The IRS Notice CP92 informs you that they have levied your state tax refund to pay for other taxes you owe. The notice also gives option for you to appeal this seizure (Collection Due Process) if you do not agree. However, it is not always advisable to appeal this action taken by the IRS, principally because you extend the statute of limitations for all reasons, even if the appeal is unsuccessful. Plus, appeals are often in vain.

The IRS usually sends out millions of letters to taxpayers yearly. Almost half of those letters are notices that need the taxpayer to file a Collection Due Process Appeal or a CAP Appeal. The filing of a Collection Due Process appeal is of great essence because it protects the taxpayer’s right to petition the United States Tax Court. The more suitable responses are often methods to lessen or get rid of the debt such as Tax Court, penalty abatement, claim for refund or even amended return to reduce or dissolve this tax liability. Other possible solutions are partial or full pay installment agreement or an Offer In Compromise.

What is a State Tax Levy?

States can also issue levies to collect on this type of tax debt as tax levies are not restricted to federal tax debt.. Many people who owe taxes to the federal government also owe taxes within the state where they live in. Each state has its laws and process for collection, although many state agencies operate in a similar way to the IRS when issuing liens and levies. However, some states use their systems, so it’s important to be enlightened of how your state will collect on any taxes you owe. It’s also vital to bear in mind that you will be required to fill out different paperwork and take action with a different agency to set up an installment plan, file an appeal, or propose an offer in compromise.

If you require tax forms for your state, you can get access to all the necessary forms in one place. Just like the IRS, state governments can evaluate interest and penalties on any tax debt you owe. Furthermore, states can withdraw licenses issued by other agencies, such as driver’s licenses, hunting and fishing licenses, and even professional licenses. It’s not common for a state’s government to revoke a professional license since that could impact a taxpayer’s capability to pay back their debt, but it is an alternative they have if the taxpayer is not responding to other methods of collection. Be aware of what consequences your state government can impose for not being able to pay your debt.

IRS Tax Levy Process

The IRS will undergo several relevant steps before issuing a levy. The first step usually taken is evaluating the tax you owe. This step normally takes place after you file your tax return, although if you do not file a return required, the IRS can prepare a substitute for tax return (SFR) on your behalf. Either a filed tax return or an SFR can commence the levy process. If the IRS confirms that you owe taxes, they will send a tax bill to you that demands payment.

When you receive a tax bill from the IRS, it is your duty to take action by paying your owed taxes or looking into other options. If you find it difficult to pay the full amount due, you can set up an installment plan, if you are eligible, or submit an offer in compromise. You can also appeal if you have doubts regarding the amount of tax debt.

If you don’t take any action, this is regarded to be a failure to pay the owed taxes. The IRS now possesses the right to levy your property in an attempt to collect. In most circumstances, you will receive a Final Notice of Intent to Levy and Notice of Your Right to a Hearing 30 days before seizing your assets. After that notice as been sent, the IRS then has the legal right to seize any funds in your financial accounts, your personal vehicle(s), real estate, and other funds and assets.

How to Respond to IRS Notice CP92

Instead of intensifying your problem with irrelevant steps, it is ideally preferable to device ways to lessen or get rid of the debt. It is wise to use other methods, such as Court, penalty abatements, claims for refund or even amended returns to reduce or dissolve this tax liability. Alternatively, you can easily go through the usual channels of IRS Collection to resolve the account. IRS Revenue Officers can achieve as much for you (& more in some circumstances) than Appeals. You might get a refund of these state taxes seized but don’t be shocked if it is lost.

What to Do Next

The next step to take is to establish if the notice was as a result of a mistake. You need to confirm if you have an outstanding tax liability, or if you have an unfiled or incomplete returns

Is There a Time Limit?

Yes, there is. Every letter or notice sent from the IRS or State will indicate a date on which you must contact them.  If you need extra time, call the number on the notice or letter and request an extension. Ensure that you DO NOT ALLOW the time to expire without making contacting them or hiring a tax representative to contact them for you.

What You Must Not Do

What you must not do is nothing.  Your tax problems will only aggravate if you do not pay attention to them. If you cannot pay, there are a number of possible solutions available to those who are otherwise in compliance.  In compliance means having all tax returns filed and any balances paid or on a payment plan.  If you have outstanding debts or unfiled returns, you need to hire a Certified Tax Resolution expert.

Get Some Assistance

If you finding it difficult in addressing the issue(s), you are having unfiled return/unpaid balances or you just do not feel confident, get a Tax resolution expert to represent you.  Working with a Certified Tax Resolution Specialists aids you in resolving your issue(s) quickly.  Most importantly, you don’t have to talk to the IRS or State; they can speak on your behalf.