IRS Demanding Payment? Discuss with Your Accountant First
This time of year many of our clients receive notice letters from the IRS or the State Department of Revenue. The notice letters encourage you to write a check for unpaid tax, penalty, and interest from a previous tax year.
In some cases, these letters to be unclear or incorrect. With a simple response message or phone call from our office, the notice to pay could be reduced or forgiven entirely.
Please Let Us Know
There have been a number of occasions where a client paid the notice without consulting our office. This may have been done out of fear that the IRS will start hunting them down if the notice is not paid on time. We’ve found over the years it may make sense for us to respond to the notice before it has been paid.
We ask our clients to send us a copy of the letter or bring it to our attention before making any payment. After a brief examination, we should be able to assess whether the tax and penalty are reasonable or unwarranted. Please do not pay these notices without a review from our office first!
Common IRS Notices – Be Not Afraid!
IRS notices cover specific issues about an account or tax return. Here is a list of some common IRS notices (there are more than 100) and the reasons they are issued.
| CP Number | Reason |
| CP12 | The IRS made changes to correct a miscalculation on a return. |
| CP14 | First notice that a balance is due. |
| CP31 | A refund check was returned to the IRS. Need to update address. |
| CP42 | The amount of a refund has changed because the IRS used it to pay a spouse’s past due tax debt. |
| CP49 | All or part of a refund was used to pay a tax debt. |
| CP-90/ CP-297 | Final notice — notice of intent to levy and notice of the taxpayer’s right to a hearing. |
| CP-91/ CP-298 | Final notice before levy on Social Security benefits. |
| CP 161 | Request for payment or notice of unpaid balance. |
| CP 501 | First reminder notice that there is a balance due. |
| CP 503 | Second reminder notice that there is a balance due. |
| CP 504 | Final balance due notice. If amount is not paid immediately, the IRS will seize (levy) a state tax refund and search for other assets to levy. |
| CP 523 | Notice of default on installment agreement and imminent seizure (levy) of assets. |
| CP 2000 | Notice of proposed adjustment for underpayment or overpayment. |