Notice CP259 is an urgent notification from the IRS informing a business that it has an outstanding balance of employment taxes (such as payroll taxes) and that the IRS intends to seize business assets to satisfy the debt. This notice is a critical step in the IRS collection process and serves as the final warning before enforced collection actions begin.
Response Deadline
The IRS typically must wait 30 days from the date of this notice before initiating a levy action. However, immediate action is required to prevent the levy and explore resolution options.
This notice means the IRS has determined your business owes delinquent employment taxes, and all prior attempts to collect this debt have been unsuccessful. Employment taxes, often called 'trust fund taxes,' are considered extremely serious by the IRS because they include income tax and FICA (Social Security and Medicare) withholdings taken directly from employee wages. The IRS views the failure to remit these funds as the misuse of money held in trust for the government. CP259 is not a bill; it is a formal Notice of Intent to Levy. It details the specific tax periods and amounts owed and warns that if full payment or an alternative resolution is not reached immediately, the IRS will begin seizing business assets. These assets can include bank accounts, accounts receivable, business property, and even personal assets of responsible individuals under the Trust Fund Recovery Penalty (TFRP).
You received CP259 because your business has a confirmed, outstanding balance of employment taxes, and the IRS has exhausted its standard billing cycles. Common reasons include: 1. Failure to file or pay Form 941 (Employer's Quarterly Federal Tax Return) or Form 940 (Annual Federal Unemployment Tax Return). 2. Disagreement over a previously assessed tax liability that was never resolved or paid. 3. Failure to adhere to the terms of a previous Installment Agreement, causing it to default. 4. Misapplication of payments, where funds were sent but not correctly credited to the employment tax account.
Immediate action is mandatory, as the IRS can begin the levy process shortly after the date on this notice. First, immediately verify the tax periods and amounts listed on the CP259 against your business records to confirm accuracy. If you agree with the balance, your primary goal is to contact the IRS immediately using the phone number provided on the notice to discuss payment options. If you cannot pay in full, you must propose an alternative resolution, such as an Offer in Compromise (OIC) or an Installment Agreement (IA). If you disagree with the balance, you must submit documentation proving the error. If the IRS initiates a levy, you may need to file Form 12153, Request for a Collection Due Process or Equivalent Hearing, to appeal the levy action. Do not ignore this notice; seek professional tax advice immediately.
Ignoring Notice CP259 is extremely risky and will result in aggressive collection actions. If you fail to respond or resolve the debt within the 30-day period, the IRS will proceed with enforced collection actions, including levying (seizing) business bank accounts, accounts receivable, and business property. Furthermore, the IRS may assess the Trust Fund Recovery Penalty (TFRP) against responsible individuals (owners, officers, or employees) who willfully failed to pay the employment taxes, making them personally liable for the debt. Interest and failure-to-pay penalties will continue to accrue daily, significantly increasing the total amount owed, potentially leading to the closure of the business and personal bankruptcy for the responsible parties.
Dexter can guide you through the entire response process step-by-step.
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