Notices from the IRS are more common than you may realize. Each year, the IRS mails millions of letters to clarify information, confirm changes, or request additional documentation. Receiving a notice may seem intimidating, but most notices can be addressed quickly with the right information and guidance.
5 Common IRS Notices Explained
Each IRS notice includes a reference number, such as CP49 or CP14. It identifies the issue and helps determine the appropriate response. Below is an overview of the most common types of notices and what to do if one arrives in your mailbox:
1. CP12*, Refund Adjustment
*(including CP12, CP12E, CP12F, CP12G, CP12N and CP12U)
A CP12 is sent when the IRS corrects a math error or similar issue on your tax return. The correction may increase or decrease your expected refund. If you agree with the change, no response is required. If you disagree, call the IRS at the toll-free number shown on the notice by the date indicated.
2. CP14, Balance Due
This notice informs you that you owe taxes. Address the notice promptly. You can pay in full, explore installment options, or seek assistance if you believe the notice is incorrect. Ignoring it can result in interest charges, penalties, and collection actions.
3. CP49, Refund Applied to a Debt
This notice explains that your refund was used to pay all or part of an outstanding tax liability. Review how the refund was applied. Disputes are generally handled with the agency that received the funds, not the IRS. On a joint return, a spouse who's not responsible for the debt may be able to recover his or her share of the refund by filing Form 8379, "Injured Spouse Allocation."
4. CP2000 Series, Proposed Changes to Your Return
This notice is issued when the IRS compares your tax return to information reported by third parties, such as employers or financial institutions, and finds a mismatch. It isn't a bill; it's a proposal to adjust your return. Read the notice carefully and respond by the deadline listed. Follow the instructions, include any required documentation, and note whether you agree or disagree. If no response is received, additional notices or a bill may follow.
5. Letter 4883C, Identity Verification
When the IRS suspects possible identity theft, it may pause processing your return until your identity is confirmed. Call the Taxpayer Protection Program hotline as directed in the letter. Have the tax return referenced in the letter, a prior-year return (if available), and supporting documents, such as Form W-2, Form 1099, and Schedule C, ready. If you didn't file the return listed in the notice, contact the IRS immediately, because this may indicate identity theft.
Speaking of fraud, remember that the IRS will never email, text, or call demanding payment. Legitimate notices always come by mail.
How We Can Help
IRS notices can be confusing, especially when calculations or supporting documents are involved. If you receive a notice, we can review it, help confirm whether it's accurate, explain your options, and communicate with the IRS on your behalf.
Contact us for guidance.
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