IRS Notice CP92 is the Notice of Seizure of Your State Tax Refund and Your Right to a Hearing.

It’s a post-levy notice: the IRS only sends CP92 after it has already taken action and seized some or all of the refund shown on your state income tax return. The notice is sent by certified mail and also tells you about your rights to appeal that levy.

The State Income Tax Levy Program

Most states with an income tax participate in a program that allows the IRS to take a taxpayer’s state income tax refund and apply it to that taxpayer’s federal tax debt.

Out of 42 states (plus the District of Columbia) that have an income tax, only Hawaii, Montana, and North Dakota do not participate in this program.

If you get IRS Notice CP92, it means:

• You had a state income tax refund coming, and
• The IRS intercepted it and applied it to your federal balance, and
• The IRS is now formally telling you what it did and what your rights are.

Your Right to a Hearing

In general, before the IRS can levy (take) your income or assets, it must give you written notice of your right to a Collection Due Process (CDP) hearing at least 30 days in advance (Internal Revenue Code §6330(a)).

But there’s a specific exception in Internal Revenue Code §6330(f):
When the levy is on a state tax refund, the IRS can levy first and give you the CDP notice afterward.

That’s exactly what CP92 does:

• Confirms that your state refund has already been seized, and
• Informs you of your right to request a CDP hearing using Form 12153.

IRS Notice CP92 At a Glance

• Notice Type: Collections (post-levy)
• Generated By: IRS Automated Collection System (ACS)
• Preceded By: Seizure of your state income tax refund
• Accompanied By: Form 12153 (Request for a Collection Due Process or Equivalent Hearing)
• Recommended Action: Request a CDP hearing (if appropriate) and/or enter into a resolution for your remaining balance

IRS Notice CP92 Explained, Part by Part

Part 1: Notice of Seizure of Your State Tax Refund and Your Right to a Hearing

The large heading at the top of IRS Notice CP92 has two purposes:

1. To confirm that the IRS seized your state income tax refund, and
2. To notify you that you have the right to request a CDP hearing to challenge the levy and discuss collection alternatives.

This section also shows:

• The amount of your state refund that was taken, and
• Your remaining balance due with the IRS after applying that refund.

Part 2: What You Need to Do Now About IRS Notice CP92

Next, the notice explains “what you need to do now”—which really means what the IRS wants you to do:

• Pay your balance in full, or
• Set up a payment arrangement, such as an installment agreement, if you can’t pay everything at once.

The notice provides:

• Online payment options
• Instructions for paying by mail
• A phone number to call if you need to discuss payment arrangements

Part 3: What the IRS Says It Will Do If It Doesn’t Hear From You

In this section, the IRS warns what may happen if you ignore IRS Notice CP92 and take no steps to resolve your tax debt.

The three big risks highlighted are:

1. Further levy action
   • The IRS may levy wages, bank accounts, and other income sources.
   • The seizure of your state tax refund is often just the beginning, not the end, of enforcement.
2. Notice of Federal Tax Lien (NFTL)
   • By law, once tax is assessed, the IRS has a claim (a “secret lien”) on your current and future property.
   • Filing an NFTL makes that claim public, which can affect:
     • Your ability to get loans or lines of credit
     • Business relationships
   • The CP92 explains that a lien may be filed if the balance remains unresolved.
3. Passport issues for seriously delinquent tax debt
   • If your balance meets the “seriously delinquent” threshold (currently indexed, often quoted around $62,000), the IRS can certify your debt to the State Department.
   • The State Department may:
     • Deny a new passport application
     • Refuse to renew your passport
     • In limited cases, even revoke your existing passport

If you travel internationally for work or family, this is a critical reason to address your CP92 quickly.

Part 4: If You Are in Currently Not Collectible (CNC) Status

If you are already in currently not collectible (CNC) status due to financial hardship, the notice explains that:

• The IRS may still keep your tax refunds, including state refunds,
• But generally will not take additional enforced collection actions such as:
  • Wage garnishments
  • Bank account levies

Your case is not “closed,” but active enforcement is usually paused while you remain in CNC status.

Part 5: Your Appeal Rights

This is arguably the most important section of IRS Notice CP92.

• You have the right to request a Collection Due Process (CDP) hearing with IRS Appeals.
• To do this, you must:
  • Complete Form 12153, and
  • Mail or fax it to the address shown by the deadline on the notice.

If you miss the CDP deadline:

• You may still request an equivalent hearing (generally within 1 year),
• But you lose some procedural protections that come with a timely CDP request (such as the ability to petition Tax Court if you disagree with the Appeals determination).

A CDP or equivalent hearing is often the best chance to:

• Challenge inappropriate collection actions
• Propose a payment plan or Offer in Compromise
• Ask that your account be placed into currently not collectible status

Part 6: Your Billing Details

The “Billing details” section gives a year-by-year breakdown of your IRS balance.

For each tax period you’ll see:

• Tax period ending – usually the last day of the tax year or quarter
• Form number – the type of tax return filed (e.g., Form 1040, 1040-SR, etc.)
• Amount you owed – original tax reported or assessed
• Interest – interest the IRS has added to your balance over time
• Failure-to-pay penalty – penalty for not paying the tax when due
• Total – the sum of tax, penalties, and interest for that year

This section is your roadmap to which years are involved and how much of the total comes from penalties and interest.

