The CP297 is the CP90 for businesses. It's the IRS's final notice of intent to levy against a business entity for unpaid taxes, and it triggers your right to a Collection Due Process hearing. You have 30 days from the date on the notice to file Form 12153.
For business owners, the CP297 often involves employment taxes. Unpaid 941 liabilities, 940 liabilities, or other payroll tax debts. These are the debts the IRS takes most seriously because they involve trust fund taxes, money withheld from employees that was supposed to be deposited with the IRS.
What the IRS Can Levy
A business levy is devastating. The IRS can levy business bank accounts, freezing operating funds. They can levy accounts receivable, intercepting payments from your customers before they reach you. They can seize business equipment and inventory. For sole proprietors, they can also levy personal assets because there's no legal separation between the business and the owner.
A single bank levy can shut down a business overnight. Payroll doesn't get met. Vendors don't get paid. Operations stop.
CDP Hearing Strategy for Businesses
The CDP hearing for a business follows the same process as for individuals, but the financial analysis is more complex. You'll need to provide business financial statements, profit and loss statements, accounts receivable and payable aging, equipment lists, and evidence of necessary business expenses.
The IRS uses Form 433-B (Collection Information Statement for Businesses) to evaluate your business's ability to pay. The goal is to demonstrate either that the business can't afford to pay more than what you're proposing, or that aggressive collection would destroy a viable business and ultimately reduce the amount the IRS collects.
Employment Tax Considerations
If the CP297 involves employment taxes, the IRS considers these "priority" debts. Trust fund taxes get special treatment because they represent money that belongs to employees and the government. The IRS is less willing to accept low-payment installment agreements or offers in compromise for employment tax debts, and they'll often pursue the Trust Fund Recovery Penalty against responsible individuals simultaneously.
If your business received a CP297, call us immediately at (813) 229-7100. The 30-day deadline is the same, but the stakes for business owners are higher.