a Final Notice of Intent to Levy is issued. Once 30 days passes from the issuance of the Final Notice of Intent to Levy, the taxpayer misses the opportunity to have a CDP hearing. However, it has been this practitioner’s experience that the IRS could issue the Notice of Federal Tax Lien Filing either before or after the Final Notice of Intent to Levy. Therefore, there could be another opportunity for a CDP hearing if the hearing opportunity has been missed because a Final Notice of Intent to Levy has been issued at some point in the past.  Or this opportunity could present itself before the taxpayer is issued a Final Notice of Intent to Levy. In the instant case, the taxpayer was attempting to use the CDP hearing to attack the validity of the Trust Fund Recovery Penalty assessment itself.  Fundamentally, a taxpayer must file an Appeal of the Letter 1153 proposed assessment of Trust Fund Recovery Penalty at the time of issuance of that proposal, rather than appealing the assessment after the fact in a CDP hearing.  Regardless, the IRS could entertain collection alternatives in this setting.