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The IRS issues the Notice CP91/CP298 to warn the taxpayer that if they do not pay their debts, they will effectively levy their social security benefits. This notice, however, may have been issued as the final to a string of others preceding it. Typically, the IRS would contact the taxpayer about certain outstanding debts before issuing the CP91 or CP298.
In which case, once the taxpayer fails to address the previous notices, they then send this notice to state that they are going to take action and that the problem has been escalated. If you happen to be the recipient of a CP91 or CP298, then you might currently feel intimidated, confused, and scared. Before forfeiting to panic we want to ensure that you know, despite the debts owed, the IRS is almost always willing to help a taxpayer rectify their debts. There are quite a few options available to solve this problem—and they do not require you to pay your full withstanding amount within the given deadline.
Read on, as we’ll guide you towards understanding your CP91 notice, and understanding your CP298 notice.
Read the CP91 IRS Notice Carefully
The point of the notice, while stating that the IRS is set to levy your social security benefits, is also to inform you of a certain amount owed. It is paramount that you review the material carefully to ensure that what the IRS is proposing is, indeed, true. You may want to execute a tax return second look, or produce the necessary documents to verify the information.
Let us not forget that the IRS isn’t perfect. They too can make mistakes; from their system mechanics, human error, to freak incidents, they can often miscalculate. This is why it is important to, before responding to the notice, ensure that the information is true.
Pay, If You Can
The best and easiest way to solve this problem is to pay the balance owed. This payment can be made online or via check. Unfortunately, this is not always realistic for the taxpayer at hand, being that financial distress accompanies tax debt. Therefore, there are other options:
Alternative Options
The IRS will often accommodate a taxpayer who is trying to handle their tax debt. If you cannot pay the amount outright, it may be wise to seek IRS offer in compromise help. Or, you can try to apply for an IRS payment plan, which will allow you to pay smaller payments incrementally to cover the entirety of the debt. In rarer cases, the IRS will abate any fees or penalties accrued, and extend the deadline to allot the taxpayer some breathing room.
The Information Is Wrong, What Now?
If you review the IRS notice CP91/CP298 only to find you disagree, then you must take immediate action. First, make copies of all documents that you have which support your claim. Then seek an IRS tax advocate to assist you in correspondence with the IRS, as they will know how to integrate a strategy that will ensure (if you are not mistaken) your problem is rectified.
Can The IRS Levy Your Social Security Benefits?
The IRS can absolutely levy your social security benefits for taxes owed. This is the nature of the received notice, being that the IRS is warning you that if you do not pay, they will levy your social security benefits in an amount equal to or less than the withstanding tax debt.
Can Social Security Benefits be Garnished for State Taxes?
You may find yourself wondering, ‘how do I know if I owe the IRS?’ Once this notice arrives, that question has been answered. Although this is for federal taxes, again, curiosity may have you wondering if the state can levy your social security benefits. In which case, rest assured that the state has no power to levy your social security benefits. Only the IRS—and they will only apply it towards your federal tax debt, federal student loans, or child support and alimony tax.
Can Social Security be Garnished For Back Taxes?
Yes. The IRS can legally garnish your social security benefits to cover back taxes.
How Much Can They Take?
According to the IRS, they can take up to 15% of your social security benefits for unpaid taxes. This is the amount they will levy.
Does the IRS CP91 Have A Deadline?
The IRS notice CP91/CP298 provides a deadline. Typically, there is a thirty-day period for you to take action. If you happen to ignore the notice, then penalties and interest will accrue, and the IRS can move forward in levying your social security benefits. It is important that you never contact the SSA (Social Security Administration) when it comes to a tax matter. They can neither stop nor assist you with your tax debt or the IRS’s intent to levy your benefits.
Can I Handle The Problem Myself?
Either through mailed correspondence or by contacting the number provided on the notice, it is within your realm of capabilities to handle any tax matter. An IRS representative will assist you in your case, provide valuable information, and work with you to resolve the issue.
With that being said, this particular notice (an intent to levy) is quite serious. Whenever the IRS intends to levy any asset (bank account, property, wages, etc.) it means you have failed to correspond, pay, or explain your situation. In which case, being that this notice is a telltale sign of your case being escalated, it is not always wise to deal with the IRS on your own.
Seek A Professional
While there are pros and cons of professional tax preparers, CPAs, and tax advisors, they are often a crucial tool in handling tax debt. Being that this issue is of the utmost importance and the IRS intends to levy your social security benefits, we recommend you seek the help of a professional. They will guide you through these turbulent affairs and ensure that you receive the best possible outcome.
Whatever you decide to do, do not allow the notice to go on unanswered.