How to Respond to the IRS CP297A Notice

IRS CP297A Notice

CP297A means that the IRS has already seized your assets for unpaid payroll taxes – you have the right to appeal, but once the assets are gone, it can be hard to get them back. 

Normally, when you owe the IRS money, they can only take your assets if they give you a 30-day advance warning. However, in the case of a disqualified employment tax levy, the IRS does not have to give you advance warning of the levy. Instead, they can take your assets and notify you afterward. This applies in cases where you owe employment taxes and you have requested a hearing on those same type of taxes in the last two years. 

So, what do you do if you are dealing with Notice CP297A from the IRS? This guide walks through what this notice means and how to respond. Contact Seattle Legal Services to work with a tax professional to resolve your tax problem.

Key Takeaways:

  • Notice CP297A informs you that the IRS has levied your property and explains how to request a collection due process hearing.
  • Employers receive this notice if they have unpaid payroll taxes and have requested a hearing for unpaid payroll tax in the last two years.
  • Assets at risk include bank accounts, real estate, wages, personal property, Social Security income, and more.
  • If you disagree, file an appeal and request a collection due process hearing.
  • If you agree, pay off your debt or apply for a relief option like a payment plan or offer in compromise.

Why Did You Receive IRS Notice CP297A?

You received Notice CP297A because you have unpaid employment taxes (payroll taxes or federal unemployment taxes) and you have requested a pre-levy hearing on payroll taxes in the last two years. This is called a disqualified employment tax levy.

If you recently bought the business from someone else and are using their Employer Identification Number (EIN), you may receive this notice if you currently have unpaid employment taxes and the previous owner requested a pre-levy hearing on payroll taxes in the last two years. 

By the time you receive IRS Notice CP297A in the mail, you should have received a string of notices related to your debt (for instance, notices about the failure to deposit penalty, demands for payment, and other notices about potential asset levies).

What Is a Disqualified Employment Tax Levy?

A disqualified employment tax levy happens when the following two conditions are met:

  • You have unpaid federal employment taxes
  • You (or the previous business owner) have requested a pre-levy hearing on those taxes in the last two years.

In these cases, the IRS does not need to give you a 30-day warning before seizing your assets. Instead, the agency can just move forward with the seizure – unfortunately, that means that you may have a frozen bank account or other seized business assets before you even receive this notice. 

What Happens Before Receiving Notice CP297A

Before you receive this notice, here’s what happened:

  • Sometime in the last few years, you didn’t pay employment taxes. 
  • The IRS sent you collection notices about the employment taxes.
  • Eventually, the IRS sent a Final Notice of Intent to Levy Assets.
  • You requested a CDP hearing to contest the levy. 
  • Less than two years later, you failed to pay employment taxes. 
  • The IRS seized your assets – without warning this time. 
  • Finally, the IRS notified you about the seized assets by sending you a CP297A.

Which Assets Can the IRS Seize?

Seizing your assets, known as a tax levy, could mean these assets are at risk:

With business tax debt, the IRS may also intercept payments from your clients – the agency can even demand that your credit card processor send the payments directly to the IRS rather than to you. In some cases, the IRS can even go into your business, seize the cash from your register, or take your inventory or other assets. 

What Happens to the Assets the IRS Seizes?

The IRS will apply the value of your assets – minus collection costs to your tax debt. For instance, if you owe $60,000 and the IRS seizes $20,000 from your business bank account, the agency will apply the $20,000 to your tax debt. 

If the agency seizes physical assets – such as real estate or business equipment – they will give you an estimated value of the asset. You will have the chance to dispute the estimation if you think it’s being undervalued. Then, the IRS will auction off the asset, and apply the value (minus the cost of seizing the assets and holding the auction) to your tax debt.

After the IRS seizes physical assets, you have a certain amount of time where you can buy back the asset, but you will have to cover the amount the buyer paid and pay fairly high interest to do so. 

Other Types of CP297 Notices

The IRS issues a few different types of CP297 notices. 

  • Notice CP297 – the IRS intends to seize your property to cover your tax debt. 
  • CP297A – The IRS has already seized your assets due to a disqualified employment tax levy.
  • CP297C – The IRS has already seized your assets due to you being a federal contractor.

The IRS can also seize federal contractor payments without advance warning. For instance, if you are a federal contractor and you ignore initial collection notices, the IRS can just move forward with the levy and let you know about it afterward.

What’s Included on IRS Notice CP297A?

Let’s break down everything you’ll find on a CP297A Notice from the IRS:

Notice Details

On the top right-hand corner of the notice, you’ll see the notice type (CP297A), the date, your taxpayer ID number, and a phone number to contact the IRS. You may need this contact information later. Make sure your ID number is accurate.

The first page will also include your name and address then outline that this is a notice of seizure and of your right to a hearing. It will include in large letters, “Amount due immediately” and the amount you owe next to a billing summary. This summary will include your outstanding tax balance and interest charges. The notice then explains that the IRS has issued a levy to collect your unpaid taxes.

