Receiving a tax notice or letter is never a pleasant experience. It can be confusing and frustrating if you don't understand why you received the notice in the first place. That's why we wrote The Ultimate Guide to Tax Notices and created a tax notice library filled with the most common tax notices and letters you might receive. We believe the process of staying compliant with your taxes should be as effortless as possible.
General Information
- What is the notice number? CP23
- What government agency sends this notice? The Internal Revenue Service (IRS)
- What is this notice about? The IRS changed your return because they found a difference between the amount of estimated tax payments on your tax return and the amount they posted to your account. You have a balance due because of these changes. The notice may also cover other changes the IRS made while processing your return.
- What should you do if you receive this notice?
- Read your notice carefully. It will explain how much money you owe on your taxes.
- Compare the payments on the notice to your records.
- Verify the IRS listed all your estimated tax payments.
- Check the payments the IRS applied (if any) from the prior year.
- If you agree with the changes the IRS made,
- Pay the amount owed by the date on the notice. You may do this online at https://www.irs.gov/payments.
- Establish a Payment Plan or Installment Agreement if you can't pay the full amount you owe. You may do this using the Online Payment Agreement tool, or by contacting the IRS at the number on the notice.
- Correct the copy of your tax return that you kept for your records. Don’t send your copy to the IRS.
- If you don’t agree, contact the IRS within 60 days from the date of your notice
- By telephone: Call the IRS at the toll-free number shown on your notice. Some cases require additional information that you may provide verbally. Either way the IRS may be able to correct your account immediately.
- By mail: Please include a copy of the notice along with your correspondence or documentation and allow 30-60 or more days for a resolution.
- Read your notice carefully. It will explain how much money you owe on your taxes.
FAQs & Additional Information
- I don’t pay estimated taxes. Why did I get this notice? The most common cause is an incorrect entry on the estimated tax line of the tax return. If this happened, call at the number on your notice.
- What should I do if I find the IRS misapplied a payment or haven't credited a payment that I made? Call the IRS at the number on your notice. Have a copy of your tax return and documentation (such as cancelled checks or amended return) ready when you call. The IRS will discuss the issue with you and give you further instructions.
- What is an estimated tax penalty? The IRS may assess an estimated tax penalty if you didn’t pay enough tax throughout the year, either through withholding or by making estimated tax payments.
- How do I adjust my estimated tax payments? Complete a Form 1040-ES, Estimated Tax for Individuals.
- Do I receive a penalty if I cannot pay the full amount? Yes. You will usually receive a late payment penalty. If the IRS adjusts your account (such as fixing a misapplied payment), the late payment penalty and interest will adjust automatically. For additional help, see Penalty Relief.
- Do I have to pay interest on the amount I owe? To avoid interest charges, pay the amount owed by the due date on the payment coupon. The IRS can't reduce interest for reasonable cause or first-time relief. They are required by law to charge interest, and it will continue until your account is fully paid. However, if the IRS reduces your tax or penalty, the interest will automatically be reduced.
What does it look like?
Resources
Looking for more information about this notice? Here are some helpful resources:
- About the notice - https://www.irs.gov/individuals/understanding-your-cp23-notice
- Example copy of the notice - https://www.irs.gov/pub/notices/cp23_english.pdf
How can we help you today?
Are you looking for more information about your tax notice or other challenges? DiMercurio Advisors has a dedicated team supporting tax notices, audits and more. We are passionate about ensuring you are well-informed and in control of your tax situation.
