CP298 Notice: How to Avoid a Social Security Levy

Last updated 11/01/2024 by

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Summary:

The IRS issues a CP298 Notice when a taxpayer has unpaid taxes, and the IRS intends to levy 15% of their Social Security benefits to cover the outstanding debt. This notice indicates that prior attempts to contact the taxpayer were unsuccessful, and it serves as a final warning before action is taken. Taxpayers have 30 days to respond and can either pay the debt, set up a payment plan, or appeal if they disagree. Ignoring the notice may result in penalties, and taxpayers must contact the IRS—not the Social Security Administration—for assistance.

Receiving a notice from the IRS can be intimidating, especially when it threatens to levy your Social Security benefits to cover unpaid taxes. A CP298 Notice is a serious warning that the IRS intends to claim up to 15% of your Social Security income to settle a tax debt. If you’ve received this notice, it means the IRS has been unsuccessful in its attempts to collect the debt through previous means, and now they plan to take further action. This article will walk you through what a CP298 Notice is, how it impacts you, and the steps you can take to resolve the situation.

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What is a CP298 Notice?

A CP298 Notice is a formal notification from the IRS informing a taxpayer of its intent to levy (or seize) a portion of their Social Security benefits due to unpaid taxes. The IRS typically uses this notice as a last resort when previous efforts to collect the tax debt have failed.

Understanding the IRS’s intent to levy

The term “levy” refers to the legal seizure of property or assets to satisfy a tax debt. In the case of a CP298 Notice, the IRS intends to levy up to 15% of your Social Security benefits until your tax debt is paid off. While this percentage may seem small, it can have a significant impact on individuals who rely on Social Security as their primary or sole source of income.

Why was a CP298 Notice issued?

The IRS issues a CP298 Notice when taxpayers fail to respond to previous notices about their unpaid taxes. Before a CP298 is sent, the IRS typically sends other notices such as CP14, which is the first notice informing you of a balance due. If the taxpayer doesn’t respond, the IRS escalates the situation, eventually issuing the CP298 as a final warning before initiating the levy process.

Struggling with IRS notices? If you’ve received an IRS letter and aren’t sure how to handle it, you might want to explore professional tax relief options. Optima Tax Relief has helped thousands of people resolve their tax issues and get back on track with the IRS. Learn more about how they can assist you with your situation.

Pro tips

Prioritize seeking professional advice: If you’re overwhelmed by tax notices, consulting a tax attorney or CPA can give you the best path forward, especially if you’re considering disputing the IRS’s claim.

How the CP298 Notice affects you

The CP298 Notice indicates that the IRS is serious about collecting your unpaid tax debt, and their next step will be to levy your Social Security benefits. This action can reduce your monthly income, making it harder to meet your living expenses. Here’s a breakdown of how this might affect you:

Immediate financial impact

If you rely on Social Security to cover basic expenses like housing, food, and medical care, losing 15% of that income can create financial strain. For example, if you receive $1,500 per month in Social Security benefits, the IRS can seize $225 each month until your tax debt is cleared. This reduction can continue indefinitely until the debt is paid off or another arrangement is made.

Possible penalties and fees

Beyond the levy, failure to address the CP298 Notice can result in additional penalties and interest on the unpaid tax balance. This means your debt could grow larger, even as the IRS takes a portion of your Social Security benefits each month.

Pro tips

File all past tax returns: If you have unfiled tax returns, file them immediately. Filing missing returns is often required before setting up a payment plan or other resolution with the IRS.

How to respond to a CP298 Notice

Upon receiving a CP298 Notice, you have several options to resolve the issue. It’s crucial to act promptly—usually within 30 days of receiving the notice. Here’s what you should do:

Step 1: Carefully read the notice

Your first step should be to thoroughly read the CP298 Notice. The notice will outline how much you owe, the steps the IRS has already taken to contact you, and what actions you can take next. Pay close attention to the deadline for responding.

Step 2: Review your tax records

Before deciding how to proceed, review your own tax records to confirm the amount owed. If you believe the IRS has made an error, you may want to dispute the notice (more on that below). It’s important to ensure that all your tax filings and payments are up to date.

