- 21.3.1.1 Notice Overview
- 21.3.1.2 What Is a Notice?
- 21.3.1.3 Notice Resolution Actions Research
- 21.3.1.4 Notice Descriptions
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This section provides guidelines for identifying and resolving inquiries concerning Computer Paragraph (CP) notices, internal notices and notices issued during the processing of a return. Guidelines for balance due notices and delinquent return notices are found in IRM 5.19.1, Liability Collection— Balance Due, and IRM 5.19.2, Liability Collection–Return Delinquency. See Document 6209, IRS Processing Codes and Information, Section 9 for a complete list of notices.
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Each subsection in this section presents an overview of a specific notice or letter, general procedures for working the notice, and a reference to the Internal Revenue Manual (IRM) for detailed procedures. If during a contact any of the following occur:
If And Then 1. It appears there is a hardship situation or
2. The taxpayer insists on being referred to the Taxpayer Advocate Service (TAS) or
3. The contact meets TAS criteriaYou cannot resolve the taxpayer's issue the same day Prepare and forward Form 911, Request for Taxpayer Advocate Service Assistance and (Application for Taxpayer Assistance order), to the local Taxpayer Advocate. See the Taxpayer Advocate Service Public Site http://tasnew.web.irs.gov/index.asp?pid=2324
Caution:
Before disclosing any tax information, you must be sure you are speaking with the taxpayer or authorized representative. See guidelines in IRM 21.1.3, Operational Guidelines Overview. Also, before leaving any messages on a taxpayer's answering machine, review IRM 11.3.2.6.1, Leaving Information on Answering Machines/Voice Mail. Fax procedures contained in IRM 11.3.1.10, Facsimile Transmission of Tax Information, must be reviewed prior to faxing confidential information to the taxpayer.
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The Notice Gatekeeper Office is designated as the point-of-contact when significant volumes of erroneous notices are issued or are at risk of being issued. It is the responsibility of all IRS employees to report erroneous notices after identifying them. Employees who identify a potentially erroneous notice should discuss the notice with their lead or manager to determine whether it is truly erroneous.
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Examples of erroneous notices include:
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Nonsensical/garbled content (i.e., the text makes no sense or is unreadable)
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Incorrect fill-in information (e.g., dollar amounts, math error codes, etc., that don't match what is present on the Integrated Data Retrieval System (IDRS))
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Misspellings, typographical errors, or incorrect text in the body of the notice
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If the notice is erroneous or it isn't possible to determine, report the erroneous notice by:
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Submitting feedback through the Notice Gatekeeper Web Site (http://gatekeeper.web.irs.gov/directory.asp), or
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Calling or emailing a member of the Notice Gatekeeper staff. A staff directory is located at http://gatekeeper.web.irs.gov/directory.asp
Note:
Employee should include details of the error and how it was identified (e.g., taxpayer phone call or correspondence).
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A CP notice results from:
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Input of notice codes
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Computer analysis of an account on Master File (MF)
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Posting of a transaction
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Internal notices/transcripts are issued to alert IRS employees of possible necessary action. Notices may:
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Request payment
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Give instructions
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Inform
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Request information
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Propose penalties or assessments
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Notice (CP) numbers usually are printed in the upper right corner of a CP notice. Each notice contains taxpayer's name, address, Taxpayer Identification Number (TIN), and a computer generated or pre-printed message.
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Submission Processing Notices:
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If a return is not processable due to missing information, Submission Processing sends the taxpayer a notice requesting the information. The Internal Revenue Restructuring and Reform Act of 1998 (RRA '98) requires the inclusion of telephone numbers on most notices. The phone number shown on these notices is the Toll-Free Customer Response line appropriate for the taxpayer's Business Operating Divisions (BODs).
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These notices are pre-printed, some have boxes checked to indicate exactly what information is needed (a single copy is sent to the taxpayer). A return envelope is enclosed with the notice.
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These returns have not completed processing and Integrated Data Retrieval System (IDRS) shows a dummy module with a Letter 12C, Individual Return Incomplete for Processing or ERINV shows a Letter 12C. Encourage the taxpayer to return the requested information in the envelope provided along with a copy of the notice. If the taxpayer returns the notice with the information, his/her return is treated as filed on the original received date.
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Settlement Notice—Informs the taxpayer of payment and interest due, math errors, and adjustments.
