Understanding your CP242 notice

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.

Frequently asked 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.