Step 3: Take action before the deadline

There are three primary ways you can respond to a CP298 Notice:
1. Pay the amount in full: If possible, paying the full amount you owe will stop the IRS from levying your Social Security benefits. You can pay online through the IRS website, by mail, or through other approved payment methods.
2. Request a payment plan: If you can’t afford to pay the full amount immediately, you can request a payment plan or installment agreement. This allows you to pay off your debt over time while avoiding a levy on your benefits.
3. Dispute the notice: If you believe the amount the IRS claims you owe is incorrect, or if you’ve already paid the debt, you can file an appeal. You’ll need to provide evidence to support your claim, such as bank statements or receipts showing payment.

What to do if you cannot pay the amount owed

Not everyone can afford to pay their tax debt in full, especially those on a fixed income like Social Security. Fortunately, the IRS offers several options for taxpayers who are unable to pay their full balance.

Consider an installment agreement

An installment agreement allows you to pay off your tax debt over time in smaller, more manageable amounts. The IRS offers both short-term (120 days or less) and long-term payment plans. The best plan for you will depend on your financial situation and the amount owed.

Look into an offer in compromise

An Offer in Compromise (OIC) is an agreement between a taxpayer and the IRS that allows the taxpayer to settle their debt for less than the full amount owed. To qualify, you must demonstrate that paying the full debt would cause financial hardship. The IRS will review your income, expenses, assets, and ability to pay before determining whether to accept your offer.

Request a temporary delay in collection

If you can’t pay the debt and don’t qualify for an installment plan or OIC, you can request a temporary delay in collection. This option may be granted if the IRS determines that enforcing the levy would cause significant financial hardship. Keep in mind that interest and penalties will continue to accrue during the delay.

Pro tips

Monitor your Social Security benefits: Regularly review your Social Security benefit statements to track any changes that might result from an IRS levy, and respond to any discrepancies immediately.

Who should you contact about a CP298 Notice?

While the CP298 Notice involves Social Security benefits, it’s important to remember that this is a tax issue, not a Social Security issue. Here’s who you should contact for assistance:

Contact the IRS directly

If you receive a CP298 Notice, your first point of contact should be the IRS, not the Social Security Administration (SSA). The SSA has no authority to resolve tax disputes or stop the IRS from levying your benefits. The notice will provide a contact number for the IRS, or you can visit their website for more information.

Get professional tax help

If you’re unsure how to proceed or need help navigating your options, consider contacting a tax professional. A Certified Public Accountant (CPA) or tax attorney can guide you through the process and help you negotiate with the IRS. They can also help if you need to file an appeal or request a payment plan.

Looking for the best way to reduce your tax burden? We’ve compiled a list of the Best Tax Relief Companies to help you navigate tax challenges and save money. Click here to discover trusted experts who can assist you with tax resolution, IRS negotiations, and more!

Frequently asked questions

Why did I receive a CP298 Notice?

You received a CP298 Notice because the IRS has determined that you owe unpaid taxes, and they have been unable to collect the debt through previous means. The notice informs you that the IRS plans to levy 15% of your Social Security benefits to settle the debt.

How long do I have to respond to a CP298 Notice?

Typically, you have 30 days from the date on the notice to respond. It’s important to check the specific deadline on your notice and take action as soon as possible.

Can the IRS really levy my Social Security benefits?

Yes, the IRS has the legal authority to levy up to 15% of your Social Security benefits if you have unpaid tax debt. However, you can avoid this by paying the debt in full, requesting a payment plan, or filing an appeal.

What should I do if I disagree with the amount owed on the CP298 Notice?

If you disagree with the amount the IRS claims you owe, you have the right to dispute it. You can file an appeal and provide documentation to support your claim. This may include bank statements, proof of prior payments, or other relevant financial records. Be sure to respond within the time frame provided in the notice to avoid the levy.

What if I can’t afford to pay my tax debt?

If you can’t afford to pay the full amount, you have several options. You can request an installment plan to pay the debt over time, explore an Offer in Compromise to settle for less than the total amount owed, or request a temporary delay in collection if paying immediately would cause financial hardship. Communicating with the IRS is essential to exploring these options rather than ignoring the notice.

Can the Social Security Administration stop the IRS from levying my benefits?

No, the Social Security Administration (SSA) does not have the authority to intervene in tax matters or stop the IRS from levying your benefits. You must contact the IRS directly to resolve your tax debt and explore payment options or to dispute the levy.

What happens if I ignore the CP298 Notice?

Ignoring a CP298 Notice can result in the IRS levying 15% of your Social Security benefits, accumulating additional penalties and interest, and losing your appeal rights. It is critical to respond promptly to avoid these outcomes and resolve the issue before the IRS takes action.

