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Taxpayers Wanting an Equivalent, Rather Than CDP, Hearing Must Be Patient

Posted on Dec. 8, 2021

In Ruhaak v. Commissioner, 157 T.C. No. 9 (2021), the Tax Court, in a precedential opinion, made it clear that a taxpayer must wait until the time to file a CDP hearing has expired if they want to have an equivalent hearing to talk about their collection matters. We have previously blogged, here, and here (post collects three earlier cites to posts discussing the case) about a taxpayer, Weiss v. Commissioner, 147 T.C. 179, 187-191 (2016), aff’d per curiam, 121 A.F.T.R.2d 2018-1853 (D.C. Cir. 2018), who said he thought he was filing too late to obtain a CDP hearing only to find he was not. There are good and bad consequences to each type of hearing. Taxpayers and practitioners want to be thoughtful about which to request.

Based on Ruhaak, it’s now clear, if it wasn’t before, that a taxpayer cannot pick an equivalent hearing if the request for a hearing comes during the window of time during which the taxpayer can request a CDP hearing. This is a precedential opinion issued in a case in which the taxpayer was unrepresented.

Timing of CDP Request Controls Hearing Type

The IRS sent a Notice of Intent to Levy under IRC 6330 dated March 10, 2017. Mr. Ruhaak mailed Form 12153 to the IRS on April 7, 2017, which was postmarked on that date and delivered to the IRS on April 10. On the preprinted form Mr. Ruhaak checked the box stating that he wanted an equivalent hearing if he could not have a CDP hearing. The IRS does not offer a box that allows you to check saying that you would like an equivalent hearing rather than a CDP hearing. The box he checked aids those taxpayers who miss the 30-day window to request a CDP hearing but who would still like to talk to Appeals about possible collection alternatives to levy. The IRS, taking the position that the Tax Court takes in this opinion, views the CDP request as an on/off switch driven by the timing of the request and not a choice between CDP and equivalent hearing. You either qualify for a CDP hearing and receive one or you do not qualify for a CDP hearing and you receive an equivalent hearing if you request one within one year of the date of the CDP notice (but more than 30 days thereafter.)

In June of 2017 the Settlement Officer (SO) in Appeals assigned to the case reached out to Mr. Ruhaak to let him know the CDP request had been received and inviting him to a hearing. The SO’s letter to Mr. Ruhaak stated that he had timely requested a CDP hearing. Mr. Ruhaak responded that he did not request a CDP hearing and that he wanted an equivalent hearing. In his response, Mr. Ruhaak stated that his request:

was made within the one year period commencing the day after the date of the CDP levy notice (March 10, 2017)”. Petitioner therefore asked the SO to revise her previous letter to reflect that petitioner had requested an equivalent hearing addressing only the 2013 taxable year. He informed the SO that the date and time of the telephone conference could “be re-established when * * * [her] written communication ha[d] been corrected and re-issued”, and that he would be available for such a conference during the last week of July and the first week of August.

The SO wrote back and said the timely request resulted in a CDP hearing and would Mr. Ruhaak please send whatever information he wanted Appeals to consider. Mr. Ruhaak responded to this correspondence again saying he had requested an equivalent hearing and saying he would provide information once this procedural dispute was settled. Appeals sent out a notice of determination about six weeks later explaining in the notice that the taxpayer timely made the CDP request but since the taxpayer had not provided any information in support of the request, the IRS could move forward with levy.

In response to the determination letter, Mr. Ruhaak timely filed a Tax Court petition asserting that he made a request for an equivalent hearing and not a CDP hearing. He explained at the trial of the case that

he had requested an equivalent hearing so that he could present to Appeals his views on the morality of paying Federal income tax but without the possibility of subsequent Tax Court litigation5 or a fine.6 He conceded that he was aware that it is well settled that taxpayers may not object to the payment of Federal income tax on moral grounds.

In addressing the issue, the court noted the difference between CDP and equivalent hearings by discussing the ability of a taxpayer to petition the Tax Court following one but not the other. It also noted that the CDP provisions come from the statute while the equivalent hearing is essentially a creature of the regulations developed based on the legislative history of IRC 6330 which state:

“[a] taxpayer must submit a written request for an equivalent hearing within the one-year period commencing the day after the date of the CDP Notice issued under section 6330.” Sec. 301.6330-1(i)(2), Q&A-I7, Proced. & Admin. Regs.; see also id., Q&A-I9 (“All taxpayers who want an equivalent hearing must request the hearing within the one-year period commencing the day after the date of the CDP Notice issued under section 6330.”).

