What happens after tax is assessed and unpaid: liens and levies, Collection Due Process and the Collection Appeals Program, installment agreements, offers in compromise, currently not collectible status, the trust fund recovery penalty, passport certification and related refund and payment forms. The SEE tests deadlines, dollar thresholds and which remedy fits a client's facts.
Specific Areas of Representation·5 min read·6 sections
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Must-know for the exam
✓A CDP levy hearing must be requested on Form 12153 within 30 days of the Final Notice of Intent to Levy (Letter 1058 or LT11) (IRC 6330(a); Pub. 1660).
✓A late request within 1 year gets an equivalent hearing: no Tax Court review and no suspension of collection (Treas. Reg. 301.6330-1(i)).
✓The Collection Appeals Program is faster but final, with no judicial review and generally no challenge to the underlying liability (Pub. 1660; IRM 8.24.1).
✓The IRS must release a lien within 30 days after the liability is paid or becomes unenforceable (IRC 6325(a); Pub. 594).
✓2025 levy exemptions: $5,860 for books and tools of a trade and $11,710 for household goods and personal effects (IRC 6334(a); Rev. Proc. 2024-40 sec. 3.50).
✓Guaranteed installment agreement: tax of $10,000 or less paid within 3 years with a clean 5-year record; streamlined: up to $50,000 within 72 months (IRC 6159(c); Form 9465 instructions (Rev. 7-2024)).
✓A lump sum offer needs 20% of the offer plus the $205 fee; accepted offers require 5 years of compliance (IRC 7122(c); Form 656 Booklet (Rev. 4-2025)).
✓Currently not collectible status stops collection, but interest, penalties, the CSED and refund offsets continue (IRM 5.16.1).
✓Letter 1153 gives a proposed trust fund recovery penalty target 60 days to appeal (75 if outside the US) (IRC 6672(b); IRM 5.7.4).
✓A seriously delinquent debt for passport certification is over $64,000 for 2025 (IRC 7345; Rev. Proc. 2024-40 sec. 3.60).
▸On this page · 6 sections
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Traps that cost marks
→Treating CP504 as the CDP notice.
→Confusing the CDP deadline with the 90-day deficiency period.
→Expecting Tax Court review after an equivalent hearing.
→Assuming CAP decisions can be appealed to the Tax Court.
→Confusing lien release with lien withdrawal.
→Confusing withdrawal with release, discharge or subordination.
→Mixing up the two levy exemption amounts.
→Assuming Social Security is fully exempt or fully leviable.
Why it matters on the exam
Collection representation is about matching the client's ability to pay to the right tool, and about preserving appeal rights before they lapse. Part 3 Domain 3 questions name a notice or a balance and ask what the taxpayer can do and by when.
Once assessed, tax can be collected for 10 years from assessment (IRC 6502); several of the remedies below suspend that period.
Liens, levies and appeal rights
1
Assessment and notice and demand — The statutory lien arises on all the taxpayer's property.
2
Notice of federal tax lien filed — CDP lien hearing: request within 30 days after the 5-business-day notice period (IRC 6320).
3
Final Notice of Intent to Levy — Letter 1058 or LT11 at least 30 days before levy; CDP request within 30 days (IRC 6330).
4
Missed the window — Equivalent hearing within 1 year, or CAP at any time.
5
Levy — Subject to exemptions; Federal Payment Levy Program takes up to 15% of Social Security (IRC 6331(h)).
IRC 6320, 6330, 6331; Pub. 594; Pub. 1660.
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•Release follows payment in full within 30 days. Withdrawal (Form 12277) removes the public notice; one route is a balance of $25,000 or less under a direct debit installment agreement after three consecutive payments. Discharge frees specific property; subordination lets another creditor go first.
•A collection summons is not self-enforcing; the IRS must go to district court (IRC 7604).
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