CP92 Notice: Notice of Levy on State Tax Refund

The CP92 Notice is sent by the IRS to notify taxpayers that their state tax refund has been levied to satisfy unpaid federal tax debts. This means that the IRS has taken the state tax refund and applied it toward the taxpayer’s federal tax liability, leaving no refund for the taxpayer at the state level.

Key points of the CP92 Notice:

• Levy on State Refund: The notice explains that the IRS has levied the taxpayer’s state tax refund and used it to offset federal tax debts. This can happen if the taxpayer has unpaid federal taxes and has not made arrangements to settle the debt.
• Impact on Future Refunds: If the federal tax debt is not fully satisfied by the levy of the state refund, the IRS may continue to levy future refunds until the debt is fully paid. The taxpayer will need to resolve the debt to prevent further levies.
• Next Steps: Taxpayers can respond to the notice by paying the remaining balance of their federal tax debt, setting up a payment plan, or disputing the levy if they believe it was issued in error. The notice will include instructions on how to take these actions.
• Appeal Options: If the taxpayer disagrees with the levy, they have the right to appeal through the IRS’s Collection Due Process (CDP) hearing. The CP92 provides instructions on how to request a hearing and what documentation may be needed.

The CP92 Notice is a strong indication that the IRS has already taken action to collect unpaid federal taxes, and taxpayers should work quickly to resolve the debt and prevent future levies.