Receiving an IRS CP90 or CP297 notice can be alarming, especially if you are unsure about the steps you need to take. This guide will help you understand what a CP90/CP297 notice means and provide clear instructions on how to respond effectively, ensuring you manage your tax obligations without undue stress.

What is a CP90/CP297 Notice?

The IRS sends a CP90 or CP297 notice when you have an unpaid balance on your tax account and have not responded to previous notices, such as the CP501, CP503, and CP504. These notices indicate that the IRS intends to levy (seize) your assets, including your wages, bank accounts, and other property, to satisfy the tax debt. It is a final notice of intent to levy and your right to a hearing, indicating that you must take immediate action to resolve the debt.

Why Did I Receive a CP90/CP297 Notice?

You received a CP90 or CP297 notice because you have a balance due on your tax account and have not responded to earlier notices. This could happen if you overlooked previous notices, have not made a payment, or have not set up a payment arrangement. The IRS sends this notice as a final warning before taking severe actions, such as levying your assets.

Key Information Included in the CP90/CP297 Notice

The notice specifies the total amount you owe, including any additional penalties and interest accrued since the previous notices. For example, if you owed $1,150 in the CP504 notice, the CP90/CP297 notice might now show a balance of $1,200 due to ongoing interest and penalties. It includes a new due date by which you must pay the amount to avoid further penalties and levies. The notice provides detailed instructions on how to pay your balance and informs you of your right to request a Collection Due Process (CDP) hearing within 30 days to appeal the levy action. It also includes your taxpayer identification number, which is necessary for making payments or contacting the IRS.

Steps to Take After Receiving a CP90/CP297 Notice

First, ensure the notice is accurate by comparing it to your tax records. Log in to your IRS account online to check your balance and payment history. If everything matches, proceed to pay the amount due. The fastest way to pay is through the IRS Direct Pay system, which allows direct bank account payments. If you prefer, you can send a check or money order to the address provided in the notice, including your taxpayer identification number on the payment. If you believe there is an error, contact the IRS immediately at the number provided in the notice. For example, if you’ve already made a payment that isn’t reflected in the notice, you will need to provide proof of that payment.

If you cannot pay the full amount, consider setting up an installment agreement with the IRS. For instance, if you owe $5,000 and can only afford $500 per month, a long-term installment agreement can help you manage your payments over time. Additionally, you have the right to request a Collection Due Process (CDP) hearing within 30 days of the notice date to appeal the proposed levy action.

Payment Options

The IRS provides several payment options. The fastest and easiest is through the IRS Direct Pay system, which allows you to pay directly from your bank account. Alternatively, you can use the Electronic Federal Tax Payment System (EFTPS) or send a check or money order to the address provided in the notice. Be sure to include the payment voucher attached to the notice and write your taxpayer identification number on the check or money order. If you cannot pay the full amount, consider setting up an installment agreement with the IRS.

What Happens If You Ignore the CP90/CP297 Notice?

Ignoring the CP90/CP297 notice can lead to severe consequences. The IRS will continue to add penalties and interest to your unpaid balance, causing it to grow over time. The IRS may levy (seize) your wages, bank accounts, or other assets to collect the debt. Additionally, a federal tax lien may be filed against your property, affecting your credit score and ability to sell or refinance. For more detailed information on the process and the number of notices the IRS sends before a levy, check out our article here. It’s crucial to respond promptly to avoid these escalating actions.

Concise Wrap-Up Summarizing Key Points

Receiving a CP90 or CP297 notice means you have an unpaid balance with the IRS and have not responded to earlier notices. It is crucial to verify the notice, review your account, and take action promptly to avoid further penalties. Paying the amount due, setting up a payment plan, or requesting a CDP hearing are effective ways to manage your tax obligations. Ignoring the notice can lead to severe consequences, including additional penalties, interest, and enforcement actions by the IRS.

Don’t let an unpaid balance with the IRS cause you stress. Take action today by verifying your CP90/CP297 notice and exploring your payment options.