Appendix B: Glossary

Assessment. The IRS's formal recording of a tax liability on its books. The ten-year collection period runs from this date.

Automated Collection System (ACS). The IRS's call-center-based collection function for cases not assigned to a revenue officer.

Collection Appeals Program (CAP). A fast, informal appeal of specific collection actions (lien, levy, seizure, installment agreement decisions) on Form 9423. No court review.

Collection Due Process (CDP). A hearing with the IRS Independent Office of Appeals requested using Form 12153. For a levy CDP notice such as LT11, Letter 1058 or CP90, the request period is 30 days from the date of the notice. Follow the printed hearing deadline; do not count from when you opened the envelope. A prior CDP notice for the tax and period may already have provided the hearing opportunity. For Letter 3172, the IRS must notify you within five business days after filing the Notice of Federal Tax Lien. The 30-day lien CDP request period begins after that five-business-day period. Use the hearing deadline printed on Letter 3172, not its letter date plus 30 days. The lien is already filed; requesting a hearing does not itself remove it. A timely levy CDP request generally prohibits levy for the covered taxes and periods during the CDP process. Statutory exceptions include jeopardy, state-refund, disqualified employment tax and federal contractor levies; these can carry post-levy hearing rights. The IRS normally does not levy during the lien-hearing request period and related CDP process, but a lien hearing is not an unconditional statutory bar to levy. A timely CDP request suspends the collection limitation period until the determination becomes final or you withdraw the request in writing.

Collection Financial Standards. The IRS's published allowances for necessary living expenses, used to compute disposable income.

Collection Statute Expiration Date (CSED). The date, generally ten years after assessment plus any suspensions, after which the IRS can no longer collect.

Currently Not Collectible (CNC). A status in which the IRS suspends active collection because the taxpayer cannot meet necessary living expenses. The debt remains and the collection clock runs.

Disposable income. Monthly income minus allowable expenses under the Collection Financial Standards.

Effective tax administration (ETA). The ground for an Offer in Compromise where the IRS could collect in full but doing so would cause economic hardship or be inequitable.

Equivalent hearing. If you miss the CDP deadline, an equivalent-hearing request must be postmarked on or before the end of one year from the date of the levy CDP notice, or one year plus five business days from the lien filing date for a lien notice—not one year from Letter 3172’s date. An equivalent hearing does not legally prohibit levy, suspend the collection limitation period, or provide the same right to Tax Court review.

Federal Payment Levy Program (FPLP). The automated program through which the IRS levies up to 15 percent of certain federal payments, including Social Security.

First Time Abate (FTA). Administrative removal of failure-to-file, failure-to-pay, or failure-to-deposit penalties for one period for a taxpayer with a clean three-year history.

Innocent spouse relief. Relief under section 6015 from joint-return liability for a spouse who did not know of the understatement or for whom holding them liable would be inequitable. Requested on Form 8857.

Installment agreement. A payment plan with the IRS. Types include guaranteed, streamlined (Simple Payment Plan), non-streamlined, and partial payment.

Levy. The IRS taking property or rights to property, such as a bank account or wages, to satisfy a tax debt.

Lien. The government's legal claim against all of a taxpayer's property for unpaid tax. Arises automatically on assessment; made public by filing a Notice of Federal Tax Lien.

Net realizable equity. The value of assets after quick-sale discount, loans, and exclusions; one of the two inputs to reasonable collection potential.

Offer in Compromise (OIC). An agreement to settle a tax debt for less than the full amount, on grounds of doubt as to liability, doubt as to collectibility, or effective tax administration. Form 656.

Partial payment installment agreement (PPIA). A payment plan that does not pay the debt in full before the collection deadline; the remainder expires.

Reasonable cause. The legal standard for penalty relief: the taxpayer exercised ordinary business care and prudence but was unable to comply.

Reasonable collection potential (RCP). The minimum the IRS will accept in a collectibility offer: net realizable equity plus 12 or 24 months of disposable income.

Revenue officer. A field collection employee assigned to larger or more complex cases, with authority to approve agreements, file liens, and levy.

Settlement officer. An Independent Office of Appeals employee who conducts CDP and equivalent hearings.

Substitute for Return (SFR). A return the IRS prepares for a non-filer under section 6020(b), using reported income with no deductions, expenses, or credits.

Taxpayer Advocate Service (TAS). An independent organization within the IRS that assists taxpayers facing hardship or systemic failures. Requested on Form 911.

Transcript. The IRS's record of your account, return, or wage and income information for a tax year, available through your Online Account.

Trust Fund Recovery Penalty (TFRP). A penalty under section 6672 equal to 100 percent of unpaid trust fund employment taxes, assessed personally against responsible persons who willfully failed to pay.

Hearing timing and procedures: IRS Publication 1660, pages 1–2 and Form 12153 and instructions, source-checked October 30, 2026. See Chapter 16 for the lien, levy and equivalent-hearing distinctions.