The official meaning of this IRS Notice is the “IRS Notice CP298 Balance Due – Intent to Levy Social Security Benefits”. This letter is to notify taxpayers of the IRS intent to levy up to 15% of the taxpayer’s social security benefits for unpaid taxes.  The IRS Notice CP298 can also be called IRS Notice CP91.

There are reasons why taxpayers would receive the IRS Notice CP298. It could be that their businesses owe a balance that is due or they have not responded to letters sent by the IRS requesting full payment of the balance due. This is also the final notice the IRS will send before filing a levy against 15% of your social security benefits. This type of IRS Notice mainly concerns unpaid business taxes. Other tax problems may include business penalties.

This notice is usually a final warning to a series of other warnings preceding it. The IRS would have definitely contacted the taxpayer about certain outstanding debts before issuing the CP298 or CP91 Notice. When taxpayers fail to address the previous warnings sent by the IRS, the IRS sends the CP298 notice to let taxpayers know that the situation has escalated and drastic measures would be taken. If you fall into this situation, you may immediately feel confused, terrified and intimidated. The IRS assures taxpayers that there is absolutely no need for panicking. This just means the tax issue will be sorted once and for all. Despite the debts taxpayers may owe, the IRS in most cases, may be willing to assist them rectify their tax debts.

STEPS TO HELP SOLVE THIS PROBLEM

There are few options available to taxpayers struggling with this problem. They indicate how to address IRS Notice CP298 and we would emphasize on them below:

  • Review the IRS Notice CP298 – This is the first and the important step to take after receiving this notice from the IRS. Instead of just looking at the notice and jumping into conclusions, it is important you settle down and review the letter carefully. This is to ensure that what the IRS sent is actually correct. You will need to take a second look at your tax return and produce necessary documents that verify the information provided on the notice. You need not forget that the IRS is also bound to make mistakes. No institution’s performance is perfect. Mistakes could have been made from their mechanical systems, possibly human error of some sort, miscalculations and other minor incidents. For this exact reason, it is quite important to ensure that the information on the notice is true before taking any actions.
  • Make arrangements to pay –Taxpayers should endeavor to pay the balance due if they are able to. This is the best and easiest way to make this issue go away. Payment can be made online. In most cases, this doesn’t go the way of the taxpayers because the taxes they owe is accompanied by financial discomfort. If that is the case, there is another solution.
  • Offer In Compromise – The IRS will try their best to accommodate taxpayers struggling to handle their tax debts. Most taxpayers are unable to pay the full amount. For taxpayers who fall under this category, it is advisable to seek the help of “IRS Offer in Compromise”. You can also apply for a specific IRS payment plan. This enables taxpayers to pay small amounts incrementally until their debts are cleared. The deadline may be extended to give taxpayers some breathing space.
  • Dispute the taxes you owe – After you may have read the letter sent by the IRS and confirmed its authenticity, you will have to debate the taxes you owe and separate from the taxes you have already paid. This makes it easier to address the situation.
  • Dispute the possible penalties – It is important to know the possible penalties you may face if things go south after receiving the IRS Notice. You will need to seek the help of a tax professional to assist you.

If the information provided on the notice CP298 is wrong after you have reviewed it, it is advisable you take immediate action. Firstly, you will need to make copies of all your documents to correspond with your side of the story. After that, you seek an IRS tax advocate to assist you with the IRS. Their job is to use a procedure that will ensure that your problem is solved assuming your claim is correct.

However, if it turns out that the IRS was correct after-all and you are unable to pay the taxes owed, the IRS can and will levy your social security benefits for taxes owed. That is the aim of the notice in the first place, being that the IRS is issuing a warning to you that if you don’t pay, they will levy your social security benefits. The amount to be collected will be equal to or less than your tax debt.

The social security benefits that will be levied are for federal taxes. Taxpayers may be wondering if the state can also levy their social security benefits. The answer to that is NO. Only the IRS can levy your social security benefits and they apply it towards your federal tax debt, federal student loans, child support, etc.

Taxpayers should not be tempted to handle the problem themselves. This is because this particular notice is quite serious and when the IRS intends to levy any asset (bank account, wages, properties, etc.) it means that you have failed to respond to situation or pay taxes owed. This notice is just an official way of saying that your case has escalated so it is not always wise to deal with the IRS on your own.

The best thing to do after receiving the IRS notice CP298 is seek a tax professional. They could be tax preparers, certified attorneys, tax advisors. Taxpayers should also watch out for scam tax preparers so as to avoid double trouble in dealing taxes. Real tax professionals will guide you through your situation and ensure that you receive the best possible outcome from your situation.

NOTICE DEADLINE – 30 days

TAX TIP– Whatever happens; never leave the IRS notice unanswered.