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Math Error Notice—Informs taxpayer of a math error found during processing and identifies the line on the return where the error occurred.
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Balance Due Notice—Requests payment, generates if a return does not have a math error and has a balance due. This is the first notice of balance due.
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Adjustment Notice—Informs taxpayer of adjustment made to the account by examination, adjustment, or taxpayer request. Generally the fourth and fifth digits of the Document Locator Number (DLN) of a Data Processing (DP) adjustment are 54. The fourth and fifth digits of the DLN of an Examination adjustment are 47.
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Offset Notice—Informs taxpayer of the offset of an available overpayment to an outstanding debit balance.
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Information Notice—Issued to provide information internally or to taxpayer. A response is not needed.
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Credit Transfer Notice—Informs taxpayer of a credit transfer when the CORR–DATE filed in FRM 34 is overlaid.
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IDRS Notice—Issued as a subsequent balance-due or return delinquency notice.
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The following actions are common to all notice resolutions.
If And Then Refund is due Normal processing time has not elapsed, per IRM 21.4.1.3 Advise taxpayer of normal processing time, per IRM 21.4.1.3.1.1, Return Not Found Refund is due Normal processing time has elapsed Research, per IRM 21.4.1, Refund Research There is a balance due Taxpayer agrees 1. Request full payment.
2. See IRM 5.19.1.5.2, Can Full Pay Balance Due Now (Payoff).There is a balance due A payment is not properly credited Transfer credit, per IRM 21.5.8, Credit Transfers There is a balance due Taxpayer agrees but cannot pay in full *Set up a payment plan, per IRM 5.19.1.5.4, Can Pay by Installments Penalties and interest are assessed Taxpayer does not agree See IRM 20.1, Penalty Handbook or 20.2, Interest . Taxpayer does not agree with notice Documentation is needed from taxpayer or files 1. Request documentation.
2. Open a control base.
3. If necessary suppress all balance due notices (STAUPS/TC470).
4. See IRM 21.5.4, General Math Error Procedures , IRM 21.5.10, Examination Issues, and IRM 21.7.12, Non-Master File (NMF) Adjustments.
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Section 3201(d) of RRA 98 requires the Service to (whenever practicable) mail duplicate notices separately to each individual filer of a joint tax return. This process is referred to as dual notice issuance. Systemic generation of dual notices began in calendar year 2001.
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Dual notices are issued as follows:
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All notices are sent dual if Service records indicate filers live at different addresses.
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If Service records indicate filers live at the same address, then any notice required by statute must be sent separately to each spouse. In addition, certain other notices that contain elements of notices required by statute must be sent separately. For examples of notices that are sent separately, see IRM 4.10.1.6.8, Separate Notice Requirements for Joint Returns, and IRM 5.1.10.4, Contact Letters .
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Notices that do not need to be sent separately include Submission Processing pipeline notices (including Math Error notices) and Collection installment agreement monthly reminder notices. Most of the dual notices include language to explain why the Service is sending seemingly duplicate notices.
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If taxpayers have questions concerning notices of deficiency, direct them to call the number on the notice, or write to address shown. Advise of the following:
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If they choose to petition Tax Court, they have 90 days from the notice date.
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A telephone call or written communication does not extend the time for filing a petition with the Tax Court.
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The last date to file a petition is included in the header information of the letter.
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The most common notices are listed below and divided into four categories:
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IMF Individual Master File (IMF) notices
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Business Master File (BMF) notices
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Non-Master File (NMF) notices
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Submission Processing Notices
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Notice CP 05, Information Regarding Your Refund, is issued to taxpayers with Criminal Investigation - Fraud Detection Center (CI-FDC) Z or P- freezes on their refunds. The notice informs the recipient their refund is being held pending additional review.
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See IRM 21.5.6.4.43, Notice CP 05, Information Regarding Your Refund, Issued to Taxpayers with CI-FDC Z or P Freeze, for additional information.
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A CP 08 is issued to notify a taxpayer of potential eligibility to claim additional Child Tax Credit. The notice is issued when the taxpayer:
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Computes an amount for the Child Tax Credit, has zero tax liability, and fails to use the remaining portion of the credit to claim the Additional Child Tax Credit, or
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Indicates eligibility for the Child Tax credit (by checking the boxes on line 6c) but does not claim the Child Tax Credit due to zero tax liability and does not claim the Additional Child Tax Credit.
