What Are the Most Common IRS Notices?

Posted on April 27, 2022










As a taxpayer, you have the right to be notified of any changes, activities, or actions regarding your tax account. These updates or reminders come in computer-generated letters or CP notices; CP stands for Computer Paragraph. The following are the most common CP notices sent by the IRS:

The CP14 is a notice of balance due and is considered the notice that starts the IRS collections process. The CP14 lets you know that you owe money for unpaid taxes. The notice will indicate the amount of tax owed, any penalties, and interest accrued on your outstanding balance.

Failing to pay your taxes by the due date results in the past due tax obligation. The CP501 notifies you of your unpaid back taxes and how much interest you can expect to accrue. The CP501 is considered the 1st reminder related to due federal taxes. It is sent if you do not respond to the CP14.

If you ignore the CP501 notifying you of your unpaid back taxes, you will receive the CP502. Expect the total amount due on the CP502 to be higher than the amount owing on the CP501. This is due to the additional interest that has accrued since you received the 1st reminder.

The CP503 serves as the second notice reminding you that you still owe a balance on your taxes. You’re receiving the CP503 because you either didn’t make a payment or you haven’t responded to the CP501 or the CP502.

If you receive a CP504, you have probably ignored the CP14, CP501, and CP502. Consider the CP504 as an urgent notice as it represents an intent to levy your assets if you do not pay the amount due immediately or set up a payment arrangement.

A miscalculation on your tax return may result in you owing money on your taxes. The IRS will send you a CP11 to let you know the total amount due and the due date. If you disagree with the changes, contact the IRS within 60 days of the notice to dispute the new calculations.

When the IRS discovers a miscalculation on your tax return, they will make changes that may impact the estimated tax payment you’ve requested to be applied to the next tax year. The IRS will send you a CP10 to notify you of these changes and a summary of the miscalculation.

The IRS may have found a difference between the amount posted to your account and the amount of estimated tax payments on your tax return. The CP24 will notify you if the difference has led to a potential overpayment credit due to the changes made by the IRS to correct the difference.

If you have a payment agreement such as an installment plan, you will receive a CP521 if you defaulted on the installment agreement. The notice will tell you how much you still owe, the interest accrued, and the due date to remit full payment. It will also include details on any penalties for canceling the terms of the agreement.

If you default on your installment plan, you will receive the CP523 notifying you that you’ve broken the payment agreement and the IRS has the intent to seize your assets or garnish your wages.

Have you recently received a notice from the IRS and don’t know how to respond? We’re here to help Chicago taxpayers with their tax concerns and troubles. Contact us at 877-447-7529.

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