IRS CP297
We Intend to Levy Federal Payments You Receive
The IRS is about to intercept your federal contractor payments or other federal income.
Deadline
30 days to request a CDP hearing or establish a resolution
Federal contractor payments are critical business income. Once the levy begins, federal agencies redirect payments to the IRS. This can cause contract defaults and business damage.
Act within days — enforcement is imminent or already in progress.
What IRS CP297 Means
CP297 is the business version of a federal payment levy notice. It means the IRS intends to intercept federal payments directed to your business — most commonly payments from federal government contracts, grants, or other federally-sourced business income.
For federal contractors, this is particularly serious because it not only affects cash flow but can trigger contract compliance issues. Federal agencies that receive a levy notice may question the contractor's financial stability.
CP297 triggers Collection Due Process rights. You have 30 days to request a CDP hearing and suspend the levy while your case is reviewed.
What the IRS Can Do If You Don't Respond
- Intercept 100% of federal contractor and vendor payments
- Continue the levy until the full balance is paid
- Pursue additional levies on other business assets simultaneously
- File a federal tax lien on business property
What You Should Do Right Now
- 1
File Form 12153 (CDP Hearing Request) within 30 days to suspend the levy
- 2
Alert your federal contracting officer if necessary to prevent contract compliance issues
- 3
Establish a resolution (installment agreement or OIC) as quickly as possible
- 4
Contact a tax professional who understands business collection defense
Resolution Options Available to You
Frequently Asked Questions About IRS CP297
Can the IRS take 100% of my federal contract payments?
Yes. Unlike Social Security (capped at 15%), federal contractor payments are subject to 100% levy through the Federal Payment Levy Program. This can effectively shut down a federal contractor's cash flow entirely.
Professional References
IRC: IRC §6331(h) — Continuous Levy; IRC §6330 — CDP Rights
IRM: IRM 5.11.7 — Federal Payment Levy Program — Business
Got IRS CP297? Let's Resolve It.
ebotCPA represents taxpayers in Irving, Dallas, Fort Worth, and across Texas. Free consultation — no obligation.