What is a CP90 notice and how long do I have to respond?

What this means

This is the notice the earlier ones were leading to.

Internal Revenue Code § 6330 provides that, before the first levy for a liability, the IRS must notify you in writing of your right to a hearing before the IRS Independent Office of Appeals, and must give you 30 days to request it. A CP90 is that notification.

Two consequences follow, and they pull in opposite directions.

A right is now available that was not available before. A Collection Due Process hearing is a genuine forum. In it you can raise collection alternatives, challenge the appropriateness of the collection action, raise spousal defenses, and — if you had no prior opportunity to dispute it — challenge the underlying liability itself. The outcome is subject to review by the United States Tax Court.

That right expires in 30 days. Almost nothing else in the collection sequence works this way. A missed reminder notice costs nothing procedurally. A missed § 6330 window costs the hearing, and the Tax Court review that goes with it.

What happens after the window closes

If no timely request is made, the IRS may levy without sending anything further. In practice that means:

• Bank levy. A bank must hold the funds for 21 days before remitting them, which is the only built-in opportunity to intervene.
• Wage levy. This is continuous — it attaches to each pay period until released, rather than taking a single amount once.
• Receivables and contractor payments, which for a self-employed taxpayer can be more disruptive than a wage levy.
• Other property, subject to the exemptions in § 6334.

The trade-off nobody mentions

A timely Collection Due Process request suspends levy action while the matter is pending. It also generally suspends the running of the collection statute for the affected periods — meaning the ten-year period the IRS has to collect is extended by roughly the time the case is pending.

Whether that trade is worth making depends on facts specific to the account: how much collection statute is left, what the realistic collection potential is, and what the hearing would actually be used to achieve. For an account with years of statute remaining and a genuine collection alternative to propose, the suspension costs little. For an account close to statute expiration, it can be the most expensive thing available.

This is a real strategic decision and it turns on dates that have to be computed.

What determines your options after a CP90

• Whether the 30 days are still open, which requires the notice date, not an estimate.
• Whether a prior opportunity to dispute the liability existed — this governs whether the underlying liability can be challenged in the hearing at all.
• The collection statute expiration date for each period, which determines whether suspension is cheap or costly.
• Whether every required return is filed. Appeals will generally not approve a collection alternative for a taxpayer who is not in filing compliance.
• Income, allowable living expenses, assets and equity — because a hearing is most useful when it is used to put a specific, supported alternative in front of Appeals.
• For a business, whether current payroll tax deposits are being made.

Possible resolution paths after a CP90

A Collection Due Process hearing is a forum, not an outcome. What gets proposed in it is one of the ordinary alternatives:

• an installment agreement or partial pay installment agreement;
• Currently Not Collectible status;
• an Offer in Compromise;
• penalty abatement, where grounds exist;
• correction of the assessment, where the balance is wrong;
• withdrawal, discharge, or subordination of a filed lien.

What should be investigated after a CP90

Within a 30-day window, the investigation has to be targeted:

• the exact notice date and which periods it covers;
• whether a final notice was previously issued for any of those periods, which would mean this window is not the first;
• account transcripts for each period — assessment dates, collection statute dates, prior notice history;
• whether a prior opportunity to dispute each liability existed;
• filing compliance across all years;
• a financial position assembled to the standard Appeals will actually want to see, rather than a rough estimate.

What to do now

1. Find the notice date and count 30 days from it. That single number governs what is possible.
2. Check whether other periods are already past their window. A CP90 for one year does not mean the others are at the same stage.
3. Do not assume a hearing request is automatically the right move. It suspends the collection statute, and on some accounts that is a significant cost.
4. Get filing compliance in order. An alternative will not be approved without it.
5. Have the account examined before the window closes, not after. After it closes, the strongest remedy is gone and the remaining ones are weaker.