IRS TAX Notices – What should I do when I get a tax notice from the IRS?

IRS Tax noticesEvery year the IRS mails millions of letters to taxpayers for many reasons. Here are some tips and suggestions for taxpayers who receive one if you don’t understand the first person you should ask is your San Diego Tax Lawyer Dawn Delia.

Don’t ignore IRS tax notices. Most IRS letters and notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and includes specific instructions on what to do.

Don’t panic. The IRS and its authorized private collection agencies do send letters by mail. Most of the time all the taxpayer needs to do is read the letter carefully and take the appropriate action.

Do take timely action. A notice may reference changes to a taxpayer’s account, taxes owed, a payment request or a specific issue on a tax return. Taking action timely could minimize additional interest and penalty charges.

Do review the information. If a letter is about a changed or corrected tax return, the taxpayer should review the information and compare it with the original return. If the taxpayer agrees, they should make notes about the corrections on their personal copy of the tax return and keep it for their records.

Don’t reply unless instructed to do so. There is usually no need for a taxpayer to reply to a notice unless specifically instructed to do so. On the other hand, taxpayers who owe should reply with a payment. IRS.gov has information about payment options.

Do respond to a disputed notice. If a taxpayer does not agree with the IRS, they should mail a letter explaining why they dispute the notice. They should mail it to the address on the contact stub at the bottom of the notice. The taxpayer should include information and documents for the IRS to review when considering the dispute. The taxpayer should allow at least 30 days for the IRS to respond.

Do remember that there is usually no need to call the IRS. If a taxpayer must contact the IRS by phone, they should use the number in the upper right-hand corner of the IRS tax notices. The taxpayer should have a copy of the tax return and letter when calling.

Do avoid scams. The IRS will never initiate contact using social media or text message. The first contact from the IRS usually comes in the mail. Taxpayers who are unsure if they owe money to the IRS can view their tax account information on IRS.gov.

