The IRS CP91 notice is a Final Notice of Intent to Levy Your State Income Tax Refund sent to taxpayers with unpaid federal tax debts. This notice informs you that the IRS intends to intercept your state tax refund through the Federal Payment Levy Program (FPLP) unless you take action to resolve your federal tax debt within the specified timeframe.

Key Features of the CP91 Notice:

• Final warning before state refund seizure
• 30-day Collection Due Process hearing rights period
• Specific state refund information that will be intercepted
• Complete federal tax debt breakdown including penalties and interest
• Payment and resolution options available
• Legal rights and hearing procedures explained

You received a CP91 notice because:

Unpaid Federal Tax Debt

• Outstanding balance on your federal tax account
• Previous collection notices were not resolved
• State tax refund has been identified for potential seizure
• Federal Payment Levy Program criteria have been met

Collection Process Escalation

• Earlier notices (CP14, CP501, CP503, CP504) were not adequately addressed
• Voluntary compliance efforts have been unsuccessful
• Administrative collection procedures are being implemented
• Asset identification has located your state refund

State Refund Availability

• Filed state tax return expecting a refund
• State participation in federal levy program
• Refund amount sufficient to warrant collection action
• No existing state offset programs blocking the refund

Federal Payment Levy Program (FPLP)
The IRS uses this program to intercept various federal and state payments:

• State income tax refunds from participating states
• Federal contractor payments to businesses
• Federal retirement payments in certain circumstances
• Other government payments to individuals and businesses

Levy Process Timeline

1. CP91 notice issued giving 30-day warning
2. State refund identified through automated matching
3. Levy notice sent to state revenue department
4. State refund seized and transferred to IRS
5. Credit applied to federal tax debt
6. Balance adjustment notification sent to taxpayer

Immediate Effects

• State refund intercepted before reaching your bank account
• Funds applied to your federal tax debt
• Reduction in federal balance by the refund amount
• Interest and penalties continue on remaining balance

Financial Impact

• Loss of expected funds for personal or business needs
• Potential cash flow problems if you were counting on the refund
• Continued federal tax debt if refund doesn't cover full balance
• Additional collection actions possible on remaining debt

Collection Due Process Hearing Rights
You have 30 days from the CP91 notice date to request a CDP hearing:

Benefits of requesting a hearing:

• Automatic stay of collection actions during hearing process
• Independent review by IRS Appeals Officer
• Opportunity to propose alternative collection methods
• Challenge the tax liability underlying the collection action
• Present financial hardship arguments

Alternative Resolution Options:

• Installment Agreement - Monthly payment plan
• Offer in Compromise - Settle for less than full amount
• Currently Not Collectible Status - Temporary suspension

Participating States
Most states participate in the federal levy program, but policies vary:

• Timing of refund processing affects levy opportunities
• State offset programs may take priority over federal levies
• Joint return considerations in community property states
• State notification procedures for taxpayers

Non-Participating States
A few states don't participate in federal levy programs:

• Alaska (no state income tax)
• Florida (no state income tax)
• Nevada (no state income tax)
• South Dakota (no state income tax)
• Tennessee (limited state income tax)
• Texas (no state income tax)
• Washington (no state income tax)
• Wyoming (no state income tax)