Letter 4380 acknowledges a Collection Due Process or Equivalent Hearing request in which every issue raised is one the IRS treats as frivolous. The letter invites you to withdraw those positions and tells you what will happen if you do not.
The Consequence Is Severe
If the request is not amended to raise a legitimate issue, Appeals will disregard it under IRC Section 6330(g) and send Letter 4381. A disregarded request is treated as though you never filed it. That means no hearing, no suspension of levy, and no right to petition the Tax Court. The IRS can also assert a $5,000 penalty under IRC Section 6702(b) for a frivolous submission.
What a Legitimate Issue Looks Like
Appeals will consider a proposed installment agreement, an offer in compromise, currently not collectible status, a request for lien withdrawal or subordination, innocent spouse relief, a claim that the IRS did not follow required procedures, or a challenge to the underlying tax if you never had a prior opportunity to dispute it. Any one of those, supported by real information, keeps the hearing alive.
Respond in writing by the date on the letter. State the legitimate issue you want Appeals to consider and withdraw the rest.
If you received Letter 4380, call us at (813) 229-7100. There is usually a legitimate collection alternative worth raising.