Can I negotiate with the IRS to reduce the levy?

Yes, the IRS may be willing to negotiate a payment plan, reduce penalties, or offer an alternative arrangement depending on your financial situation. Contact the IRS as soon as possible to discuss your options, which may include an installment agreement or Offer in Compromise.

Need help understanding other IRS letters and notices? Visit our comprehensive guide to IRS Letters and Notices or search for the document you received in the table below.

IRS Letter or Notice Number

Notice Description

CP01	The IRS verified your claim of identity theft and will monitor your account.
CP01H	The IRS received a tax return with a social security number that belongs to a dead person.
CP02H	Money is due on an amended return based on a grant received due to Hurricane Katrina, Rita, or Wilma.
CP03C	You received the First-Time Homebuyer Credit for a house you purchased.
CP04	You may be eligible for tax deferment because either you or a spouse served in a combat zone, a qualified contingency operation, or a hazardous duty station during the tax year specified on your notice.
CP08	You may be entitled to additional money due to the Additional Child Tax Credit.
CP10	Your tax return changed due to a miscalculation, and the refund you wanted to apply to an estimated tax payment has changed.
CP10A	Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment has changed.
CP11	You owe money because the IRS amended your return due to a miscalculation.
CP11A	Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment also changed.
CP11M	Your tax return changed due to a miscalculation of the Making Work Pay and Government Retiree Credit, and the refund you wanted to apply to an estimated tax payment has changed.
CP12	You are due a bigger refund because the IRS corrected one or more mistakes on your tax return.
CP12A	The IRS made changes to correct the Earned Income Credit (EIC) claimed on your tax return.
CP12E or CP12F	The IRS corrected a miscalculation on your return.
CP12M	The IRS made changes to the computation of the Making Work Pay and/or Government Retiree Credits on your return.
CP12R	The IRS made changes to the computation of the Rebate Recovery Credit on your return.
CP13	The IRS made changes to your return due to a miscalculation. There is no refund or amount due. Your balance is zero.
CP13A	The IRS made changes to your return due to a miscalculation of the Earned Income Credit. There is no refund or amount due. Your balance is zero.
CP13M	The IRS made changes to your return due to a miscalculation of the Making Work Pay credit or the Government Retiree Credit. There is no refund or amount due. Your balance is zero.
CP13R	The IRS made changes to your return due to a miscalculation of the Recovery Rebate Credit. There is no refund or amount due. Your balance is zero.
CP14	You owe money on unpaid taxes.
CP16	The IRS made changes to your return due to a miscalculation. The refund you were due was applied to other tax debts.
CP21A	You owe money due to the changes you requested that the IRS make on your tax returns.
CP21B	You are due a refund due to the changes you requested that the IRS make on your tax returns. The money should arrive within 2 to 3 weeks.
CP21C	The IRS made the requested changes to your tax return. You will not receive a refund, and there is no tax due. Your balance is zero.
CP21E	As a result of your recent audit, the IRS made changes to your tax return, and you owe money as a result of those changes.
CP21I	The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes.
CP22A	The IRS made the changes you requested, and you owe money as a result.
CP22E	As a result of your recent audit, the IRS changed your tax return, and you now owe money.
CP22I	The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes.
CP23	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You owe taxes due to these changes.
CP24	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes.
CP24E	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes.
CP25	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You are not due a refund, nor do you owe any money. Your balance is zero.
CP31	You need to update your address because your refund check was returned to the IRS.
CP45	The IRS was unable to apply your overpayment to your estimated tax as you requested.
CP49	The IRS used all or part of your refund to pay a tax debt.
CP53	Your refund check will be sent by mail because the IRS can’t provide your refund through direct deposit.
CP57	The bank declined your payment, so the IRS was unable to draft funds from your bank account.
CP71	A reminder of the amount you owe in tax, penalty, and interest.
CP71A	A reminder of the amount you owe in tax, penalty, and interest.
CP71C	A reminder of the amount you owe in tax, penalty, and interest.
CP71D	A reminder of the amount you owe in tax, penalty, and interest.
CP88	The IRS is holding your refund because you haven't filed one or more tax returns, and it believes you will owe tax.
CP90	The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy in a Collection Due Process hearing.
CP91	The IRS will levy up to 15% of your social security benefits for unpaid taxes.
CP120	The IRS needs documentation of your tax-exempt status.
CP120A	Your organization’s tax-exempt status has been revoked because it failed to file a Form 990 series return for three consecutive years.
