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CP242 notice: what it means and what to do
Got an IRS CP242 notice? Here is what it means, your deadline, what to check before you answer, and how to reply. Check your own letter free: it stays on your phone.
Check my CP242 notice freeWhat the IRS says 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.
Your deadline
Answer by the date printed on your notice. If there is no date, answer as soon as you can, and call the number on the notice if you need more time.
What to check before you answer
You may be able to remove the penalties
If you had no penalties in the 3 tax years before, filed all required returns, and paid or arranged to pay the tax, the IRS First-Time Abatement policy can remove failure-to-file and failure-to-pay penalties. You can ask in writing or by phone.
Cannot pay it all now? Ask for a payment plan
You can apply for a payment plan on irs.gov. Interest keeps running until the balance is paid, so pay what you can now.
Is this letter really from the IRS?
The IRS writes first by mail. A real letter shows a notice or letter number, your name and part of your tax ID number. The IRS does not ask for payment by gift card, crypto or wire transfer. If in doubt, sign in to your IRS online account, where many notices are listed.
Common questions
What should I do if I disagree with the notice? (updated Nov. 17, 2025)
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? (updated Nov. 17, 2025)
- 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.