Taxpayers who owe more taxes than they can currently pay can request a Collection Due Process (CDP) hearing, but they must follow the rules. One taxpayer received a deficiency notice for failing to report $387,000 of income, some of which represented premature retirement plan distributions before she was 59½. After ignoring the deficiency notices, she received an IRS Notice of the Intent to Levy. She claimed that the income wasn’t taxable and was granted a CDP hearing to seek an alternative to the levy. But she failed to provide requested records or attend scheduled phone hearings. The U.S. Tax Court denied her request for a collection alternative and upheld the levy. (TC Memo 2023-136)
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