Here the Court finds that because he mailed the request for a CDP hearing back to the IRS within the 30-day period the plain text of the regulation makes him ineligible for an equivalent hearing.


Having made this determination, the Court then looked at his CDP case. While the petitioner spent most of his energy at the Appeals level arguing that the IRS should treat his case as an equivalent hearing, the Court found that he raised in the proceeding before it the question of whether the SO’s refusal to reschedule the hearing served as an abuse of discretion. The Court found that this refusal was not an abuse of discretion. This part of the opinion could have large implications. Earlier decisions have found similar refusals both abusive and not abusive. The Court cites to a couple of cases one of which is Lunsford v. Commissioner, 117 T.C. at 188-189. My take on the decision that the refusal to postpone the hearing is not an abuse of discretion is that such a decision does not abuse discretion where the taxpayer has otherwise only presented meritless arguments. Here, that is the case since the only real argument Mr. Ruhaak made to the SO involved whether the case should be heard as an equivalent hearing. If the taxpayer seeks to make arguments the Court views as meritorious or potentially meritorious, then the refusal by the SO has a much higher likelihood of resulting in a remand.

The last issue in the case involved the penalty for delay in the Tax Court proceeding which the Court, acting with unbridled discretion, may impose pursuant to IRC 6673. It had previously imposed such a penalty on Mr. Ruhaak as it noted in footnote 5:

5This is the third CDP case petitioner has brought before the Tax Court. In both of the previous cases, the Court held that petitioner had made frivolous conscientious objection arguments. See Ruhaak v. Commissioner, T.C. Dkt. No. 1714-14L (Dec. 22, 2014) (order and decision), aff’d per order, 116 A.F.T.R.2d 2015-5913 (7th Cir. 2015); Ruhaak v. Commissioner, T.C. Dkt. No. 27423-08L (Aug. 6, 2010) (order and decision), aff’d, 422 F. App’x 530 (7th Cir. 2011). In the more recent case the Court imposed a $5,000 penalty on petitioner under sec. 6673(a)(1), and the Court of Appeals ordered an additional $750 sanction against him for filing a frivolous appeal.

In this case it does not impose the 6673 penalty

because section 301.6330-1(i)(2), Q&A-I7, Proced. & Admin. Regs., when read in isolation, was susceptible of the interpretation petitioner placed on it.

Despite giving Mr. Ruhaak a pass on the penalty this time, it admonished him not to come back to the Court with frivolous arguments about how his objections to paying tax for military expenditures exempted him from the requirement to pay.  Giving him a pass in this case makes sense because the specific argument he raised presented such a non-frivolous and novel argument that the Court felt the need to publish a precedential opinion on this issue.  For a discussion of the imposition of the IRC 6673 penalty you can type in 6673 into the PT search box and find dozens of designated orders discussing this issue.  A collection of decisions and an analysis of the judges most likely to order this penalty exists in this article.


This case presents an unusual reason for wanting an equivalent hearing. Mr. Ruhaak did not want to go back to Tax Court because he did not want to be penalized again for going there and making frivolous arguments. He felt that in an equivalent hearing he could make the frivolous arguments free from the possibility of penalties. I think he was right but most taxpayers should make a different calculus on whether an equivalent hearing or a CDP hearing is best.

The primary reason for wanting a CDP hearing is the opportunity to go to the Tax Court if Appeals does not agree. Even though the chances of overturning Appeals in Tax Court are quite low, the possibility exists. A secondary reason that Bryan Camp might point out though not endorse, is that CDP is sometimes known as Collection Delay Process and the opportunity of going to Tax Court after going to Appeals can delay the day of reckoning for another year or two. The more normal reason for wanting an equivalent hearing concerns the statute of limitations. While CDP offers the opportunity to postpone collection, it comes with a suspension of the statute of limitations on collection. Because the likelihood of overturning Appeals in Tax Court is low, most taxpayers can get the same result in an equivalent hearing as they could achieve in a CDP hearing but without the suspension of the statute of limitations.

Deciding whether to seek a CDP hearing or an equivalent hearing is an important calculus facing any taxpayer who receives a CDP notice from the IRS. The Ruhaak case provides clear guidance that the timing of when you make your request can preclude the opportunity for an equivalent request. It is not possible to make that request until after the time to make a CDP request has passed. To the extent this was not already clear, the Tax Court has now made its view on the issue clear and has aligned with the IRS. Any taxpayer wanting to fight about this result will need to go into the circuits.

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