Part 7: Additional Information

Here the IRS provides:

• A link to the official IRS CP92 webpage
• Links for forms, instructions, and publications
• General phone numbers and mailing addresses if you need more help

Part 8: Taxpayer Rights and Sources of Assistance

This section points you to:

• The Taxpayer Bill of Rights
• IRS Publication 1, Your Rights as a Taxpayer
• The Taxpayer Advocate Service (TAS)
• Low-Income Taxpayer Clinics (LITCs) that may represent qualifying taxpayers in disputes with the IRS, including CDP hearings

Part 9: Payment Coupon

Finally, IRS Notice CP92 includes a payment coupon at the bottom.

Use this if you plan to mail a check or money order, and remember to:

• Make it payable to “United States Treasury”
• Include your name, SSN, tax year, and form number on the payment
• Mail it to the address shown on the notice

Why Many “Tax Relief” Firms Don’t Go Far Enough For IRS Notice CP92

When people discover the IRS has seized their state refund, the knee-jerk reaction is often to call a national “tax relief” firm they heard about in an ad.

Sometimes those firms can help with basic form filing or phone calls. But in many CP92 cases, especially when multiple years and complex finances are involved, that’s not enough. You need a CPA Firm.

Common gaps we see:

• They don’t question the underlying tax returns.
  Many companies start with whatever the IRS says you owe and work from there. They rarely ask, “Are those returns accurate? Should anything be amended?”
• They focus on surface-level resolution.
  The emphasis is often on selling an installment agreement or a generic “fresh start” solution—not on understanding how you got here or how to avoid repeat problems.
• They lack deep experience with CDP hearings.
  CP92 specifically raises your appeal rights. A call-center model is usually not built to:
  • Prepare a strong Form 12153
  • Organize documents supporting your position
  • Coordinate with Appeals to negotiate a thoughtful, long-term resolution
• They may not understand small-business or multi-year issues.
  If you’re self-employed, own rentals, or have K-1s, you need someone who can read returns, books, and transcripts together—not just relay IRS balances back to you.

A levy on your state refund is often a symptom of deeper problems. You need someone who can treat the entire system, not just put a bandage on one notice.

How a CPA Firm Like Corridor Consulting Handles IRS Notice CP92

At Corridor Consulting, we treat IRS Notice CP92 as the beginning of a structured plan—not a one-off crisis.

1. Immediate Triage

We start by:

• Reviewing your CP92 and confirming what the IRS did
• Pulling and analyzing your IRS account transcripts
• Identifying all years and balances involved
• Flagging the deadline to request a CDP hearing and other key dates

If it’s appropriate to request a CDP hearing, we help you prepare for it and coordinate with qualified representation to ensure your rights are protected.

2. Verify the Numbers Behind the Levy

Before we recommend any resolution, we step back and ask:

“Are the original returns and balances correct?”

That may involve:

• Comparing IRS balances to your own records
• Reviewing prior-year returns for errors or missed opportunities
• Identifying penalties that may qualify for abatement
• Confirming all payments and credits were properly applied

If amending returns or correcting prior errors improves your position, we’ll discuss that with you before you commit to a long-term agreement.

3. Build a Resolution Strategy That Fits Your Situation

Once we trust the numbers, we focus on a sustainable plan, which might include:

• Installment agreement that realistically fits your cash flow
• Offer in Compromise (OIC) when appropriate
• Currently Not Collectible (CNC) status if you qualify due to hardship
• Penalty abatement requests where the facts support relief
• CDP or equivalent hearings to challenge inappropriate collection actions

The goal is not just “get the IRS off your back,” but to stabilize your finances and reduce risk going forward.

IRS Notice CP92 FAQs

Which states participate in the state income tax levy program?

The table below shows, as of now, which states (and the District of Columbia) have a personal income tax and whether they participate in the IRS state income tax refund levy program used in connection with IRS Notice CP92. All income-tax states currently participate except Hawaii, Montana, and North Dakota. List below is subject to changes and may not be updated.

Additional IRS Resources for IRS Notice CP92

If you want to read more directly from the IRS and related authorities:

• IRS – Understanding Your CP92 Notice
• IRS – Collection Due Process (CDP) and Equivalent Hearings
• IRS – Taxpayer Bill of Rights (Publication 1)
• Taxpayer Advocate Service – Get Help With a Tax Problem
• Low-Income Taxpayer Clinics (LITCs) – IRS Directory

Take the First Step

If the IRS has already taken your state tax refund, you don’t have to navigate the rest of the process alone.

Here’s how we typically begin:

1. Complete our Discovery Chat Questionnaire so we can understand your situation and see your notice in context.
2. Schedule a short Discovery Chat to review your options.
3. Decide whether you’d like Corridor Consulting to help you challenge the levy, request a hearing, and build a long-term plan to resolve your tax debt.

You’ve already had money taken—now is the time to get clarity, protect your rights, and put a strategy in place.