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See IRM 21.6.3.4.2.8.3, CP 08, Additional Child Tax Credit, for procedures on working CP 08 notices.
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Notifies taxpayer of possible eligibility for Earned income Tax Credit (EIC).
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Answer questions concerning eligibility and how to claim the credit. If the taxpayer qualifies, advise as in b through d.
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Advise the taxpayer to provide the qualifying child's Social Security Number (SSN) and sign the notice.
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Inform the taxpayer that if the EIC is allowed and the taxpayer has more than three children, the additional Child Tax Credit may be affected. Advise the taxpayer to complete Form 8812, Additional Child Tax Credit. Pub 972, Child Tax Credit, has more information.
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Instruct the taxpayer to submit the completed and signed CP 09 in the envelope provided.
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Refer to IRM 21.6.3.4.2.7.8, EIC - CP 09/CP 27.
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Notifies taxpayer that an overpayment applied to the next year's tax as a credit-elect was reduced due to an error on a 1040-series return.
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Research IDRS.
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Explain reason for notice.
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Take actions indicated in the following table.
If And Then Taxpayer agrees A refund is due 1. Advise taxpayer to correct his/her copy of the return.
2. Taxpayer should receive refund in 6 weeks of the notice date if no other Federal taxes or obligations are owed and a refund amount remains.
3. Explain a Treasury Offset Program (TOP) offset to taxpayer.Taxpayer agrees A balance is due 1. Advise taxpayer to correct his/her copy of the return.
2. Request full payment.
3. See IRM 5.19.1.5.2, Can Full Pay Balance Due Now (Payoff).Taxpayer does not agree A refund is due 1. Adjust account using oral statement if applicable.
2. Request documentation only if necessary.
3. Advise taxpayer he will receive the refund in 6 weeks if he owes no other taxes.
4. Advise and explain a TOP offset to the taxpayer.Taxpayer does not agree A balance is due 1. Refer to IRM 21.5.4, General Math Error Procedures, for information on working math errors.
2. Advise taxpayer to pay balance due if applicable. -
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Issued as a first notice. Notifies taxpayer of an error in the math on an individual return that results in a balance due. Refer to table in IRM 21.3.1.4.4, CP 10, Math Error, Overpaid Credit, above for required actions and IRM references for full instructions.
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During processing a Letter 12C is sent to IMF taxpayers requesting information missing from the return.
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Returns are not returned to the taxpayer. The return is suspended awaiting response from the taxpayer.
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Check IDRS for the following Information:
If Then Code and Edit sends the request for information See IDRS for a dummy module with the information Letter 12C. Error Resolution sends the request for information Use Command Code (CC) ERINV to view the Letter 12C. The taxpayer has received the Letter 12C Advise the taxpayer to respond to the letter supplying the requested information.
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Issued as a first notice to inform the taxpayer of an error in the math on an individual return that changes the refund amount. Refer to table in IRM 21.3.1.4.4, CP 10, Math Error, Overpaid Credit, above for required actions and IRM references for full instructions.
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Issued as a first notice when:
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EIC was claimed on a return and there is a math error
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There is an invalid SSN (primary or secondary) on the return.
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The notice informs taxpayer of an error in the math on an individual return that changes the refund amount. Refer to table in IRM 21.3.1.4.4, CP 10, Math Error, Overpaid Credit, above for required actions and IRM references for full instructions.
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Informs taxpayer that:
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An error occurred in the math on an individual return.
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Payment is not required if the balance due on the notice is less than $5.00.
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An overpayment of less than $1.00 is not refunded without a written request from the taxpayer. Refer to the table in IRM 21.3.1.4.4, CP 10, Math Error, Overpaid Credit, above for required actions and to IRM references for full instructions.
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Issued as a first notice to taxpayer of a balance due when no math error or ES discrepancy exists. Do the following:
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Research IDRS.
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Explain reason for balance due. It may be the result of a missing payment or the assessment of a penalty.
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If taxpayer agrees with the notice, request payment in full (see IRM 5.19.1, Balance Due).
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If a payment is missing, research IDRS for payment (see IRM 21.5.8, Credit Transfers).
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Check for pending installment agreement (IA), the taxpayer may have requested an IA.
