Understanding Your CP538 Notice


What this notice is about

This second notice is sent to tell the taxpayer we still haven’t received payment for taxes on Form 1040, U.S. Individual Income Tax Return, containing interest or dividend income after issuance of CP531.

What you need to do

Pay any taxes owed on your Form 1040 with interest or dividend income.

You may want to

Frequently asked questions

What is backup withholding?

Backup withholding is withholding on mostly interest and dividend income that the payer will withhold when we instruct them to do so.

What is the backup withholding rate?

The current rate is 24% and can increase or decrease with the tax laws.

How long will the payer continue backup withholding?

The payer should continue until we instruct them to stop or until the payee provides written certification from us that they’re no longer subject to backup withholding.

Tips for next year

  • File your tax return timely
  • Report all interest and dividend income
  • Pay all taxes due

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