IRS Notices and Letters – A Description of What They Are and What You Need To Do Next
Do not panic if you have received an IRS notice in the mailbox. Yes, the tone may be harsh, however, it can be solved though a few simple steps. Documented below are typical IRS letters that they will send to individuals. Every notification sent provides a description of the reason for the letter and appropriate actions you are able to take to resolve the problem addressed in the notice.
IRS Notices and Letters
CP 11 : Changes to Tax Return
A tax payer will receive a CP 11 to indicate a change was made to their current tax return and because of this change, the individual now has a balance with the IRS that needs to be paid.
CP 14 : Balance Due
If a taxpayer has underpaid tax, this notice will let them know. In this notice, it is listed the amount of tax that you reported, the current applied credits, and the total underpayment amount.
CP 22A : Data Processing Adjustment Notices, Balance Due of $5 or More
After a data processing adjustment was made and immediate outcome was a balance on your account, you will receive this notice.
CP 22E : Examination Adjustment Notice, Balance Due
When an adjustment is made to your tax account and created an outstanding balance of five dollars or more, this notice will be sent to you.
CP 23 : Estimated Tax Discrepancy, Balance Due
A CP 23 tells you that the IRS located a discrepancy between the total sum of money on your tax account, and the current amount of approximated tax payments claimed on your current tax return.
CP 88: Delinquent Return Refund Hold
This notice informs you that you tax refund is being detained. The IRS is able to do this and often it is because you neglected to file the previous year’s tax return. Despite if you have a refund due to you, the IRS states that you are not allowed to collect it until all the required returns have been filed properly.
CP 90/CP297/CP297A : Notice of Levy and Notice of Your Right to a Hearing
If you continue to neglect paying back taxes, this notice is mailed to inform you of the IRS’ intention to level federal payments, including OPM retirement benefits, salary, and social security benefits. Other items the IRS are able to levy, as dictated by these notices include wages, business assets, commissions, bank accounts, automobile, and real estate.
CP 91 : Final Notice Before Levy on Social Security Benefits
If you get this notice, it means the IRS is planning to levy your social security benefits. By neglecting to take the proper actions after this notice is received, the IRS is able to take up to fifteen percent of your received social security benefits.
CP 161 : Request for Payment of Notice of Unpaid Balance, Balance Due
This notice identifies any underpaid taxes you may have. This notice also outlines details on the amount of tax you were reported to pay and applied credits to your current account.
CP 501 : Reminder Notice, Balance Due
This is a very straightforward and simple letter sent to notify that you currently have a balance due to the IRS. This notice is the first in a series that requests you pay money owed.
CP 503 : Second Request Notice, Balance Due
If you neglect to pay the IRS after a CP 501 is sent, this is the next notice sent to update you of an outstanding balance with the IRS. This second notice requires that you take proper action to remedy this situation.
CP 504 : Final Notice, Balance Due
If you still choose to ignore the letters from the IRS, this is the final notice that you have a balance due. It is more demanding and threatening than the previous two notices. It explicitly states that if you do not reimburse back taxes, the IRS will issue a levy against the state tax refund you are entitled to get. It also notes that the IRS is making arrangements to search for your other assets in an attempt to pay off your back taxes. Lastly, it threatens that if immediate action is not taken, they will seek to place a federal tax lien against you.
CP 523 : Notice of Default on Installment Agreement
An installment agreement states that you guarantee to pay a monthly payment to the IRS to clear up back taxes that you owe. This notice is mailed if you ignored a payment, did not file your current tax return, or if your balance to the IRS increased because of additional nonpayment. It states that your installment agreement is being cancelled and why it is being terminated.