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Notifies taxpayer a civil penalty was assessed.
If Then Taxpayer agrees with the notice Request payment in full. See IRM 5.19.1, Balance Due. Taxpayer disagrees 1. Advise taxpayer to send documentation to assessing function.
2. See IRM 20.1, Penalty Handbook.
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Notifies taxpayer a trust fund recovery civil penalty was assessed.
If Then Taxpayer requests a payment plan Establish an installment agreement (IA). Refer to IRM 5.19.1, Balance Due. Taxpayer disputes assessment. Explain that he/she was identified as a responsible officer of a corporation that owes trust fund monies. Taxpayers claims he/she is not a responsible officer. Refer taxpayer to the Advisory group that handles the address where they reside. Refer to IRM 5.19.1.7.4.2, Disagreement with TFRP Assessment.
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Issued as a first notice to inform taxpayer of an error in the math on an individual return resulting in an overpayment that was applied to another IMF tax liability.
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Explain offset process if requested to do so.
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See IRM 21.3.1.4.4, CP 10, Math Error, Overpaid Credit, above for resolution of math error notices.
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Notifies taxpayer of a refund of unfrozen estimated credits.
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Advise taxpayer no action is required.
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Tell taxpayer that he/she will receive refund within six (6) weeks of the notice date if no other Federal taxes or obligations are owed and a refund amount remains.
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Notifies taxpayer a portion of the refund was withheld due to an unallowable item on the return. Advise taxpayer that he/she will receive an explanation of the adjustment by the date stated on the notice.
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Notifies taxpayer of one or more unallowable items on the return and of a balance due. Advise taxpayer that a response is necessary.
If Then Taxpayer agrees with notice Advise taxpayer to sign and return notice. Taxpayer requests a payment agreement See IRM 5.19.1, Balance Due. Taxpayer disagrees with notice Advise taxpayer to return bottom portion of notice along with supporting documentation or explanation.
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Notifies taxpayer of one or more unallowable items on the return as well as an overpayment. Advise taxpayer this notice requires a response.
If Then Taxpayer agrees with tax increase Advise taxpayer to sign, date, and return bottom portion of notice. Taxpayer disagrees Advise taxpayer to submit documentation with bottom portion of the notice. Taxpayer has returned notice and a refund is due Advise taxpayer that refund will be received in 4 to 6 weeks if no other tax is due. Also advise of possible TOP offset.
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Informs taxpayer of a DP tax adjustment resulting in a balance due when account is in Taxpayer Delinquent Account (TDA) Status.
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Research IDRS.
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Explain the reason for the notice.
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For resolution, follow the table below:
If And Then Taxpayer agrees with notice A refund is due 1. Advise taxpayer that a refund will be issued within 2 weeks if no other Federal Taxes or obligations are owed and a refund amount remains.
2. If 2 weeks have passed, see IRM 21.4.1.3, Refund Inquiry Response Procedures.Taxpayer agrees There is an even balance Advise no action is necessary. Taxpayer agrees A balance is due 1. Request payment in full. See IRM 5.19.1, Balance Due. Taxpayer indicates a payment was made Has not been credited 1. Research for missing payment.
2. Transfer the payment if needed.
3. See IRM 21.5.8, Credit Transfers.Taxpayer disagrees Adjustment resulted from a DP tax adjustment Make necessary corrections with oral statement, request written documentation if needed. Adjustment resulted from examination of the return Taxpayer disputes deficiency assessment Advise the taxpayer that under certain conditions, you can request an audit reconsideration. See IRM 4.13, Audit Reconsideration. Adjustment resulted from return executed by the service under IRC 6020(b) Taxpayer disputes deficiency assessment Advise taxpayer that he or she can request an audit reconsideration if: -
The taxpayer has information that was not previously considered which, if timely submitted, would have resulted in a change to the assessment.
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An original delinquent return is filed by the taxpayer after an assessment was made as a result of a return executed by the IRS under IRC 6020(b) or other substitute for return procedures.
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There was an IRS computational or processing error in assessing the tax. See IRM 4.13.1.7, Acceptance of Request.
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Informs taxpayer of a discrepancy between estimated tax credits claimed on the return and credits posted to the account, resulting in a balance due of $1.00 or more.
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This notice also notifies taxpayer of a math error.
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Review payment amounts and dates.
