What If You Don’t Show Up to Your CDP Hearing? – Houston Tax Attorneys

You get a Final Notice of Intent to Levy for a year that you don’t feel that you owe the tax. The IRS made a mistake.

You file the Form 12153 to request a Collection Due Process hearing because that’s what the letter says to do. The IRS assigns a settlement officer. She sends you a letter asking for a Form 433-A, bank statements, missing returns, and proof of estimated tax payments.

Then you go quiet. You ask to reschedule the call. You don’t return calls. You don’t send the documents. You finally call in but tell the settlement officer the case should wait for an appeal in a different tax year. The hearing ends. The IRS sustains the levy.

Now what? Can you walk into U.S. Tax Court and have a judge take a fresh look at the tax bill? Or have you already lost your shot?

The recent decision in Menge v. Commissioner, T.C. Memo. 2026-41 (May 19, 2026), addresses what happens when a taxpayer requests a CDP hearing but does not engage with the IRS Appeals process.

Facts and Procedural History

The taxpayer had unpaid tax balances for back taxes owed to the IRS for the 2015 through 2018 tax years. He had filed his tax returns. He just hadn’t paid the tax he reported as being owed.

The IRS sent a Final Notice of Intent to Levy. The taxpayer responded by timely requesting a Collection Due Process hearing on Form 12153 and checking the box indicating he could not pay the balance. This is one of the ways to get the IRS to agree to a collection alternative, like an installment agreement, currently not collectible status, or an offer in compromise.

Eventually a settlement officer was assigned. She did what settlement officers do. She verified the assessments by checking the IRS’s records, scheduled a hearing, and sent the taxpayer a letter asking for the documents she needed to evaluate any collection alternative. The list included Form 433-A, three months of bank statements, a corrected 2016 return, signed returns for 2020 and 2021, and proof of estimated tax payments for 2022.

The taxpayer’s response was to ask for the Administrative Record and to postpone the hearing. The case was reassigned to a second settlement officer. The second officer sent the same document request and scheduled a new hearing. The taxpayer asked to delay. The request was denied. The taxpayer did not show up and did not send any documents.

A month later he left a voicemail saying the years at issue were also pending before the U.S. Tax Court and the First Circuit. The second settlement officer returned the call and explained that the cases on appeal did not involve any of the tax years in this hearing. The hearing was rescheduled. The taxpayer called in this time. But when the settlement officer told him he needed to submit the requested information to challenge the underlying tax, the taxpayer just repeated his argument that he was owed a refund from 2013 that should be carried forward.

Apparently the 2013 tax year had already been litigated and lost in the U.S. Tax Court and then again in the First Circuit. It had nothing to do with the four years on the levy notice, even if the taxpayer felt that he was owed a refund that carried forward.

After the hearing, the taxpayer sent nothing further. The settlement officer issued a Notice of Determination sustaining the levy. The taxpayer petitioned the U.S. Tax Court to contest this determination.

What is a CDP Hearing Supposed to Do?

The Collection Due Process hearing was added to the tax code in 1998 to give taxpayers a meaningful chance to be heard before the IRS levies on a bank accounts or garnishes wages. Section 6330 says that before the IRS can levy on property, it has to give the taxpayer written notice and the right to a hearing before the IRS Independent Office of Appeals.

The hearing is informal. There is no court reporter. There is no judge. It is a phone call or correspondence with a settlement officer in Appeals. But it matters, because what happens in that hearing dictates what happens later in U.S. Tax Court.

At the hearing, the taxpayer can raise “any relevant issue relating to the unpaid tax or the proposed collection action.” That includes spousal defenses, the existence or amount of the underlying tax liability, and challenges to the proposed collection action itself. The taxpayer can also propose a collection alternative — an installment agreement, currently not collectible, or an offer in compromise.

This is a powerful set of rights. But the rights only matter if the taxpayer actually uses them.

Can You Challenge the Underlying Tax in a CDP Case?

Sometimes. Section 6330(c)(2)(B) allows the taxpayer to challenge the existence or amount of the underlying liability only if the taxpayer “did not receive a statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability.”

In the present case the taxpayer had filed his own returns showing the amounts owed. There were no Notices of Deficiency to ignore, because the IRS just assessed what the taxpayer reported. So in theory, the CDP hearing was his first chance to dispute the assessed liabilities. In theory.

The catch is that the U.S. Tax Court will only review the underlying liability if the taxpayer “properly raised” it during the CDP hearing. That standard comes from Giamelli v. Commissioner, 129 T.C. 107 (2007), and the regulations at Treas. Reg. § 301.6330-1(f)(2). Just showing up and saying “I disagree with the tax” is not enough. The taxpayer has to put something on the table–an amended return, evidence of incorrect income, anything that gives the settlement officer something to evaluate.

The taxpayer here did not do that. He kept circling back to the 2013 refund argument, which had nothing to do with 2015 through 2018 and had already been rejected twice on appeal. He never produced an amended return. He never identified an item of income or a deduction that he thought was wrong. So the U.S. Tax Court concluded he had not properly raised the underlying liability, and the court refused to review it.

There is a footnote in the opinion worth noting. The court said that even if the taxpayer had properly raised the issue, the outcome would not have changed because there was no evidence that the amounts on his self-filed returns were wrong. That is the practical reality. A taxpayer who files a return reporting a balance due is fighting uphill to later say the return was wrong.

What About a Collection Alternative?

The other reason to request a CDP hearing is to negotiate something other than a levy. Settlement officers consider installment agreements, offers in compromise, and currently not collectible status. To evaluate any of these, the settlement officer needs financial information. That is what Form 433-A is for. It is a collection information statement showing income, expenses, assets, and debts.

If the taxpayer does not provide a Form 433-A, the settlement officer cannot evaluate a collection alternative. There is nothing to evaluate. The Tax Court has held in case after case that an Appeals officer does not abuse his or her discretion by sustaining a levy when the taxpayer fails to submit required financial information.

That was the heart of the holding here. The settlement officer asked for the Form 433-A and the supporting documents three different times across two settlement officers. The taxpayer never sent anything. The Tax Court said sustaining the levy under those circumstances was not arbitrary or capricious. It was the only thing the settlement officer could do.

The Takeaway

The lesson from this case is that a CDP hearing is a one-shot opportunity–technically two, as taxpayers can request a hearing on the first lien and also on the first levy. You request it on Form 12153, and from that point forward, the settlement officer is the most important person in your case. If you want to challenge the underlying tax, you have to put real evidence on the table during the hearing–not after, and not in U.S. Tax Court. If you want a collection alternative, you have to provide a complete Form 433-A and the supporting documents the settlement officer asks for. Requesting delays, refusing to engage, and pointing to unrelated cases on appeal will not preserve any of your rights. It will close the door on them. Treat the CDP hearing as the case itself, because by the time you get to U.S. Tax Court, that is exactly what it was.