Received IRS Notice CP297? The IRS is warning you that your tax refund may be reduced or offset to pay an outstanding debt. Learn why this happens, what debts can trigger refund offsets, and how to respond before your refund is seized.
IRS Notice CP297 is a warning notice that informs you the IRS may reduce or offset your upcoming tax refund to pay an outstanding debt. This notice is sent before the IRS actually takes your refund, giving you a chance to resolve the issue or verify the debt is accurate.
CP297 is different from most IRS collection notices because it's preventive—it warns you about a potential refund offset before it happens. The debt could be federal taxes, state taxes, child support, student loans, or other government debts.
Key points about CP297:
The CP297 notice will show the type of debt, the agency claiming the debt, and the amount that may be offset from your refund. It will also provide contact information for the agency you owe.
The IRS typically sends CP297 notices for the following reasons:
Outstanding Federal Tax Debt
You owe back taxes to the IRS from previous tax years. The IRS is warning you that your current year's refund will be offset to pay the outstanding federal tax debt.
State Tax Debt
You owe unpaid state income taxes. State tax agencies can request that the IRS offset your federal refund to pay state tax debt through the Treasury Offset Program.
Unpaid Child Support
You owe past-due child support. State child support enforcement agencies can request that the IRS offset your federal refund to pay child support arrears.
Defaulted Student Loans
You defaulted on federal student loans. The Department of Education can request that the IRS offset your federal refund to pay defaulted student loan debt.
Other Government Debts
You owe other debts to federal or state agencies (unemployment compensation overpayments, etc.). These agencies can request refund offsets through the Treasury Offset Program.
Immediate Actions Required:
Verify the Debt is Accurate
Review the CP297 notice carefully to confirm the debt is legitimate and the amount is correct. If you believe the debt is incorrect, contact the agency listed on the notice (IRS, state tax agency, child support enforcement, Department of Education, etc.) immediately to dispute it.
Pay the Debt Before Your Refund is Processed
If the debt is accurate and you can afford to pay it, do so immediately. Paying the debt before your refund is processed will prevent the offset. You can pay federal tax debt through IRS Direct Pay, state tax debt through your state's payment portal, or other debts through the appropriate agency.
Set Up a Payment Plan
If you can't pay the full amount, contact the agency to set up a payment arrangement. For federal tax debt, apply for an IRS installment agreement. For child support, contact your state's child support enforcement agency. Payment plans may not stop the offset, but they prevent further collection action.
Request Injured Spouse Relief (If Applicable)
If you filed a joint return and the debt belongs to your spouse (not you), file Form 8379 (Injured Spouse Allocation) to request your portion of the refund. This applies when your spouse owes back taxes, child support, or student loans, but you don't.
Pay the Debt in Full
Pay the full amount owed before your refund is processed to prevent the offset. For federal tax debt, use IRS Direct Pay. For state taxes, use your state's payment portal. For child support or student loans, contact the appropriate agency.
Set Up an Installment Agreement (Federal Tax Debt)
If you owe federal taxes and can't pay in full, apply for an IRS installment agreement. This won't stop the refund offset, but it prevents further collection action like liens and levies.
Request Injured Spouse Relief (Form 8379)
If you filed jointly and the debt belongs to your spouse (not you), file Form 8379 to request your portion of the refund. This applies when your spouse owes back taxes, child support, or student loans, but you don't.
Dispute the Debt
If you believe the debt is incorrect, contact the agency listed on the CP297 notice immediately to dispute it. Provide documentation supporting your position. If the dispute is resolved in your favor, the offset will be cancelled.
Request Hardship Consideration
If the refund offset would cause severe financial hardship, contact the agency to request hardship consideration. For federal tax debt, request Currently Not Collectible status. For child support, contact your state's child support enforcement agency.
Yes, but only by paying the debt in full before your refund is processed, successfully disputing the debt, or filing Form 8379 (Injured Spouse Allocation) if the debt belongs to your spouse. Setting up a payment plan usually won't stop the offset, but it prevents further collection action.
Contact the agency listed on the notice immediately to dispute the debt. Provide documentation supporting your position (proof of payment, court orders, etc.). If the dispute is resolved in your favor, the offset will be cancelled and you'll receive your full refund.
Injured spouse relief (Form 8379) allows you to claim your portion of a joint refund when your spouse owes the debt but you don't. For example, if your spouse owes back child support but you don't, you can file Form 8379 to receive your share of the refund.
Yes. After the offset, you'll receive a notice explaining the amount offset, the agency that received the payment, and the remaining refund (if any). This notice is usually sent within 2-3 weeks after the offset.
Yes. If you owe multiple debts (federal taxes, state taxes, child support, student loans), your refund can be offset to pay all of them. The offsets are applied in a specific order: federal taxes first, then state taxes, then child support, then other debts.