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What this notice is about
We received your Form 8038-CP, Return for Credit Payments to Issuers of Qualified Bonds. This notice explains why we reduced the credit payment you requested.
What you need to do
You don't need to take any action.
You may want to
Keep this notice for your records.
Frequently asked questions
Will I receive a notice for each Form 8038-CP I filed? (updated Mar. 2, 2026)
Yes. We'll send a separate notice for each form.
Why was my credit payment reduced? (updated Mar. 2, 2026)
Under the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, refund payments issued to and refund offset transactions for certain state and local government filers of Form 8038-CP are subject to sequestration.
This means that any refund payments and refund offset transactions processed between October 1, 2020, and September 30, 2030, will be reduced by 5.7%. The reduction applies no matter when the IRS received your form.
Can I appeal the decision to reduce my refund? (updated Mar. 2, 2026)
No. The law requires this reduction, and it cannot be appealed.
Need help?
- You can authorize someone to represent you before the IRS or inspect and/or receive confidential tax information.
- You may be eligible for free help from the Taxpayer Advocate Service (TAS).
- You may qualify for help from a Low Income Taxpayer Clinic.
- If you didn’t receive a letter or notice, use Let us help you.