Why Would the IRS Send Me a Letter?



Forosophobia is the fear of taxes and the IRS. I read an article about this fear in Psychology Today. As I was reading the article I recognized a lot of my clients that owe six figures to the IRS. No, their picture wasn't in the article. However, their characteristics were.

They go into analysis paralysis before even opening the letters that the IRS sends them. Often times they come to me and have a stack 2-4 inches thick of unopened mail from the IRS. Thinking that the IRS is always one step behind them with handcuffs for jail. They could have avoided a lot of penalties and turmoil if they would have opened the letter. My advice to them is to breathe. My advice to you is the same.


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There are a variety of reasons the IRS will send a notice or letter. The IRS will send you a letter if there is an issue with your return or to notify you of changes made to your account. They may also be asking you for more information or for payment.

Before you go into panic you should know that most of these notices you can handle without calling the IRS. Especially now, as they are improving their website and taxpayer tools.

So to ease your pain I want to share 20 of the most common notices the IRS sends out and what they mean.


  1. CP01 - Identity theft claim verified.

  2. CP01A- Identity protection personal identification number (IP PIN) the IRS sent the taxpayer.

  3. CP05 - Refund is being held while the IRS reviews your tax return.

  4. CP14 - Inform taxpayer of unpaid taxes.

  5. CP32 - The IRS sent a replacement refund check.

  6. CP45 - Unable to apply the overpayment to estimated tax as requested.

  7. CP49 - All or part of your refund has gone to pay your tax debt.

  8. CP59 - No prior-year tax return on file.

  9. CP79A - Two-year ban from claiming certain refundable credits.

  10. CP90 - Notice of intent to levy for you for unpaid taxes.

  11. CP91 - Notice of intent to levy up to 15% of Social Security benefits.

  12. CP92 - The IRS levied your state refund for unpaid taxes.

  13. CP166 - Monthly payment not processed due to insufficient funds.

  14. CP231 - Your refund or credit payment was returned. Update your current address.

  15. CP501 - Reminder of balance due.

  16. CP521 - Reminder that a payment is due on your installment agreement.

  17. CP523 - Intent to terminate your installment agreement and levy your assets. Payment is due immediately. The taxpayer has defaulted on the agreement.

  18. CP2000 - Notice of proposed changes to the tax return.

  19. CP2057 - Information received by the IRS is not reported on the tax return. Request for an amended return.

  20. CP2566 - No tax return received so IRS is calculating your tax return based on third-party information.

If you'd like more information about responding to the IRS check out the Tax Relief with Timalyn Bowens podcast. Follow it on your favorite podcast platform.


This is not an all-inclusive list of IRS notices. If you have a notice not listed above let me know what it is in the comments. I'll let you know what it means because back taxes shouldn't ruin your life.

 

Timalyn S. Bowens EA is America's Favorite EA and Louisville's Tax Expert that will work hard to find a customized legal solution for you! As an Enrolled Agent licensed through the Internal Revenue Service Timalyn is able to fight the IRS for taxpayers in all 50 states.



When you are facing questions regarding your personal or business taxes, working with a professional makes all the difference. At Bowens Tax Solutions, we serve our Louisville-area neighbors by providing the tax services and knowledge needed to succeed. We are here to assist you with your tax issues and preventative care. Visit our website at www.bowenstaxsolutions.com for more information.

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