IRS CP 90: Final Notice of Intent to Levy – How to Protect your Assets

CP90 is a final warning that the IRS will seize your assets if you do not pay. You should not ignore this letter. If you don’t take action within 30 days, your income, retirement benefits, property, bank accounts, and other assets may be at risk. Either contact the IRS to make payment arrangements, appeal, or contact a tax pro for help immediately. Even if you have ignored every other IRS letter, you should not ignore this one.

Key takeaways

• CP90 - Final notice of intent to levy with your right to a hearing.
• When it comes - after several ignored demands for payment, and often after the CP504 notice.
• What to expect - the IRS will garnish wages, freeze your bank account, or seize physical assets without additional warning if you don't make arrangements for your tax debt.
• How to respond - pay in full, set up an installment agreement, or appeal with a Collection Due Process hearing by the deadline on the notice.
• What if you disagree - appeal with a CDP hearing. You can appeal the collection action, and if you haven't had a previous chance to appeal the tax due, you can appeal that as well.

What Is IRS Notice CP90?

This notice is called a Final Intent to Levy notice. This final warning notice fulfills the IRS's legal requirements under US Code 6331 to notify you before seizing your assets. It also explains your right to a hearing to appeal the collection action. 

What assets can the IRS take?

The IRS can take assets that are often untouchable for other creditors, and if they garnish your wages, they can take a larger portion of your paycheck than most other creditors. If you don't pay your taxes, the IRS can seize your wages, bank accounts, money owed to you by third parties (for example, rent paid by your tenants), Social Security income, some pensions, retirement accounts, investment accounts, personal property (except the minimum essentials), business property (there are some exceptions for tools of the trade), and real estate (even including your home in rare situations).

How to Respond to Notice CP90

If you agree with the information in the CP90 notice but you cannot afford to pay in full, here are your options:

• Installment agreement - Make monthly payments on your tax debt. Apply online if you owe less than $50,000, or call the IRS if you owe more and want to set up payments.
• Offer in compromise - Settle for less than you owe, but first, you must prove to the IRS that you are paying the most you can afford based on your income and assets.
• Currently non-collectible status - Get the IRS to stop collection actions against you by proving that you truly cannot pay anything right now.

In all cases, you must make those arrangements before the deadline on the notice, or the IRS will move forward with enforced collection actions. However, you can also appeal the levy as explained in the following section. 

How to Appeal After Receiving CP90

To start the appeals process, complete Form 12153, Request for a Collection Due Process Hearing. Mail the form to the address on your CP90. When you submit an appeal, your case moves from the IRS’s collection department to the appeals department. Typically, that means you get an individual assigned to your case. That can be a lot easier than calling the IRS and dealing with different reps every time.

The CDP hearing is typically just a phone call. During the call, you can explain why you don't want the IRS to levy your assets and talk about payment or relief options. If you haven't previously had a chance to do so, you can also appeal the amount of tax due. If you disagree with the results of the CDP hearing, you have the right to appeal.

What if you miss the CDP hearing deadline? How to request an equivalent hearing 

If you miss the deadline for a CDP hearing, you can request an equivalent hearing for up to a year after the notice was sent. The equivalent hearing also gives you a chance to talk about payment options, but by the time you make the request, the IRS may already be garnishing your wages or seizing assets. Unfortunately, you cannot appeal the results of the equivalent hearing.

What If Someone Is Helping You With Your Taxes?

If you have an accountant, you can submit Form 2848, Power of Attorney, and Declaration of Representation. That gives the IRS permission to talk with your tax professional about your case. It also diverts the collection activity through that person, so you don’t have to deal with calls or letters.

What Happens If You Ignore a CP90 Notice?

Ignoring a CP90 notice can have serious consequences. Thirty days after issuing this notice, the IRS has the right to levy assets, which may include seizing vehicles, property, bank funds, and wage income. Generally, the only exempt assets are essential clothing, a moderate-value vehicle, and a very small amount of income to cover living expenses, plus income that you need to pay court-ordered child support.

Stopping a Levy

If the IRS has already started to levy your assets there are a variety of ways that the levy can be stopped even after it has started. Every person has a unique situation and there are methods to stop a levy depending upon your situation.  For more details on stopping a tax levy after it has already started, please refer to this guide on stopping or releasing a tax levy.

How to Get Help With Your CP90?

Receiving a CP90 can be scary, and if you weren’t worried about the previous notifications you received, you should be worried about this one. The IRS will not send any additional warnings before seizing your assets or contacting your employer to garnish your wages. This is your final notice, and if you don't take action, the IRS will move forward with enforced collections. Luckily, there are accountants and tax professionals who can help you. Start your search below to find a tax professional who has IRS experience - use the filters to narrow down the results to pros who have experience with tax levies.