Collection Due Process: Your Last Checkpoint Before an IRS Levy
A collection due process hearing is your statutory right to an independent review before the IRS seizes your property to pay a US tax debt. Furthermore, it is the last point at which an American in Britain can pause enforcement, challenge the numbers in some cases, and negotiate a sensible settlement with a neutral officer. Miss it, and the IRS can levy your US brokerage account, your US rental income or your Social Security without any further warning.
At TaxYork, we see the same pattern every year. A wealthy client in London learns of a levy notice weeks after it was issued, because the letter travelled by international post to an old address. By then, much of the thirty-day window has gone. This guide explains how collection due process works, why the deadline is harsher for Americans abroad, and how to use the hearing to protect significant US assets.
How Collection Due Process Fits Into the IRS Enforcement Sequence
The IRS cannot levy most property without first offering a collection due process hearing. Section 6330 of the Internal Revenue Code requires written notice at least thirty days before the first levy. Similarly, section 6320 gives the same right after the IRS files a Notice of Federal Tax Lien. Both provisions sit in 26 U.S. Code section 6330 and its companion section, and both send your case to the IRS Independent Office of Appeals.
Importantly, the hearing officer must have had no prior involvement with your unpaid tax. That independence matters. The revenue officer who wants to levy your account does not decide whether the levy goes ahead. Instead, an Appeals officer weighs the proposed action against your circumstances and the alternatives you put forward.
Who Actually Receives These Notices
The typical reader of this guide is not in financial distress. More often, you hold substantial wealth but have a disputed or overlooked US balance. It may come from a substitute return, an international information penalty, or missed US tax returns that the IRS assessed on incomplete data. Consequently, the issue is rarely whether you can pay. Rather, it is whether the IRS figure is right, and whether you can stop a levy on the wrong asset at the wrong time.
The Notices That Trigger Collection Due Process Rights
Not every IRS letter carries hearing rights, and confusing them is costly. Therefore, you need to identify the exact notice in front of you before deciding how to respond. The IRS lists every notice that offers an appeal on its page of letters and notices offering an appeal opportunity.
LT11, Letter 1058 and CP90
The core collection due process levy notices are the LT11 and Letter 1058, each headed as a final notice of intent to levy. Additionally, the CP90 serves the same function for levies on federal payments, including Social Security benefits under the continuous levy programme. Each of these letters states the balance due and your right to request a hearing within thirty days.
By contrast, the CP504 is frequently misunderstood. It is a notice of intent to levy, but it only authorises levies on state tax refunds. It does not carry collection due process rights for other assets. Nevertheless, a CP504 is a clear warning that the LT11 or Letter 1058 is coming, and it is the right moment to act.
Letter 3172 and the Federal Tax Lien
A lien is different from a levy. A lien is a public claim against your property, while a levy actually takes it. After filing a Notice of Federal Tax Lien, the IRS must notify you within five business days using Letter 3172. You then have thirty days, starting after that five-day period, to request a hearing.
For Americans living abroad, one detail is rarely explained. Under section 6323(f), a taxpayer whose residence is outside the United States is treated as residing in the District of Columbia. As a result, the IRS files your lien with the Recorder of Deeds in Washington DC, not in the state where you last lived. Credit agencies and US lenders can still see it. Moreover, the lien matters for your passport, as we explain below.
What Letters Do Not Count
Balance-due reminders such as the CP14, CP501 and CP503 carry no hearing rights. Similarly, a notice of deficiency concerns assessment, not collection, and it has its own separate deadline. We explain that letter in our guide to the notice of deficiency 150-day window. Mixing up the two procedures is one of the most common errors we see among Americans in Britain.
The Thirty-Day Deadline Is Harsher for Americans Abroad
Most online guides say you have thirty days "from receiving" the notice. That is not what the regulations say. Under Treasury Regulation section 301.6330-1, you must submit a written request within the thirty-day period commencing the day after the date of the notice. Consequently, the clock starts on the date printed on the letter, not the day it lands on your doormat in Kensington.
No Extra Time for Taxpayers Outside the United States
The Internal Revenue Code gives Americans abroad 150 days, rather than 90, to petition the Tax Court after a notice of deficiency. However, there is no equivalent extension for collection due process notices. Residence outside the United States does not extend either the hearing deadline or the later petition deadline. The Taxpayer Advocate Service has repeatedly highlighted this gap, because international mail routinely consumes a large part of the window.
