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IRS Notice CP90: What It Is and What To Do If You Get One!
Taxpayers receive Notice CP90 Final Notice of Intent to Levy and Notice of Your Right to A Hearing when they haven’t resolved their back taxes after repeated reminders from the IRS. CP90 informs them that the IRS intends to levy certain assets to pay for the delinquent taxes. Under a levy, the IRS sells the property and/or assets to pay for the back taxes. It is one of the most damaging IRS collection actions.
Explore Your Notice CP 90 Options
When you receive Notice CP90, you must first read it carefully to understand your options. If you disagree with the IRS’s position, you have 30 days from the date on the notice to dispute the notice in court. This is called the Collection Due Process (CDP). After 30 days, you lose that option and must work with the IRS to resolve the back taxes. To request a CDP, you need to fill Form 12153, Request for a Collection Due Process or Equivalent Hearing. The form should be sent to the address shown on the levy notice. You can also initiate a CDP when you receive the lien notice.
Installment Agreements
If you can pay the full tax debt, but find it more convenient to pay it in installments, you can choose an installment agreement (IA). An IA allows you to pay your tax debt in fixed monthly installments. Depending upon your finances, you can negotiate how much you can pay each month to pay off your tax debt. Due to penalties and interest, it is preferable to pay as much as you can upfront. This will lower the total tax debt amount, and with it, the number of penalties and interest charged.
Offer in Compromise
If you can only pay a partial amount of your back taxes, you may consider applying for an Offer in Compromise (OIC). This plan is only available to those that have the financial capacity only to meet allowable living expenses.
Currently Not Collectible
Even if you cannot pay any amount of your back taxes, you still have resolution options. You can avoid IRS collection actions such as a levy by achieving the status of Currently Not Collectible (CNC). Under CNC, the IRS cannot collect back taxes until your financial situation improves.
After receiving Notice CP90, immediate action should be taken to resolve the tax debt, either by paying the full-back taxes owed or by pursuing a payment plan. A levy can be financially devastating. Remember, to stop a levy, you have at least 30 days from the date on the Notice CP90 to resolve your tax debt.