CP130	You may no longer need to pay the Alternative Minimum Tax (AMT) because your tax return filing requirements changed.
CP152	The IRS received your return.
CP153	The IRS will send your refund by mail because your direct deposit did not go through.
CP161	You have an unpaid balance due to the IRS.
CP166	Your monthly payment to the IRS did not go through due to insufficient funds in your bank account.
CP178	You may no longer owe excise tax because your tax return filing requirements changed.
CP231	You need to update your address because your refund was returned to the IRS.
CP259	You did not file the business tax return identified in the notice.
CP259A	You should have filed these forms but did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax, or Form 990-N (e-Postcard).
CP259B	The IRS requires you to file these forms but did not – Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.
CP259C	The IRS believes that you are a private foundation, but did not file the required Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.
CP259D	You must file this form, but you did not – Form 990-T, Exempt Organization Business Income Tax Return.
CP259E	You should have filed this form, but you did not – Form 990-N (e-Postcard) or Form 990/990-EZ, Return of Organization Exempt From Income Tax.
CP259F	The IRS requires you to file this form but did not – Form 5227, Split-Interest Trust Information Return.
CP259G	The IRS requires you to file this form, but you didn’t – Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations.
CP259H	As a tax-exempt political organization, you must file this form, but you did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax.
CP276A	You submitted your tax liability schedule incorrectly. The IRS typically charges a Federal Tax Deposit (FTD) penalty for this but did not this time.
CP276B	The IRS did not receive the correct amount of tax deposits. It normally charges a Federal Tax Deposit (FTD) penalty but did not this time.
CP297	The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing.
CP297A	The IRS has levied your assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing.
CP298	The IRS notifying you of its intent to levy up to 15% of your social security benefits for unpaid taxes.
CP501	You have a balance due on one of your tax accounts.
CP503	You have an unpaid balance on one of your accounts, and the IRS has not heard from you.
CP504	You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy your state income tax refund to apply it to the amount you owe.
CP504B	You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy certain property or rights to property to apply it to the amount you owe.
CP521	A reminder that you have an installment agreement payment due.
CP523	You have defaulted on your payment agreement. Therefore the IRS is terminating the agreement and will levy your assets.
CP601	Usted tiene un saldo pendiente de pago (dinero que le debe al IRS) en una de sus cuentas contributivas.
CP603	No hemos recibido respuesta de parte de usted y todavía tiene un saldo sin pagar en una de sus cuentas contributivas.
CP604	Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará cualquier reembolso de impuestos estatales al que tenga derecho y aplicarlo al pago de su deuda.
CP604B	Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará ciertas propiedades o derechos de propiedad y lo aplicará al pago de su deuda.
CP621	Este aviso es para notificarle que usted tiene un plan de pagos a plazos vencido. Por favor, envíe el pago inmediatamente.
CP623	Este aviso es para informarle nuestra intención de cancelar su plan de pagos a plazos y confiscar (embargar) sus bienes. Usted incumplió en su acuerdo.
CP711	Nosotros realizamos cambios a su planilla debido a que entendemos que hubo un cálculo erróneo. Como resultado de estos cambios, usted adeuda dinero por sus contribuciones.
CP721	Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos.
CP722	Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos.
CP771	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP772	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP773	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP774	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP959	Usted no radicó su planilla de contribución de negocios identificada en este aviso.
CP2000	The income or payment information on file doesn’t match your tax return. The discrepancy may result in an increase or decrease in your tax due.
CP3219A	The IRS has received information that is different from what you reported on your tax return. This may result in an increase or decrease in your tax.
CP3219N	The IRS didn’t receive your tax return, so it calculated your return based on the information received from employers, financial institutions, and others. If you want to challenge the proposed tax, you have 90 days from the date of this notice. If you are outside the country, you have 150 days.
Letter 0012C	The IRS needs additional information to process your tax return.
Letter 0484C	The IRS wants a completed
Letter 0525	Updates you on proposed changes after an IRS examination. Any changes are explained and details the refund due or taxes owed.
Letter 531	IRS Notice of Deficiency. The information the IRS received about you was different from what you reported on your return.
Letter 0668D(LP 68)	The IRS released their levy.
Letter 0549C	Your tax bill was paid.
