CP90/CP297: Final Warning Before IRS Takes Collection Action

CP90/CP297: Final Warning Before IRS Takes Collection Action

Receiving a CP90 or CP297 notice from the IRS means your tax debt is now in a critical stage. This notice is the IRS’s way of informing you that, unless you take immediate action, they may proceed with severe collection actions, such as tax liens, tax levies, or wage garnishments.

The 30-Day Deadline

The IRS allows you 30 days from the date listed on the notice (not the date you receive it) to resolve your tax debt. This deadline is non-negotiable, so it’s essential to act quickly. You have several options for resolving your debt:

1. Pay in Full: If you can afford to pay the full amount, this is the quickest way to stop the collection process.

2. Installment Agreement: If you can't pay the full amount at once, an installment agreement allows you to make smaller monthly payments with minimal interest (typically less than 1%).

3. Offer in Compromise (OIC): If you are facing financial hardship, you may qualify for an OIC. This allows you to settle your debt for less than the full amount the IRS claims, based on your financial situation.

What You’ll Find in CP90/CP297 Notices

These letters are clear about the IRS’s next steps and will contain several important details:

• Previous Attempts: The letter outlines the IRS’s past efforts to reach you and collect the debt.

• Collection Actions: It may warn of impending tax levies, tax liens, or wage garnishments if no action is taken.

• Instructions: The notice will include clear instructions on how to prevent these collection actions from happening.

Don’t Ignore the Letter

If you receive a CP90 or CP297 notice, it’s essential to understand that this is not just a formality. You could still receive this notice even if you've already paid your debt or are making efforts to resolve it. The IRS can mistakenly mark your account as delinquent, which is why it’s crucial to contact them immediately if you believe your account has been wrongly flagged.

Ignoring this notice or failing to act within the 30-day window could lead to serious consequences, including the seizure of assets, such as your bank accounts, real estate, or personal property. If you or someone you know is facing this situation, you should consult a CPA or tax professional as soon as possible to avoid escalating the issue.

Take Action Now

Time is of the essence when dealing with IRS notices like CP90 and CP297. Even if you can’t pay off your tax debt in full, acting fast could prevent the IRS from taking drastic measures to collect your debt. Speaking with a tax professional can help you understand your options and resolve the situation before it's too late.