Right to a Collection Due Process Hearing

Notice CP297A will also state on the first page that the IRS determined you are “not entitled to a pre-levy hearing because you (or your predecessor) previously requested a Collection Due Process hearing.” But, you can still appeal the IRS’s seizure of your property by requesting a collection due process hearing. This section will state the date by which you must initiate this appeal.

What You Need to Do Immediately

The next page outlines your options for next steps:

  • Pay immediately: 
      • Send the payment by the provided deadline to avoid an additional levy.
      • Request a payment plan to pay in installments, which will stop the IRS from escalating collection actions.
      • Call the phone number provided to talk to the IRS about your options.
  • Request a collection due process hearing:
      • Send in the enclosed Form 12153, Request for a Collection Due Process or Equivalent Hearing, by the deadline provided to the IRS address on the notice. You will be required to provide your reasoning for requesting this hearing. If you don’t do this by the deadline, you will no longer have the right to appeal with a CDP hearing, but you may be able to request an equivalent hearing for up to a year after receiving the CP297A.
  • Federal tax liens:
      • The IRS may file a federal tax lien against your property if it hasn’t already. This is a public record notifying other credits that the IRS has a claim on your assets.
  • Passport Revocation:
    • Another consequence of not paying your tax debt is potential passport revocation. The State Department could deny or revoke your passport after being alerted by the IRS of your tax debt. This could apply if you have “seriously delinquent tax debt” — that over $65,000 as of 2025.

If We Don’t Hear from You

This section outlines what assets could be seized by the IRS, including wages, income, accounts, business assets, personal assets, vehicle, homes, and Social Security benefits.

Penalties

If the IRS has also charged you with tax penalties, this section will outline the type of penalty (failure to pay) and how it calculates the penalty. The notice also includes instructions for requesting penalty abatement if you have reasonable cause, such as a family member’s death, an injury, or a natural disaster. The next section outlines penalty abatement if the IRS provided you with wrong written advice that you followed.

Interest Charges

This section states that the IRS is required by law to charge you with interest when you have outstanding tax debt. It also explains how interest is calculated and when it’s charged.

Additional Information

This last section includes online resources to visit, enclosed documents, and contact information should you need to speak with an IRS agent.

How to Respond to an IRS CP297A Notice

Facing IRS levies feels overwhelming, but you have options to move forward and get back in good standing. Follow these steps when you receive Notice CP297A:

Act Quickly

Your notice will include a deadline for responding, which is typically 30 days from the notice date. This is the time you have to consider an appeal or pay off your tax debt if the IRS has not yet seized your property.

Pay What You Owe

To avoid further actions against your property, pay off your balance right away. Sometimes if you receive Notice CP297, you still have time to take care of your debt before the IRS levies your assets. 

Request a Collection Due Process Hearing

If you want to file an appeal and you disagree with the information on the form, request a collection due process hearing within the allotted 30 days. You will fill out Form 12153, enclosed with your notice, to request this hearing. Send the form to the IRS address provided.

Set Up an Installment Agreement

You can avoid IRS levies and liens by setting up a payment plan and paying off your debt over time. Contact the IRS right away or access your account online to request a payment plan and start paying. 

Generally, in-operation businesses only get two years to pay up to $25,000 in employment tax debt. If you owe more or can’t pay it off in two years, the IRS may deny your request for payments, but you may get approved in rare situations.

Request an Offer in Compromise

Some taxpayers may be eligible for an offer in compromise — an option that allows you to settle your debt for less. You will provide an offer amount along with your financial information to show the IRS that the offer is all you can afford to pay. This arrangement also prevents your property from being seized. Typically, you can only get this option if your business is no longer operating.

Ask for Currently Not Collectible Status

Another tax relief option is currently not collectible (CNC) status. You may qualify if you can show the IRS that you’re dealing with financial hardship that won’t allow you to pay what you owe. Again, you must no longer be in business to qualify.

Reassess Your Business Budget

The IRS is generally more serious about payroll taxes than income taxes. If your business repeatedly fails to pay employment taxes, the IRS will assume that you cannot afford to be in business, and the agency may refuse to work with you on payments and relief options. To get ahead, you may need to reassess your business’s budget – that’s also why you should reach out for professional tax assistance. 

Hire a Tax Expert

You can more easily deal with any tax issue by working with a tax professional. You don’t have to face IRS collections on your own, and an expert can help you apply for the right relief option so you don’t risk losing your assets. Contact a CPA or tax attorney when you need help.

How Seattle Legal Services Can Help

If you receive Notice CP297A in the mail, it’s time to act. This means the IRS has levied your property or will very soon. It’s important to read through your notice carefully, pay off your debt if you can, or file an appeal if you disagree with the details shown. 

The attorneys at Seattle Legal Services can help you respond to IRS notices, negotiate with the IRS, and explain your tax relief options. We can also represent you if you pursue a collection due process hearing.

Get help now to avoid IRS seizure of your assets. Contact us to learn more.