While the IRS sends lots of notices/letters during the year, common ones related to IRS adjustments made to your tax return are in the CP11 to CP14 range.
These notices are mainly related to calculation errors found in your tax return that the IRS was able to adjust. As a result, your refund amount may change or you may owe additional taxes.
CP14 letters are the most prevalent during May and June, as the IRS is required by law to be sent 60 days after they assesses a tax liability. Tax Payers have 21 days to make a payment or enter a payment plan, or face significant penalties.
Below is a summary of these IRS notices (or letters). Note the subtle difference in messaging.
|CP11||The IRS has made changes to your filed tax return due to an identified miscalculation. You will likely owe money on your taxes as a result of these changes if your refund cannot be offset|
|CP12||The IRS has corrected one or more mistakes on your tax return. The notice will state if you are now either due a refund or your original refund amount has changed|
|CP13||The IRS changed your filed return because of a miscalculation. You are not due a refund nor do you owe an additional amount (liability) due. Your IRS account balance is zero|
|CP14||This is sent because you owe money on unpaid taxes and you now have a tax liability with the IRS that needs to be paid. It could be due to a mistake with your filing that was picked up the IRS during processing your return|
What to do if I you get one of these notices?
While it is natural to panic or get stressed when receiving one of these letters from the IRS, the main thing to realize is that you won’t suddenly have a looming tax obligation or that the cops will be at the door to get the federal monies you may owe.
In most cases the notice will just provide details on what actions the IRS has taken and if there is anything pending, including additional payments, from your end.
The main thing to do is to carefully review the notice carefully and follow the actions or instructions noted on the letter.
If you are unsure of the adjustment do some research online (on reputable sites) and/or talk to a tax professional to get some help if the amounts are large. You can also call the toll-free IRS number listed on the notice.
Generally you won’t have to do anything if you agree with the changes made by the IRS and no additional payment are due from you. Just file away the notice for next years tax return.
You can also appeal in writing or calling the IRS, generally within 60 days, if you DO NOT agree with the adjustments made. Instructions on how to do this will be listed on the notice you receive.
What if I owe taxes and how do I make a payment?
Per the TAS, if the taxpayer does not contest the notice within the 60-day time period, the IRS will move toward its normal collection procedures if the assessment is not paid by the tax filer. They may also retain the refund not paid due to the math error adjustment.
If you agree with the payment, but cannot make it you can enter an IRS payment plan to make small payments over time until your IRS debt is exhausted. You can do this online using the IRS’ Online Payment Agreement tool.
The IRS notice will provide details on how to make the payment which you can generally do via IRS Direct Pay. or by credit or debit card
You may also have to pay interest and penalties for taxes that are overdue, which will be listed on the notice.
What if my refund has increased?
If your refund has increased you will normally see this in a CP12 notice. If you agree with the changes made, no action is needed and you will receive your additional refund check within 6 weeks. This assumes no other IRS obligations or debts which could offset your additional refund payment.
You won’t need to file an amended return following IRS adjustments, but you should keep a note of the changes made in case you need this for your following years tax filing.