In practice, a notice dated on the 3rd of the month may reach a London address on the 19th. That leaves you roughly two weeks to find an adviser, gather facts and deliver a valid request. Accordingly, you should never wait for the post to tell you that enforcement has started.
Proving Your Request Was on Time
Timeliness is judged under the timely-mailing rules of sections 7502 and 7503. The problem is that a Royal Mail postmark does not qualify. Instead, you should use one of the IRS-designated private delivery services, which include DHL Express Worldwide, FedEx International Priority and UPS Worldwide Express. Their shipping records can establish the date you sent the request.
Additionally, send the form to the exact address printed on your notice. We also recommend keeping a scanned copy of everything you send, together with the courier receipt.
Watching Your Account Instead of Your Letterbox
The strongest defence is early warning. You can view balances, notices and payment history through your IRS online account, and your account transcript records the date each collection notice was issued. Furthermore, you should file Form 8822 whenever you move, so that the IRS sends future notices to your UK address rather than a former US one.
Requesting a Collection Due Process Hearing With Form 12153
You request the hearing on Form 12153, titled Request for a Collection Due Process or Equivalent Hearing. The form is short, but what you write on it shapes the entire collection due process hearing. Therefore, treat it as the opening submission in your case, not an administrative formality.
Completing the Form Properly
Form 12153 asks you to identify the notice, the tax periods and the reasons you disagree. You should tick every relevant box, including collection alternatives, lien withdrawal and any challenge to the underlying liability. Additionally, explain in plain terms why you disagree. A vague request can limit the issues Appeals will consider later.
Be careful with the content. The IRS can impose a $5,000 penalty under section 6702 for a request based on a frivolous position. Genuine disputes about the amount, the procedure or the right collection alternative are never frivolous. However, protest arguments about the validity of the income tax are, and they will also forfeit the hearing.
What Happens Once Appeals Receives Your Request
A timely collection due process request suspends the proposed levy while the hearing and any Tax Court appeal are pending. Importantly, it also removes the debt from passport certification while the hearing is pending. Appeals will usually write to schedule a telephone or video conference. Hearings are informal, and most are conducted without anyone attending an IRS office.
Before the conference, Appeals will normally ask for any unfiled returns and a collection information statement. For individuals, that is Form 433-A. Complete it carefully, because it lists your UK assets as well as your US assets. We therefore prepare the financial statement and any missing returns together, so the figures reconcile.
The Equivalent Hearing If You Missed the Deadline
If you miss the thirty days, you can still request an equivalent hearing on the same form. Under the regulations, you must do so within one year commencing the day after the date of the levy notice. The equivalent hearing covers the same issues and follows the same procedure.
Nevertheless, it lacks the two protections that matter most. First, it does not automatically stop the levy. Second, you cannot take the outcome to the Tax Court. The result is a decision letter, not a notice of determination. Consequently, an equivalent hearing is a useful fallback but a poor substitute for a timely collection due process request.
What You Can Raise at a Collection Due Process Hearing
The scope of the hearing is wider than most people realise. Section 6330(c) allows you to raise any relevant issue relating to the unpaid tax or the proposed levy. The IRS summarises the process in its collection due process FAQs and in Publication 1660, Collection Appeal Rights.
Collection Alternatives
The most common collection due process outcome is an agreed alternative to enforcement. Options include an installment agreement, an offer in compromise, or temporary non-collectible status. For our clients, the practical goal is often different. They want to choose which asset pays, and when, rather than let the IRS levy an investment account at a poor moment.
For example, a levy on a US brokerage account forces a sale at whatever the market offers that day. That sale may trigger US capital gains tax and, separately, a UK capital gains charge. A negotiated payment plan lets you plan the disposal, match it with your UK tax year and avoid unnecessary double taxation. Furthermore, you can agree to pay from UK funds that the IRS could never reach directly.
Challenging the Underlying Liability
You can dispute the tax itself only in limited circumstances. Specifically, you may challenge the existence or amount of the liability if you did not receive a statutory notice of deficiency, or did not otherwise have an opportunity to dispute it. This is where Americans abroad often have a real advantage. A notice of deficiency sent to a stale US address, and never actually received, typically leaves the door open.
