IRS Notice of Intent to Offset Checklist
IRS Notice CP 297 and Notice CP 298 are formal levy notices that represent a critical stage in the IRS collection process requiring immediate attention. Notice CP 297 warns that the IRS intends to levy assets such as bank accounts, wages, or other property to satisfy unpaid federal tax debt. At the same time, Notice CP 298 specifically addresses the IRS's intent to levy up to
15 percent of Social Security benefits.
These notices arrive after earlier IRS collection attempts have failed and provide you with
Collection Due Process hearing rights under Internal Revenue Code section 6330, giving you exactly 30 days from the notice date to request a hearing before the IRS can proceed with levy action. A levy is the legal seizure of property to satisfy a tax debt.
Who Should Use This Checklist
Use this checklist if you received IRS Notice CP 297 or CP 298 and need to understand your rights and response options before levy action begins against your assets or benefits. The guide applies when you have unpaid federal tax debt, and the notice warns of impending levy, whether you are uncertain about owing the stated debt or cannot pay the full amount immediately.
Preparation for a Collection Due Process hearing or exploration of payment alternatives becomes essential once these notices arrive, and this checklist provides the framework for both.
State tax collection, private creditor actions, Treasury Offset Program refund offsets, or situations where the IRS has already completed levy action require separate guidance and are not covered here.
Your Rights and Immediate Actions
The right to request a Collection Due Process hearing exists for 30 days from the date of your levy notice, and the IRS strictly enforces this deadline with no exceptions for late filing. Filing
Form 12153, Request for a Collection Due Process or Equivalent Hearing, preserves your ability
to challenge the levy before it occurs and suspends levy action while the hearing and any subsequent appeals are pending.
During a CDP hearing, you can dispute the amount owed if you have not had a prior opportunity to do so, propose collection alternatives, including installment agreements or offers in compromise, and challenge whether the IRS followed proper procedures before issuing the levy notice. An independent Appeals officer will review your case based on the law and your individual circumstances.
Step-by-Step Response Process
1. Document the Notice Date and Levy Details
Record the date shown on your notice, not the date you received it, because the 30-day period begins from the notice date printed on the document. Write down the tax periods and amounts listed on the notice and verify that your name, address, and Social Security number are correct.
2. Gather Supporting Documentation
Collect copies of your tax returns for the years in question and locate any payment records, including canceled checks, money order receipts, or electronic payment confirmations. Find any prior IRS correspondence about the debt and assemble evidence showing why you dispute the debt if you believe the amount is incorrect.
3. Determine Your Response Strategy
Disputing the underlying tax debt requires you to prepare an explanation for the Collection Due
Process hearing with specific evidence supporting your position. Proposing a payment arrangement requires you to complete Form 433-A or Form 433-B to document your financial situation so the IRS can evaluate which collection alternatives you qualify for.
4. File Form 12153 Within 30 Days
Complete Form 12153 and clearly state the reason you are requesting a hearing, explaining whether you dispute the tax liability, want to propose a collection alternative, or believe the levy is inappropriate. Mail the form by certified mail with return receipt requested to the address shown on your levy notice, and keep copies of everything you send and the certified mail receipt.
5. Monitor Your Account and Follow Up
Contact the IRS using the number on your notice to confirm they received your Form 12153 and ask whether the hearing request was processed and whether the levy action has been suspended. Document the name of any IRS employee you speak with and the date of the call, and continue to check your accounts and income sources to ensure no levy has been placed.
Collection Alternatives You Can Propose
You can request an installment agreement to pay your tax debt over time if you cannot pay the full amount immediately, and the IRS will evaluate your financial situation to determine whether you qualify for monthly payments. Proposing an offer in compromise becomes an option if you believe you do not owe the full amount or cannot pay it due to exceptional circumstances that affect your ability to satisfy the debt.
Requesting a currently not collectible status may provide relief if paying the debt would cause economic hardship and leave you unable to meet basic living expenses. Each alternative requires complete financial disclosure and supporting documentation.
Common Mistakes That Reduce Your Options
Ignoring the notice eliminates your right to a pre-levy Collection Due Process hearing, and once
30 days pass without filing Form 12153, the IRS can proceed with levy action, and you lose the automatic suspension protection. Sending Form 12153 by regular mail without tracking means you cannot prove timely filing if the IRS claims they never received it, which leaves you without a remedy if your hearing request is denied for late filing.
Failing to include clear reasons for your hearing request or complete financial documentation delays the process and weakens your position. Continuing to ignore IRS collection notices after receiving CP 297 or CP 298 moves the case toward immediate enforcement action and eliminates your remaining options.
State Tax Refunds and the IRS
The IRS can levy state tax refunds through the State Income Tax Levy Program in participating states, and this levy action typically occurs after the state processes your return but before you receive the refund. Notice of the levy comes from both the state and the IRS, though both notices arrive after the levy has already been placed on your refund.
You have post-levy Collection Due Process hearing rights to dispute the action and explore alternatives, but the levy remains in effect while your hearing is pending. State refunds are not protected from federal tax collection through this program.
After Missing the 30-Day Deadline
You can request an equivalent hearing within one year from the date of the CDP levy notice if you missed the initial 30-day period for requesting a Collection Due Process hearing. An equivalent hearing provides the same review by an Appeals officer, but does not suspend levy action and does not give you the right to appeal to the Tax Court.
The IRS can continue collection activity while your equivalent hearing is pending, which means levy action may proceed even as Appeals reviews your case. If you receive a determination from a Collection Due Process hearing that you disagree with, you generally have 30 days from the determination date to petition the United States Tax Court for judicial review.
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