VALID › Notice Library › CP242 notice
In the IRS’s own words · not reviewed by VALID
CP242 notice explained, in the IRS’s own words
We garnished your state tax refund to pay your federal taxes. You have the right to a Collection Due Process (CDP) hearing if you disagree with this decision.
Read the full CP242 page on irs.gov ↗
What this notice is about
We garnished your state tax refund to pay your federal taxes. You have the right to a Collection Due Process (CDP) hearing if you disagree with this decision.
What you need to do
- Pay what you owe. If you can’t pay the full amount, visit our payments page for more information about payment plans, offer in compromise and temporary collection delays.
- Call us if you’ve already paid in full or think a payment you submitted is missing.
- If we notified you that collection activity has been suspended because you have a financial hardship, you don’t have to do anything.
- If you still need help, you can call us at the phone number shown on your notice.
Additional information
We can file a Notice of Federal Tax Lien (NFTL) against you. An NFTL is a public notice saying that the IRS has a claim against your property. An NFTL can affect your ability to get credit.
An NFTL applies to:
- Wages and income
- Bank accounts
- Business and personal assets (home and car)
- State tax refunds
- Social Security benefits
See Federal tax liens for more information.
If you owe a large debt (over the yearly threshold), the U.S. State Department may revoke or deny your passport. For more information, visit IRS.gov/passports.
Send us a completed Form 2848, Power of Attorney and Declaration of Representative, if you want someone (such as an accountant) to contact us for you.
What should I do if I disagree with the notice?
Submit a request for a CDP hearing using Form 12153, Request for a Collection Due Process or Equivalent Hearing PDF, by the due date on your notice.
What are reasons for requesting a CDP hearing?
- You don’t agree with the amount due.
- You want to provide additional information that may impact your case.
- You want to contest the levy and future levies.
What to do next
- Write down the date on the letter today.
- Look the number up on irs.gov yourself. Don’t trust a link or phone number from anyone else.
- If it says you owe money or proposes changes to your return, take it to a licensed CPA, EA or tax attorney before that date.
Not advice. Not a filing. Verify with a licensed professional. Rules change by year and facts.