That matters most where the balance came from a substitute for return. A substitute return ignores your UK tax, so it overstates the US bill dramatically. In a collection due process hearing, you can file correct returns claiming the foreign tax credit and ask Appeals to reduce the assessment accordingly.
International Information Return Penalties
Penalties for late Forms 5471, 5472, 3520 and 8938 are assessed without a notice of deficiency. As a result, a collection due process hearing is often your first genuine chance to contest them. The courts are still arguing about this area. The Tax Court held in Farhy that the IRS lacked authority to assess section 6038(b) penalties, but the D.C. Circuit reversed that decision in 2024. The Tax Court has since followed its own view for cases appealable to other circuits.
Be aware that a prior Appeals conference can count as your opportunity to dispute. If you already argued the penalty before Appeals, you usually cannot argue it again. By contrast, FBAR penalties sit outside this framework altogether. They arise under Title 31, so they carry no collection due process rights at all. Our FBAR and FATCA reporting team handles those disputes through a different route.
Lien Withdrawal and the Balancing Test
In every collection due process hearing, Appeals must verify that the IRS followed every legal and procedural requirement. Additionally, it must decide whether the proposed action balances efficient collection against your legitimate concern that it be no more intrusive than necessary. For a lien, you can ask for withdrawal, subordination or discharge of a specific property. That is often decisive where a lien would block a US property sale or refinancing.
After the Hearing: Tax Court, Mootness and the Clock
Appeals ends a timely collection due process hearing with a Notice of Determination. If you disagree, you have thirty days to petition the United States Tax Court. Again, there is no 150-day extension for taxpayers abroad. Therefore, you should expect to prepare a petition quickly, usually by electronic filing.
Boechler and the Petition Deadline
In Boechler v Commissioner, the Supreme Court held in 2022 that the thirty-day petition deadline is not jurisdictional. Consequently, a late petition can, in principle, be rescued by equitable tolling. In practice, however, courts grant tolling sparingly, and Boechler itself was denied relief on remand. Treat the deadline as absolute.
Zuch and the Disappearing Levy
The Supreme Court added an important limit in June 2025. In Commissioner v Zuch, the Court held that the Tax Court loses jurisdiction once the IRS is no longer pursuing a levy. In that case, the IRS had applied the taxpayer's overpayments to the balance, so nothing remained to levy. As a result, the dispute over the underlying liability ended with it.
For our clients, the lesson is practical. If the IRS offsets your refunds or you pay the balance while the case is pending, you may lose your collection due process forum to argue the liability. You would then need to pursue a refund claim instead. Accordingly, decide your payment strategy with the litigation strategy in mind.
Why Requesting a Hearing Rarely Costs Expats Time
A timely collection due process request suspends the ten-year collection statute while the case is pending. Many advisers treat that as a reason for caution. For Americans in Britain, however, the cost is usually minimal. Section 6503(c) already suspends the collection period during any continuous absence from the United States of six months or more. Our guide to IRS collection abroad explains why that clock has often barely started for long-term UK residents.
Your Passport, Your US Assets and HMRC
The consequences of a missed hearing reach beyond a single levy. Above all, they can affect your passport, which for many Americans in Britain underpins their visa or right to remain.
How a Lapsed Hearing Feeds Passport Certification
Under section 7345, a seriously delinquent tax debt exists where a lien has been filed and your section 6320 rights have been exhausted or have lapsed, or where a levy has been made. For 2026, the threshold is $66,000, including penalties and interest. In other words, ignoring a Letter 3172 can itself satisfy the certification test. By contrast, a debt is excluded while a collection due process hearing under section 6330 is requested or pending.
The IRS explains the process on its page on passport revocation or denial for unpaid taxes. The US State Department then acts on the certification, and its guidance for Americans abroad is worth reading alongside it. We cover reversal in detail in our guide to IRS passport revocation for tax debt.
What the IRS Can and Cannot Levy From Britain
The US-UK tax treaty contains no article on assistance in collection. As a result, HMRC will not collect US tax for the IRS, and British courts will not enforce a US tax claim. However, the IRS can levy anything situated in the United States. That includes US bank and brokerage accounts, US rental income, US retirement plan balances and wages paid by US employers. It can also offset refunds and levy up to 15 percent of Social Security through the continuous levy programme.
