The Tax Times: Protecting Taxpayers: TIGTA Reveals Needed Fixes in IRS Appeals’ CDP Hearing Process

Tuesday, November 4, 2025

Protecting Taxpayers: TIGTA Reveals Needed Fixes in IRS Appeals’ CDP Hearing Process

The September 18, 2025 Treasury Inspector General report (Report Number: 2025-300-051) found that the IRS Office of Appeals needs to strengthen its approach to Collection Due Process (CDP) hearings, ensuring taxpayer protections during lien and levy disputes. The audit revealed gaps in the verification performed by Appeals, particularly in flagging and reversing unlawful levies. TIGTA recommended that the Office of Appeals implement clearer verification steps and procedures to better identify prohibited levies and protect taxpayer rights throughout the CDP process.

Appeals' Oversight Still Needs Sharpening

CDP hearings are central for taxpayers to challenge IRS collection actions like levies and liens before their assets are seized. TIGTA's statutory review for Fiscal Year 2025 scrutinized Appeals’ responsibility to ensure all collection actions comply with IRC §§ 6320 and 6330. The review discovered that Appeals sometimes failed to fully verify whether unlawful levies occurred and did not consistently reverse them when found. This deficiency potentially undermines the fairness and integrity of the taxpayer appeal process.

In nearly all of the 55 unlawful levy cases, the Appeals hearing officers did not identify that an unlawful levy occurred and incorrectly verified that all laws and procedures had been complied with for the proposed levy action to proceed.

Key Recommendations for IRS Appeals

TIGTA made clear recommendations:

· Appeals should develop procedures to require hearing officers to check whether any levies were imposed during the collection stay, and compare the date a CDP hearing was requested with the posting date of related IRS transactions.

· Appeals agreed to refine guidance to ensure that a lag between a CDP hearing request and transaction posting is flagged as a potential risk area.
These steps aim to better safeguard taxpayer rights when challenge periods are live and unlawful levies could occur.

Taxpayer Takeaway: Accountability Matters

For taxpayers and tax professionals, this report signals improving—yet still imperfect—oversight of IRS collection activities. Effective advocacy during CDP hearings depends on Appeals thoroughly reviewing all IRS actions and correcting any missteps. Enhanced procedures and accountability are in progress, but readers should remain vigilant and proactive by requesting hearing transcripts and ensuring timelines are strictly verified.

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