IRS TAX Notice NumberIRS Tax notice DescriptionIRS tax notice Topic
CP01HYou received a CP 01H notice because we were unable to process your tax return. The IRS has locked your account because the Social Security Administration informed us that the Social Security number (SSN) of the primary or secondary taxpayer on the return belongs to someone who was deceased prior to the current tax year (before January 1, 2010 for a 2010 tax return).
CP02HYou owe a balance due as a result of amending your tax return to show receipt of a grant received as a result of Hurricane Katrina, Rita or Wilma.Balance Due
CP03CYou received a tax credit (called the First-Time Homebuyer Credit) for a house you purchased. You may need to file a form to report a change in ownership to the house you purchased.
CP04Our records show that you or your spouse served in a combat zone, a qualified contingency operation, or a hazardous duty station during the tax year specified on your notice. As a result, you may be eligible for tax deferment.
CP08You may qualify for the Additional Child Tax Credit and be entitled to some additional money.Additional Child Tax Credit
CP09We’ve sent you this notice because our records indicate you may be eligible for the Earned Income Credit (EIC), but didn’t claim it on your tax return.
CP10We made a change(s) to your return because we believe there’s a miscalculation. This change(s) affected the estimated tax payment you wanted applied to your taxes for next year.Change To Your Estimated Tax Credit Amount
CP10AWe made a change(s) to your return because we believe there’s a miscalculation involving your Earned Income Credit. This change(s) affected the estimated tax payment you wanted applied to your taxes for next year.Change To Your Estimated Tax Credit Amount
CP11We made changes to your return because we believe there’s a miscalculation. You owe money on your taxes as a result of these changes.Balance Due
CP11AWe made changes to your return because we believe there’s a miscalculation involving your Earned Income Credit. You owe money on your taxes as a result of these changes.Balance Due
CP11MWe made changes to your return involving the Making Work Pay and Government Retiree Credit. You owe money on your taxes as a result of these changes.Balance Due
CP12We made changes to correct a miscalculation on your return.
CP12AWe made changes to correct the Earned Income Credit (EIC) claimed on your tax return.
CP12EWe made changes to correct a miscalculation on your return.
CP12MWe made changes to the computation of the Making Work Pay and/or Government Retiree Credits on your return.
CP12RWe made changes to the computation of the Rebate Recovery Credit on your return.
CP13We made changes to your return because we believe there’s a miscalculation. You’re not due a refund nor do you owe an additional amount because of our changes. Your account balance is zero.
CP13AWe made changes to your return because we found an error involving your Earned Income Credit. You’re not due a refund nor do you owe an additional amount because of our changes. Your account balance is zero.
CP13MWe made changes to your return involving the Making Work Pay credit or the Government Retiree Credit. You’re not due a refund nor do you owe an additional amount because of our changes. Your account balance is zero.
CP13RWe made changes to your return involving the Recovery Rebate Credit. You’re not due a refund nor do you owe an additional amount because of our changes. Your account balance is zero.
CP14We sent you this notice because you owe money on unpaid taxes.
CP14IYou owe taxes and penalties because you didn’t take out the minimum amount you had to from your traditional individual retirement arrangement (IRA). Or, you put into a tax-sheltered account more than you can legally.
CP16We sent you this notice to tell you about changes we made to your return that affect your refund. We made these changes because we believe there was a miscalculation. Our records show you owe other tax debts and we applied all or part of your refund to them.
CP19We have increased the amount of tax you owe because we believe you incorrectly claimed one or more deductions or credits.
CP20We believe you incorrectly claimed one or more deductions or credits. As a result, your refund is less than you expected.
CP21AWe made the change(s) you requested to your tax return for the tax year specified on the notice. You owe money on your taxes as a result of the change(s).Balance Due
CP21BWe made the change(s) you requested to your tax return for the tax year specified on the notice. You should receive your refund within 2-3 weeks of your notice.Refund
CP21CWe made the change(s) you requested to your tax return for the tax year specified on the notice. You’re not due a refund nor do you owe any additional amount. Your account balance for this tax form and tax year is zero.Even Balance
CP21EAs a result of your recent audit, we made changes to your tax return for the tax year specified on the notice. You owe money on your taxes as a result of these changes.Balance Due
CP21IWe made changes to your tax return for the tax year specified on the notice for Individual Retirement Arrangement (IRA) taxes. You owe money on your taxes as a result of these changes.Balance Due
CP22AWe made the change(s) you requested to your tax return for the tax year specified on the notice. You owe money on your taxes as a result of the change(s).Balance Due
CP22EAs a result of your recent audit, we made changes to your tax return for the tax year specified on the notice. You owe money on your taxes as a result of these changes.Balance Due
CP22IWe made changes to your tax return for the tax year specified on the notice for Individual Retirement Arrangement (IRA) taxes. You owe money on your taxes as a result of these changes.Balance Due
CP23We made changes to your return because we found a difference between the amount of estimated tax payments on your tax return and the amount we posted to your account. You have a balance due because of these changes.
CP24We made changes to your return because we found a difference between the amount of estimated tax payments on your tax return and the amount we posted to your account. You have a potential overpayment credit because of these changes.
CP24EWe made changes to your return because we found a difference between the amount of estimated tax payments on your tax return and the amount we posted to your account. You have a potential overpayment credit because of these changes.
CP25We made changes to your return because we found a difference between the amount of estimated tax payments on your tax return and the amount we posted to your account. You’re not due a refund nor do you owe an additional amount because of our changes. Your account balance is zero.