For a high-net-worth client, those US assets are often substantial. Consequently, the collection due process hearing is not a formality. It is your chance to decide how the debt is settled before the IRS decides for you. A general explanation of how tax levies work is useful background.
How HMRC's System Compares
HMRC has no direct equivalent of a pre-levy independent hearing. Instead, you appeal an assessment within thirty days, and HMRC collects agreed debts through its own enforcement powers. It does, however, publish clear guidance on what to do if you cannot pay your tax bill on time, including Time to Pay arrangements. Many dual filers therefore negotiate with both authorities at once. Aligning the two payment plans protects your cash flow and your foreign tax credit and treaty position.
A Worked Case Study: Fourteen Days to Save $184,000
Consider an illustrative client, an American investment banker who has lived in London for eleven years. They have a US brokerage account worth $640,000 and a rented condominium in Boston producing $3,800 a month. They had missed US tax returns for 2020, 2021 and 2022, although they paid full UK tax on their London salary throughout.
The IRS prepared substitute returns using W-2 and 1099 data from their former US employer and the brokerage. It mailed the notices of deficiency to an address in Connecticut the client had left in 2015, and they were never received. Consequently, the IRS assessed $212,400 of tax, penalties and interest, with no credit for $171,000 of UK income tax paid on the same income.
The LT11 was dated 3 March 2026. It reached London on 19 March, leaving fourteen days before the deadline of 2 April. We sent Form 12153 by DHL Express Worldwide on 26 March, and it arrived on 30 March. Accordingly, the levy on the brokerage account was suspended, and the debt, which exceeded the $66,000 passport threshold, could not be certified while the hearing was pending.
Because the client never received the notices of deficiency, the collection due process hearing allowed them to challenge the underlying liability. We prepared accurate returns claiming the foreign tax credit for UK tax paid. Appeals accepted them, and the balance fell to $19,700 of tax. After partial penalty relief for reasonable cause, interest and the remaining penalties brought the total to $28,400.
The client paid that sum from UK funds, avoiding a forced sale of US shares during a market dip. The saving against the original assessment was $184,000. Had the request arrived after 2 April, the IRS could have levied the full $212,400 from the brokerage account. The client would then have had to pursue refund claims from Britain, while facing likely passport certification.
How TaxYork Can Help
We represent Americans in Britain from the first collection notice through Appeals and, where necessary, the Tax Court. Furthermore, we calculate the collection due process deadline from the date printed on the notice on the day you contact us. We then file Form 12153 by a designated courier with proof of delivery.
Our work covers the substance as well as the procedure. We prepare missing US and UK returns, rebuild foreign tax credit positions, and prepare the collection information statement so that every figure reconciles. Additionally, we coordinate with any HMRC payment plan and resolve related FBAR and FATCA exposure. Our team provides comprehensive US tax returns for expats and complete cross-border compliance.
Conclusion
A collection due process hearing is the most valuable protection an American in Britain has against an IRS levy. It pauses enforcement, keeps the debt away from passport certification, and can reopen the underlying liability where a notice of deficiency never reached you. However, the thirty days run from the date on the letter, not the date you receive it, and living abroad earns you no extra time.
Therefore, act the moment you see an LT11, Letter 1058, CP90 or Letter 3172. Better still, monitor your IRS account so that you know before the post arrives. Professional bodies such as the ICAEW and the Chartered Institute of Taxation consistently stress specialist support in cross-border disputes, and this area shows why.
Contact Us
If you have received an IRS levy or lien notice, speak to us immediately. You can book a consultation and we will confirm your collection due process deadline the same day.
Email hello@taxyork.com or telephone 020 3488 8606.
Disclaimer
This article provides general information about the collection due process procedure and US-UK cross-border taxation. It does not constitute tax, legal or financial advice, and it does not create a professional relationship. Tax law, thresholds and court decisions change frequently, and outcomes depend entirely on individual facts. Accordingly, you should obtain advice specific to your circumstances before acting. TaxYork accepts no liability for action taken or omitted in reliance on this article.