Don't ignore tax notices

Taxes » Tax Law » Don't Ignore Tax Notices

Don't panic when that letter from the Internal Revenue Service arrives. Many tax notices can be dealt with simply and painlessly.

Each year, the IRS sends out millions of notices. Most of these let taxpayers know of common filing mistakes that mean a change in a tax bill. Others request additional information about a return. The notice normally covers a specific issue and offers equally specific instructions on what the IRS wants from you to settle the matter.

Commonly issued tax notices

Each IRS notice is identified by its CP, or collection process, number found in the upper right corner of the first page of the correspondence. Each also has a title in large, bold print near the center of page one.

Here are the most common tax notices and why they are issued:

Common tax notices
CP numberTax reason
CP 12Changes to correct a miscalculation on your return.
CP 14You owe money on unpaid taxes.
CP 49Overpaid tax applied to other taxes you owe.
CP-90C & CP-297C
(sent simultaneously)
Final notice -- notice of intent to levy and notice of your right to a hearing.
CP-91 & CP-298
(sent simultaneously)
Final notice before levy on Social Security benefits.
CP 161No math error, balance due.
CP 501Reminder notice -- balance due.
CP 504Urgent notice -- balance due, seizure of state income tax refund imminent.
CP 523Notice of default on installment agreement and imminent seizure of assets.
CP 2000Income and/or payment information on the return does not match IRS information.

If your notice isn't listed above, you can check the special notices page for the document. You also can call the IRS at the number listed on your notice or at the agency's toll-free help line at (800) 829-1040. Hearing-impaired and TTY users can call (800) 829-4059.


First, check your information

The first thing to do when you get a tax letter is to pull out the tax return in question. Compare your file copy with the IRS notice. You might find that you did indeed add when you meant to subtract or transposed a number or put an entry on the wrong line.

In cases where you agree with the change the IRS proposes to your tax account, no reply is necessary unless a payment is due. If you owe additional tax, follow the notice instructions about where to send the extra cash.

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