Frequently Asked Questions
Who is eligible for the Collection Alternatives Election?
Available during a CDP hearing if the taxpayer is not in bankruptcy and has filed all required tax returns.
How does the Collection Alternatives Election work?
Taxpayers may propose substituting assets, posting a bond, or entering into an Offer-in-Compromise to settle tax debt for less than the full amount owed.
What law authorizes the Collection Alternatives Election?
The Collection Alternatives Election is authorized under IRC §6330(c)(2)(A) of the Internal Revenue Code (Title 26, United States Code).
Statutory Text — IRC §6330
Source: Internal Revenue Code, Title 26, United States Code
§ 6330. Notice and opportunity for hearing before levy(a) Requirement of notice before levy(1) In generalNo levy may be made on any property or right to property of any person unless the Secretary has notified such person in writing of their right to a hearing under this section before such levy is made. Such notice shall be required only once for the taxable period to which the unpaid tax specified in paragraph (3)(A) relates.
(2) Time and method for noticeThe notice required under paragraph (1) shall be—(A) given in person;
(B) left at the dwelling or usual place of business of such person; or
(C) sent by certified or registered mail, return receipt requested, to such person’s last known address;
not less than 30 days before the day of the first levy with respect to the amount of the unpaid tax for the taxable period.
(3) Information included with noticeThe notice required under paragraph (1) shall include in simple and nontechnical terms—(A) the amount of unpaid tax;
(B) the right of the person to request a hearing during the 30-day period under paragraph (2); and
(C) the proposed action by the Secretary and the rights of the person with respect to such action, including a brief statement which sets forth—(i) the provisions of this title relating to levy and sale of property;
(ii) the procedures applicable to the levy and sale of property under this title;
(iii) the administrative appeals available to the taxpayer with respect to such levy and sale and the procedures relating to such appeals;
(iv) the alternatives available to taxpayers which could prevent levy on property (including installment agreements under section 6159); and
(v) the provisions of this title and procedures relating to redemption of property and release of liens on property.
(b) Right to fair hearing(1) In generalIf the person requests a hearing in writing under subsection (a)(3)(B) and states the grounds for the requested hearing, such hearing shall be held by the Internal Revenue Service Independent Office of Appeals.
(2) One hearing per periodA person shall be entitled to only one hearing under this section with respect to the taxable period to which the unpaid tax specified in subsection (a)(3)(A) relates.
(3) Impartial officerThe hearing under this subsection shall be conducted by an officer or employee who has had no prior involvement with respect to the unpaid tax specified in subsection (a)(3)(A) before the first hearing under this section or section 6320. A taxpayer may waive the requirement of this paragraph.
(c) Matters considered at hearingIn the case of any hearing conducted under this section—(1) Requirement of investigationThe appeals officer shall at the hearing obtain verification from the Secretary that the requirements of any applicable law or administrative procedure have been met.
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