Understanding your CP539 Notice

 

What this notice is about

This letter is the fourth and final notice we’ll send if the taxpayer hasn’t yet resolved the underreported or unpaid interest and dividend income with us. If the taxpayer doesn’t resolve the issue within 120 days from the date we mailed the first notice, we’ll send a final "C" notice and put backup withholding into effect.


What you need to do

  • File Form(s) 1040, U.S Individual Income Tax Return  if you haven’t already filed.
  • Review your filed Form 1040 for underreported interest or dividend income.
    • File an amended Form 1040 for any underreported interest or dividend income.
  • Pay any taxes owed on Form 1040 with interest or dividend income.

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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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