If Then A payment or credit-elect is missing 1. Research for missing payment.
2. Transfer credit if appropriate.
3. Refer to IRM 21.5.8, Credit Transfers.Taxpayer agrees with the notice 1. Request full payment of balance due. See IRM 5.19.1, Balance Due.
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Informs taxpayer of discrepancy between estimated tax credits claimed on return and credits posted to the account, resulting in an overpayment of $1.00 or more. In addition to a discrepancy in estimated tax payments, a CP 24 may advise taxpayer that his/her return contained a math error or that the statute for refund has expired.
If Then This is an estimated tax discrepancy Review payment dates and amounts shown on the notice. Taxpayer indicates a payment is erroneously credited to account 1. Research IDRS to locate account where payment belongs.
2. Apply to correct account, or
3. If you cannot locate correct account, transfer to Excess Collection or Unidentified File.
4. See IRM 21.5.8, Credit Transfers.Taxpayer received a refund of an erroneously credited payment See IRM 21.4.5, Erroneous Refunds. Taxpayer agrees with notice 1. Advise taxpayer a refund will be issued within 6 weeks of the date on the notice.
2. Advise taxpayer of a possible offset.Notice contains math error information See math error notice resolution in IRM 21.3.1.4.4, CP 10, Math Error, Overpaid Credit.
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Informs taxpayer of a discrepancy between estimated tax credits claimed on return and credits posted to the account, resulting in an overpayment of less than $1.00, or a balance due of less than $5.00.
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This notice also informs taxpayer that no refund is issued for less than $1.00 unless he/she requests it in writing, and no payment is necessary of a balance due.
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See table in IRM 21.3.1.4.18, Estimated Tax Discrepancy above for resolution.
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Informs taxpayer without children of possible eligibility for the EITC.
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Answer questions about eligibility.
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Advise how to claim the credit.
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If the taxpayer qualifies, advise taxpayer to sign the notice and return in the envelope provided.
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See IRM 21.6.3.4.2.7.8, EIC - CP 09/CP 27
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Issued to request information if an amended return posts and no original return was received.
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See IRM 21.5.6.4.7, E— Freeze instructions.
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Informs taxpayer all or part of an overpayment has been applied to an estimated tax penalty. Advises taxpayer all or some of required estimated tax payments were not timely.
If Then Taxpayer indicates a payment was not credited to account Research for missing payment. Overpayment was to be applied to next year's estimated tax Advise taxpayer to increase payments on remaining vouchers. Taxpayer qualifies to have part or all of penalty removed Advise taxpayer to complete Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts, and submit to Customer Service.
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Notifies taxpayer that Form 2210, Underpayment of Estimated Tax by Individuals and Fiduciaries, was incorrect, resulting in a refund.
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A response is not required unless taxpayer disagrees.
If Then Taxpayer disagrees Review Form 2210 and explain how amount was computed. Taxpayer still disagrees Advise taxpayer he/she may either:
1. Return the voided check with a written explanation of why they disagree, or
2. Keep check and pay penalty if he/she receives notice that a penalty has been assessed. -
See IRM 21.4.3, Returned Refunds/Releases, for more information on returning refund checks.
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Informs taxpayer a refund was returned as undeliverable. The notice asks taxpayer to supply the correct address.
If Then Taxpayer states he/she has not moved and gives address that exactly matches Master File (MF) Refer to IRM 21.4.3, Returned Refunds/Releases for procedures before allowing interest to compute. There is a new address 1. Input address with CC CHK64.
2. See IRM 21.4.2, Refund Trace and Limited Payability Overview.
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Issued when an original refund check is not cashed within one year. The CP 32 is sent and the refund reissued. The CP 32A informs taxpayer we will not reissue again without a request from the taxpayer.
If Then Taxpayer has moved Correct address. More than 30 days have passed since the notice was issued and taxpayer has not received the refund See IRM 21.4.1, Refund Research.
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Informs taxpayer of a delay in processing a return (in the unpostables unit).
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See IRM 21.5.5, Unpostables, for resolution of unpostables.
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Advise of appropriate processing time.
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This is an internal notice issued when there is a duplicate filing condition on the module, the duplicate filing case is controlled on IDRS and assigned for review. See IRM 21.6.7.4.4.1 , CP 36 — Control, for more information.