Don't Panic About These Common IRS Notices — Do This Instead

Posted on: 15 May 2019

After tax season is over, some taxpayers will receive correspondence from the IRS. While this prospect is often scary, there is no need to panic. Here are the five most common letters that you may see after filing your income taxes, as well as what to do next.

CP12. This letter notifies you that you likely made a math error on your return. The result was that you overpaid taxes and are due a refund. This is good news! If you and your preparer agree with the changes made, you don't need to do anything but wait for the refund check in 6 to 8 weeks on average.

CP14. This notice is simply a statement that you haven't paid all your income taxes due. Most taxpayers get this letter if they filed with a balance due and haven't paid by the regular due date of April 15. If the balance on the letter is the same as what is on your signed return, you should pay the balance due or go to the IRS website to make payment arrangements.

CP49. A CP49 notice alerts you that your income tax refund has been used to pay other taxes already due. This often happens when a person still owes taxes from a prior year. In the letter, you should see the breakdown of what was due and what was used to pay it. 

CP2000. The IRS regularly verifies information on your return with information from other sources. It will cross-check your income from each employer (listed on your Form 1040) as reported in their Forms W-2. In addition, verification information could come from other taxpayers' returns, Forms 1099, and Forms 1098. If there is a discrepancy, the IRS notifies you. Check with your tax preparer to determine the accuracy of the new information. 

CP90. You should take immediate action if you receive Notice CP90. This form letter notifies taxpayers if the IRS is taking further, and serious, collection action. A tax lien is the legal authority to seize money from future tax refunds or even assets like real estate, vehicles, or bank accounts. Do not ignore this notice. Instead, contact the IRS to work out payment arrangements or contact a CPA or tax attorney for counsel.

While no IRS notice is fun to receive, clearly most of them are not cause for undue worry. No matter what type of letter you get, contact an experienced tax preparation service to decide on the best course of action to put this behind you.