Gary Bode, CPA: IRS Notice CP 297A deserves professional attention. For a free initial phone consult, call 399-2705.
I’ll discuss some standard tactics a tax CPA might take to counter CP 297A, Notice of Levy and Notice of Your Right to a Hearing, but you can’t reasonable rely on this post alone for a cause of action. It is just a general discussion.
Brief Background of IRS Notice CP 297A
CPAs think of IRS Notice CP 297A as the 14th round of a heavyweight fight against the IRS. By the time you receive Notice CP 297A, they usually have a federal tax lien in place. Notice CP 297A means the IRS can and will levy company assets in 30 days.
What can they Levy?
Generally they start with seizing funds. This might be from governmental contract revenues, your company’s bank accounts, etc.
If that doesn’t satisfy the lien amount, they’ll go after hard assets, like your equipment. This they will sell and apply the proceeds to your account. They usually sell it for less than you could have gotten for it.
What can my Company do About IRS Notice CP 297A?
It depends. The IRS probably doesn’t want to close down a business. Usually they have just lost patience with you. The following list is in no particular order:
- Correctly calculate what is actually due to the IRS. Don’t just take their word for it. Notice CP 297A gives their version.
- Ask to have an actual IRS agent assigned to your case, if you don’t already have one. The IRS relies on its automated collection system for the process leading up to Notice CP 297A, especially if the amounts are “small”.
- Read Publication 594, What You Should Know About The IRS Collection Process. They have to follow the rules. But any CPA would tell you it pays to watch them. While you have recourse against violations, it may be too late to actually help your company.
- File Form 12153, Request for a Collection Due Process Hearing, if the IRS demand is incorrect. I wouldn’t advise using this as a delay tactic.
- Read Publication 1660, Collection Appeal Rights, in case you lose the Collection Due Process Hearing.
- Make an Offer in Compromise. This is the infamous “pennies on the dollar” technique. Restrictions and red tape rule here. Hire a CPA, specifically us if you don’t already have a CPA or want a new perspective.
- Setup an Installment Agreement with the IRS.
- Setup a partial payment Installment Agreement. You’d have to prove you can’t meet the terms of a normal Installment Agreement.
- Pay the IRS in full. I understand this is unrealistic. But sometimes families will help. You might have equity in your home to tap. You can sell company assets and at least get more for them then the IRS would at auction.
- Post a bond for the amount. Again families may help.
- Call the Taxpayer Advocate.
- Ride out the Statute of Limitations. But the IRS is good at extending these.
- Think about re-structuring your company to function after CP 297A consequences play out.
- Consider bankruptcy. Talk to an attorney. Generally you can’t discharge taxes through bankruptcy. And if it is possible, timing is crucial. The threat of bankruptcy might make your IRS Agent amenable to other alternatives listed above.
- Hire a new CPA who might be able to bargain for additional time.
We’re a back tax and tax audit CPA firm in Wilmington NC. Our virtual office allows us to offer excellent service to long distance and international clients. Please read any of our posts to help gauge our expertise and proactive philosophy. We offer a free initial phone consult. (910) 399-2705
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