IRS CP90 Notice - Your Final Warning Before the IRS Seizes Your Assets

Receiving a notice from the Internal Revenue Service (IRS) can be an intimidating experience. Among the various notices the IRS sends, the CP90, formally known as the “Notice of Intent to Levy and Notice of Your Right to a Hearing,” is one of the most serious. This notice is a final warning that the IRS is preparing to seize your assets to satisfy an unpaid tax. Understanding what this notice means and what your rights are is crucial to protecting your property and resolving your tax issues. 

The Legal Authority Behind the CP90 Notice 

The IRS’ authority to levy, or seize, property to collect delinquent taxes is granted by the Internal Revenue Code (IRC). Specifically, IRC Section 6331, “Levy and distraint,” empowers the Secretary of the Treasury to collect unpaid taxes by levying upon a taxpayer’s property and rights to property. However, the IRS cannot simply seize assets without warning. The law requires the IRS to provide the taxpayer with a “notice and demand” for payment. If the taxpayer neglects or refuses to pay the tax within 10 days of this notice, the IRS can then proceed with collection actions. 

Before the IRS can levy, it must send a final notice of intent to levy, which is the CP90 notice. IRC Section 6331(d) mandates that this notice must be given in writing at least 30 days before the levy is made. This 30-day window is a critical period for the taxpayer to take action to prevent the seizure of their assets. The notice must be delivered in person, left at the taxpayer's home or business, or sent by certified or registered mail to their last known address. 

Your Right to a Collection Due Process Hearing 

The most important right that the CP90 notice informs you of is the right to a Collection Due Process (CDP) hearing. This right is established under IRC Section 6330, “Notice and opportunity for hearing before levy.” The CDP hearing provides you with an opportunity to appeal the proposed levy and discuss collection alternatives with an impartial officer from the IRS Independent Office of Appeals.  

To request a CDP hearing, you must submit a written request, typically using Form 12153, “Request for a Collection Due Process or Equivalent Hearing,” within the 30-day period specified in the CP90 notice. It is crucial to meet this deadline, as failing to do so may result in the loss of your right to a pre-levy hearing and your ability to challenge the levy in US Tax Court. 

The Collection Due Process Hearing: What to Expect 

The CDP hearing is an informal proceeding conducted by an appeals officer who has had no prior involvement with your case, ensuring impartiality. During the hearing, the appeals officer is required to verify that all legal and administrative procedures have been followed. 

You can raise any relevant issue at the hearing, including challenges to the appropriateness of the collection action and offers of collection alternatives, such as currently not collectible due to economic hardship, installment agreement or an offer in compromise. You may also challenge the existence or amount of the underlying tax liability, but only if you did not receive a statutory notice of deficiency or did not have a prior opportunity to dispute the liability. 

Consequences of Inaction 

Ignoring a CP90 notice can have severe consequences. If you do not request a CDP hearing within the 30-day period, the IRS can proceed with levying your assets. This can include garnishing your wages, commissions, bonuses, social security benefits, seizing funds from your bank accounts, retirement accounts, investment accounts and taking possession of your personal and real property. Additionally, having a seriously delinquent tax liability can lead to the revocation or denial of your U.S. passport. 

Take Action Now 

If you have received a CP90 notice, it is imperative that you take immediate action. The 30-day window to request a CDP hearing is your best opportunity to resolve your tax issues and prevent the seizure of your income and assets. 

We hope this information has been helpful. For a more in-depth explanation of how to deal with the IRS and fix your tax problems, scan the QR code below or click the button to watch our free video:

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Navigating the complexities of IRS collection actions can be overwhelming. If you need assistance with a CP90 notice or any other tax matter, we are here to help. Book a consultation when you are ready to get started and explore your options.