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Business Filer Notices - Math Error Explanations for CP 268 - Form 990C, 990T, 1041, and all 1120 Filers

The table below contains a list of all Math Error explanations that may print on a CP 268 notice related to Form 990C, 990T, 1041, and 1120.  To find the ones that printed on a particular CP 268, look on the tear-off stub to find out which codes were assigned, then look up each code on the table below.

Code Description
01 We found an error in the computation of your total income.
02 We found an error in the computation of the credit for prior year minimum tax on Form 8801.
03 We found that the contributions deducted were more than the law allows.
04 We found an error in the computation of your taxable income.
05 We found an error in the computation of your total income tax.
06 We refigured your total income tax by using the alternative tax computation. This was to your advantage.
07 Your special deductions were more than the law allows.
08 The credit claimed was more than the law allows.
09 We found an error in the computation of your deductions.
10 We found an error in the computation of the tax due or overpayment amount.
11 Your Foreign Tax Credit was more than the law allows.
12 We found an error in the amount of Investment Credit applied against your tax.
13 We found an error in the amount of Work Incentive (WIN) credit applied against your tax.
14 We found an error in the computation of your alternative tax.
15 We found an error in the computation of your gains and losses on Schedule D.
16 We found an error in the computation of your gains and losses on Form 4797.
18 We found an incorrect amount of surtax exemption on Schedule J or on Form 1120FY.
20 We found an error in the amount shown as your exemption.
21 We found an error in the amount of Work Opportunity Credit applied against your tax.
22 Your deduction for additional first year depreciation was more than the law allows.
23 We found an error in the computation of the Alternative Minimum Tax.
24 We changed your Form 1041, U.S. Income Tax for Estates and Trusts, because:
- You computed your Alternative Tax incorrectly, or
- We computed your tax using the Alternative Tax because it reduced your tax.
25 We found an error in the computation of the Alcohol Fuels Credit or the Non Conventional Source Fuel Credit.
26 We found an error in the computation of the Research Credit.
27 We found that the estimated tax payments (Federal Tax Deposits and applied overpayment from last year’s tax) shown on your account do not agree with the amount claimed on your return.
28

We found an error in the computation of your overpayment. The amount credited to your next year’s estimated taxes, amount to be treated as paid by beneficiaries, and the refund amount did not total the overpayment claimed on your return.

We distributed your overpayment in the following priority:

  1. Amount as paid by beneficiaries;
  2. Amount credited to your next year’s estimated taxes;
  3. Your refund amount.
30 We found an error in the computation of Total Income Tax for a fiscal year with two tax rates.
31 We found an error in the computation of the General Business Credit on Form 3800.
32 We found an error in the computation of the Low Income Housing Credit on Form 8586.
33 We found an error in the computation of the Recapture of Low Income Housing Credit on Form 8611.
34 We found an error in the computation of the credit for prior year minimum tax on Form 8827.
35 We found an error in the computation of your Credit for Small Employer Health Insurance Premiums on Form 8941 or you do not qualify for the credit.
36 We found an error in the computation of the credit for federal tax on fuels on Form 4136.
37 We found an error on page 1 of your return when the credit for federal tax on fuels was transferred from Form 4136.
38 We found an error on page 1 of your return when your payment amounts were added.
39 We found that the amount reported as total estimated tax payments for the year differs from the amount we have credited to your account.
40 We adjusted your tax return as shown because we did not receive a reply to our request for additional information.
41 We computed your tax for you.
*42

(Forms 1120-F)

We changed your Form 1120-F, U.S. Income Tax Return of a Foreign Corporation, because:

- You computed the U.S. income tax paid or withheld at source incorrectly, or
- You computed the tax deducted and withheld under Chapter 3 incorrectly, or
- You computed or transferred Schedule W, Overpayment Resulting From Tax 
  Deducted and Withheld Under Chapter 3, incorrectly.

43 We can’t allow the amount you reported as federal income tax withheld because your return didn’t have the necessary Form(s) W-2 attached as verification.
44 We eliminated the estimated tax penalty for the above tax period. If you prepaid the penalty, we will refund it to you.
45 We found an error in the amount of the Orphan Drug Credit applied against your tax.
46 According to our records, you should file as an Estate using Form 1041 instead of filing Form 1040. We transferred the information submitted on your Form 1040 to Form 1041 and processed it using the applicable exemption amount and tax rates for an estate return.
88 We changed your telephone excise tax refund amount based on the information you provided.
89 We changed your tax and/or credits because we did not receive the additional information we requested. The change includes the disallowance of all or part of your telephone excise tax refund you requested on your tax return. We previously sent you a separate letter explaining the disallowance.
90 Fill-In Narrative.
99 A refund cannot be sent to you at this time for the part of the refundable Energy Credit you reported on Form 3468 that is more than the tax you owe. Congress must approve the funding, but as soon as the appropriation is made the refund of this credit will be sent to you or applied against any taxes you still owe.
Page Last Reviewed or Updated: 20-May-2013