CP27We’ve sent you this notice because our records indicate you may be eligible for the Earned Income Credit (EIC), but didn’t claim it on your tax return.
CP30We charged you a penalty for not pre-paying enough of your tax either by having taxes withheld from your income, or by making timely estimated tax payments.
CP30AWe reduced or removed the penalty for underpayment of estimated tax reported on your tax return.
CP31Your refund check was returned to us, so you need to update your address.Refund
CP32We sent you a replacement refund check.
CP32ACall us to request your refund check.
CP39We used a refund from your spouse or former spouse to pay your past due tax debt. You may still owe money.
CP42The amount of your refund has changed because we used it to pay your spouse’s past due tax debt.
CP45We were unable to apply your overpayment to your estimated tax as you requested.Overpayment
CP49We sent you this notice to tell you we used all or part of your refund to pay a tax debt.Overpayment
CP51AWe computed the tax on your Form 1040, 1040A or 1040EZ. You owe taxes.
CP51BWe computed the tax on your Form 1040, 1040A or 1040EZ. You owe taxes.
CP51CWe computed the tax on your Form 1040, 1040A or 1040EZ. You owe taxes.
CP53We can’t provide your refund through direct deposit, so we’re sending you a refund check by mail.Direct Deposits
CP59We sent you this notice because we have no record that you filed your prior personal tax return or returns.
CP60We removed a payment erroneously applied to your account.
CP62We applied a payment to your account.
CP63We are holding your refund because you have not filed one or more tax returns and we believe you will owe tax.
CP71You received this notice to remind you of the amount you owe in tax, penalty and interest.
CP71AYou received this notice to remind you of the amount you owe in tax, penalty and interest.
CP71CYou received this notice to remind you of the amount you owe in tax, penalty and interest.
CP71DYou received this notice to remind you of the amount you owe in tax, penalty and interest.
CP88We are holding your refund because you have not filed one or more tax returns and we believe you will owe tax.
CP90CWe levied you for unpaid taxes. You have the right to a Collection Due Process hearing.
CP120You need to send us documentation of your tax-exempt status.Tax Exemptions
CP120AYour organization’s tax-exempt status has been revoked for failure to file a Form 990 series return for three consecutive years. In addition, you are no longer eligible to sponsor a tax-sheltered annuity plan (Internal Revenue Code section 403(b) retirement plan).
CP130Your tax return filing requirements may have changed: You may no longer need to pay the Alternative Minimum Tax.Filing Requirements
CP152We have received your return.Confirmation of Return Receipt
CP153We can’t provide you with your refund through a direct deposit, so we’re sending you a refund check/credit payment by mail.Refund
CP166We were unable to process your monthly payment because there were insufficient funds in your bank account.Payment Process
CP178Your tax return filing requirements may have changed: You may no longer owe excise tax.Filing Requirements
CP180/CP181We sent you this notice because your tax return is missing a schedule or form.
CP231Your refund or credit payment was returned to us and we need you to update your current address.Address Update Needed
CP259We’ve sent you this notice because our records indicate you didn’t file the required business tax return identified in the notice.
CP259AWe sent you this notice because our records indicate you did not file a required Form 990/990-EZ, Return of Organization Exempt From Income Tax.
CP259BWe sent you this notice because our records indicate you didn’t file a required Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.
CP259CWe sent you this notice because our records indicate you are presumed to be a private foundation and you didn’t file a required Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.
CP259DWe sent you this notice because our records indicate you did not file a required Form 990-T, Exempt Organization Business Income Tax Return.
CP259EWe sent you this notice because our records indicate you did not file a required Form 990-N, e-Postcard.
CP259FWe’re sending you this notice because our records indicate you did not file a required Form 5227, Split-Interest Trust information Return.
CP259GWe sent you this notice because our records indicate you did not file a required Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations.
CP259HWe sent you this notice because our records indicate you are a tax-exempt political organization and you did not file a required Form 990/990-EZ, Return of Organization Exempt From Income Tax.
CP276AWe didn’t receive a correctly completed tax liability schedule. We normally charge a Federal Tax Deposit (FTD) penalty when this happens. We decided not to do so this time.FTD Penalty
CP276BWe didn’t receive the correct amount of tax deposits. We normally charge a Federal Tax Deposit penalty when this happens. We decided not to do so this time.FTD Penalty
CP297CWe levied you for unpaid taxes. You have the right to a Collection Due Process hearing.
CP501You have a balance due (money you owe the IRS) on one of your tax accounts.
CP503We have not heard from you and you still have an unpaid balance on one of your tax accounts.
CP504You have an unpaid amount due on your account. If you do not pay the amount due immediately, the IRS will seize (levy) your state income tax refund and apply it to pay the amount you owe.
CP504BYou have an unpaid amount due on your account. If you do not pay the amount due immediately, the IRS will seize (levy) certain property or rights to property and apply it to pay the amount you owe.
CP521This notice is to remind you that you have an installment agreement payment due. Please send your payment immediately.
CP523This notice informs you of our intent to terminate your installment agreement and seize (levy) your assets. You have defaulted on your agreement.

Taxpayers needing tax help with IRS tax notices,  unfiled taxes or back taxes should seek the advice of a tax attorney.  The San Diego Tax Attorneys at Delia Law have many years of tax resolution experience and will competently represent you before the IRS.  Please call for a no-cost tax attorney consultation for tax resolution at (619) 639-3336. We look forward to helping you.

This blog post is not intended as legal advice and should be considered general information only.