IRS Letters and Notices Explained
An IRS letter or notice is the IRS’s initial means of contacting an individual concerning their taxpayer’s account. The IRS sends notices and letters for various reasons. These are some of the most common letters and notices from the Internal Revenue Service.
CP 2000 Notice of Underreported Income
A CP 2000 Notice IS NOT A BILL.
A CP 2000 is the Notice of Proposed Adjustment for Underpayment/Overpayment and is the most common notice sent out by the IRS.
During the IRS Tax Return Process, the IRS compares informational returns filed by companies on Forms W-2, 1098, 1099, etc. with information as reported by a taxpayer on their return, and issues a CP 2000 notice if they find differences in income, deductions, credits, and/or payments. A CP 2000 notice advises taxpayers of a proposed change to a taxpayer tax return.
CP 3219A-Statutory Notice of Deficiency sometime called a 90-day letter
A CP 3219 notice is an additional notice sent out by the IRS to taxpayers stating that the IRS has received information that is different from what you reported on your tax return. A taxpayer gets a CP3219 after a CP 2000 notice. This notice will explain what to do if you agree or disagree and how you can challenge it in U.S. Tax Court.
CP 11 Changes to Tax Return, Balance Due
A CP11 Notice is issued during the Tax Return Processing stage of the Taxpayer Road Map.
A CP 11 informs a taxpayer that an adjustment has been made to their tax return due to a miscalculation, and a balance is due because of the adjustment.
CP 14 Balance Due, No Math Error
A CP14 shows the underpaid tax amount according to IRS records. This notice shows the tax reported on the return, the payments the IRS applied to your account, and the remaining underpayment they have calculated.
Always remember that additional interest and penalties may accrue if the balance is not paid in full before the due date.
After verifying the amount are correct on a CP 14 notice, this is an excellent time to consider various payment options, such as installment agreements or an offer in compromise.
CP 16 Changes to Tax Return, Overpayment Applied to Balance Due
CP 16 notices are sent to taxpayers when the IRS has adjusted their tax return, affecting that refund. This notice explains the changes to the tax return and the amount of the overpayment that was applied to your tax balance from prior year returns.
CP 22E - Examination Adjustment Notice, Balance Due
After an audit, a CP 22E notice may be issued. This notice informs the taxpayer of a balance due because of the audit examination of their tax return.
CP 59 Request for Your Tax Return
This notice states the IRS has no record that you have failed to file a tax return. Immediate actions need to be taken: filing your tax return as soon as possible or a written letter explaining to the IRS why you don’t need to file.
CP 71
A CP71 notification serves as a reminder that you of a tax debt. This notice will include the amount owed in tax, penalty, and interest.
CP 90/CP 297 Notice of Intent to Levy
This notice states that the IRS intends to levy, garnish or legally seize your property to satisfy your tax debt.
You should pay the balance due in full. This notice gives taxpayers time to pay the debt, enter an installment agreement, or propose an Offer in Compromise.
If you don’t pay or make payment arrangements to pay the balance due, the IRS may levy or garnish payments due to you. The IRS may also file a Federal Tax Lien.
CP 91/CP 298 - Final Notice Before Levy on Social Security Benefits
The IRS issues Notice CP91 when it intends to levy against a taxpayer’s Social Security Benefits. The IRS can take up to 15% of a taxpayer’s Social Security Benefit per month to pay toward a taxpayer’s tax debt.
CP 501/CP 502 - Balance Due Reminder Notice
CP 501 notice is the first reminder that you have a past-due tax balance on a tax account.
CP 503 Second Reminder of Balance Due
CP 503 is the second reminder tax; you have an outstanding balance on a tax account.
CP 504 Final Notice - Balance Due
Notice CP 504 is the last tax reminder notice before the IRS starts collection action.
CP 521 Installment Agreement Notice
Notice CP 521 reminds taxpayers that they have an installment agreement payment due to the IRS on a previous tax debt.
CP 523 Notice of Intent to Levy - You Defaulted on Your Installment Agreement
If you default on your installment agreement, you will receive a CP 523 notice. This notice informs a taxpayer how the IRS intends to collect the back taxes, which can include filing a tax lien, seizing bank accounts, or garnishing your pay.
Letter 531 – Notice of Deficiency
If the IRS determines that you owe additional tax or other amounts for a tax year, letter 531 explains how to dispute the adjustments. You will have 90 days from the notice date to file a petition with Tax Court without payment.
IRS Letter 525 - Examination Report
Letter 525 comes from a revenue agent and informs the taxpayer of proposed changes stemming from an IRS examination. This letter will explain what changes the examiner made to your tax return and requests payment of the balance due (or outlines the adjusted refund amount).
Letter 1058
Letter 1058 is the IRS’s final notice and intent to levy. It also reminds taxpayers that the IRS has the right to search for other assets like bank accounts that it can seize to pay the obligation.
Letter 668D
Letter 668D releases a levy, indicating that the tax debt has fully been satisfied. Letter 668D is sent to taxpayers after the time limit has expired for the IRS to collect on a debt (CSED). The IRS will send this letter to your employer, bank, and other financial institutions.