IRS Notice CP297: Intent to Levy — Business Tax Debt

IRS Notice CP297 is a notice of intent to levy issued for unpaid business taxes — it carries the same enforcement authority as CP504 but is directed at businesses and employment tax debts.

What CP297 Means

CP297 notifies a business owner or responsible party that the IRS intends to levy business assets — including business bank accounts, accounts receivable, and equipment — to collect an unpaid business tax liability. This notice most commonly relates to unpaid payroll taxes (Form 941), employer federal unemployment taxes (FUTA/Form 940), or other business tax balances.

CP297 also serves as a statutory notice under Internal Revenue Code Section 6330, which means it triggers your right to request a Collection Due Process (CDP) hearing before the levy is carried out. This is a significant legal protection that business owners should not overlook.

Business tax debts — especially employment taxes — are treated more aggressively by the IRS than personal income tax debts. The Trust Fund Recovery Penalty (TFRP) can make responsible officers personally liable for the employee portion of unpaid payroll taxes, meaning your personal assets may also be at risk.

Why You Received This Notice

CP297 is issued because:

• Your business has an unpaid federal tax liability (commonly Form 941 payroll taxes or Form 940 FUTA taxes)
• Prior collection notices were sent to the business and the debt was not resolved
• The IRS is escalating to levy action

Key Deadline and Consequences of Ignoring

You have 30 days from the notice date to request a CDP hearing or resolve the debt. If you ignore CP297:

• The IRS can levy your business bank accounts, causing immediate cash flow disruption
• Accounts receivable can be levied, meaning customers must pay the IRS instead of you
• Equipment and other business property can be seized and sold
• The IRS may file a federal tax lien, which becomes a public record and affects your business credit
• Responsible officers (owners, officers, payroll processors) can face the Trust Fund Recovery Penalty, making them personally liable for the unpaid employee share of payroll taxes

What to Do — Step by Step

1. Identify the tax type and period. CP297 will specify which tax periods and tax forms are involved. Confirm the amounts match your business records.
2. File Form 12153 within 30 days if you need time to resolve the situation without the threat of immediate levy. This requests a CDP hearing and pauses enforcement.
3. Pay the balance in full if possible. Business tax debts, especially payroll taxes, carry significant personal liability. Eliminating the debt eliminates that risk.
4. Apply for an installment agreement. Businesses can set up payment plans for unpaid taxes. For employment taxes, the IRS will typically require financial information to evaluate a plan.
5. Address the Trust Fund Recovery Penalty risk. If your business has unpaid payroll taxes, speak with a tax professional immediately about the TFRP and whether you are personally exposed.
6. Get professional representation. Business tax levy situations are complex. An enrolled agent, CPA, or tax attorney experienced in business tax resolution can negotiate on your behalf and protect your interests.

Your Rights

You have the right to:

• A Collection Due Process hearing before any levy is executed
• Propose collection alternatives including installment agreements and hardship status
• Challenge whether the tax was properly assessed
• Appeal a CDP determination to the U.S. Tax Court
• Representation by a qualified tax professional throughout the collection process

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