Letter 0681C	The IRS accepted your payment proposal. However, this is not a formal Installment Agreement.
Letter 0757C	You did not adhere to the terms of your Installment Agreement.
Letter LT 11	The IRS plans to seize your property or rights to property.
Letter 1058	The IRS has not received your payment. It plans to seize your property or rights to property.
Letter 1615 (LT 18)	You must respond to the IRS within 10 days of this notice regarding past due tax returns.
Letter 1737 (LT 27)	Complete and sign Form 433F, Collection Information Statement.
Letter 1961C	Your application for a Direct Debit Installment Agreement was declined. It explains why and what you need to do to qualify.
Letter 1962C	Your application for a
Letter 2050 (LT 16)	The IRS is trying to collect unpaid taxes from you from returns that have been filed or from returns that have not been filed.
Letter 2257C	The IRS is providing the payoff amount that you requested.
Letter 226-J	An IRS letter to large employers notifying them that they may be liable for an Employer Shared Responsibility Payment (ESRP).
Letter 2271C	A request for an Installment Agreement has been approved. It explains the fees and how to qualify for a Low Income Fee Reduction. The letter may also request missing information.
Letter 2272C	An IRS letter explaining why your request to pay the balance due in installments was declined.
Letter 2273C	A confirmation letter of your request to pay the balance due in installments. It contained the amount to pay, fees charged, and where to send payment. Instructions on how to apply for the Low Income Fee Reduction included.
Letter 2318C	A response to a request to pay taxes due to payroll deductions. It also explains the fees that are charged.
Letter 2357C	The IRS is admitting that it did not send you the balance due notices that it should have.
Letter 2603C	The IRS accepted your installment agreement. The IRS will file a Notice of Federal Tax Lien on your personal property.
Letter 2604C	The IRS has accepted your request for installment payments. This IRS letter provides the monthly payment, the address where to send it, and the fees charged. The letter also provides instructions on how to apply for the Low Income Fee Reduction.
Letter 2761C	The IRS is requesting your combat zone service dates to ensure that it provides you with the special provisions and protection of the combat zone deferment. Copies of military orders or other documentation to support your time served may be requested. Civilians working in support of the Armed Forces may be required to provide a Letter of Authorization or a letter from their employer.
Letter 2789C	An annual reminder notice, as required by law, of the balance due to the IRS. It explains that penalties and interest continue to accrue until the balance is fully paid.
Letter 2840C	Confirms your Installment Agreement request and includes the payment amount and due date. This IRS letter explains the fees charged for paying monthly and explains how to apply for the Low Income Fee Reduction (if you qualify).
Letter 3030C	Provides an explanation of the tax, penalty, and interest still due on your account.
Letter 3127C	A confirmation of your request to make a change to your Installment Agreement. This IRS letter explains the fees for the change. Changes can be to the payment amount or due date, or it can include additional liabilities.
Letter 3174	A reminder of taxes due after the IRS has sent a Notice of Intent to Levy.
Letter 3217C	The IRS has accepted your request to pay the balance in installments. This IRS letter provides your payment amount, the due date, and fees charged. The letter also provides instructions on applying for the Low Income Fee Reduction (if you qualify).
Letter 3228 (LT 39)	A request to pay the balance due within 10 days using the envelope provided.
Letter 3500	The IRS has received your documents, and it needs additional time to review them.
Letter 3572	Your Federal Income Tax Return has been selected for examination. The IRS auditor requests that you call to schedule an audit appointment.
Letter 4883C	The IRS received your federal income tax return but needs more information to verify your identity in order to process your tax return accurately.
Letter 4903 (LT 26)	You must file your tax returns immediately. The IRS has previously contacted you, but it did not receive a response.
Letter LP 47	The IRS is trying to locate the person identified in the letter and is requesting that you provide their new address.
Letter LP 59	The IRS has not received a response to the notice of levy it previously sent.
Audit Letter 2205	The IRS manages audits either by mail or through an in-person interview to review your records. The interview may be at an IRS office (office audit) or the taxpayer’s home, place of business, or accountant’s office (field audit).
Letter 915	You recently underwent an audit, and the IRS informs you that you now owe taxes.

Key takeaways

A CP298 Notice is issued when the IRS intends to levy 15% of your Social Security benefits due to unpaid taxes.
Taxpayers have 30 days to respond to the notice by paying the debt, setting up a payment plan, or filing an appeal.
Contact the IRS directly, not the Social Security Administration, to resolve the issue or discuss payment options.
Failure to respond can result in additional penalties, a levy on Social Security benefits, and a loss of appeal rights.

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