This notice is issued to inform the taxpayer that the IRS has adjusted their tax return and there is a balance due because of the adjustment. The notice will explain the changes to the tax return and request payment of the balance due.
Sections of the CP 11:
- Header Section
This area contains the Notice Number, the applicable tax year, the notice date, your Social Security Number, and the IRS contact number.
- Summary Section – “Amount due”
The Summary Section of the CP11 provides a brief summary of the reason why the IRS has adjusted the return and outlines the calculation of the revised tax due.
- Response Section – “What you need to do”
If you agree with the adjustment, you will want to pay the amount due immediately to avoid additional interest and/or penalties. Use the bottom portion of the first page as your payment voucher. If you disagree with the adjustment, it is suggested you call the IRS using the phone number on the first page of the notice to discuss your account details. See below for additional details.
- Explanation Section – “Changes to Your [Year] Tax Return”
This section is where the IRS will explain the changes they have made. Below the explanation, you will see a more detailed recalculation which is a comparison of the figures on your original return versus the IRS figures after the corrections.
Steps for reconciling the return to the notice:
- First, you will want to verify that the figures under the “Your Calculations” column, which is generally located on the last page of the CP11, match the figures on your copy of the originally filed tax return.
- Next, go to the “Changes to Your [Year] Tax Return” section. Review the adjustment reason(s) listed to determine the section of the return affected by the changes. Review this in conjunction with the revised figures under the “IRS Calculations” column.
- Once you have identified the area of the return being changed, sign back in to the applicable year’s TaxAct® Online return (or open the applicable year’s TaxAct Desktop return). Navigate to the specific section(s) of the Federal Q&A to review your entries for the item(s) in question.
- Navigation to the most common forms are listed below for your convenience:
Ø Form 1099-R
Ø Form W-2
Ø Form 1099-MISC
Ø Form 1099-INT and Form 1099-DIV
Ø Form 1099-B
Ø Form 1099-G
- In order to reconcile the return with the proposed changes outlined on the notice, you will need to correct your entries by adding or modifying the information. If you have not done so already, please be sure to print a copy of your originally filed tax return before making any changes. If you’re not sure where the problem lies or exactly what changes are being made, contact the IRS using the phone number provided on the first page for further clarification.
- The return should now reconcile to the column “IRS Calculations” under the “Changes to Your [Year] Tax Return” section.
- Note: Generally, when an IRS notice is received, the IRS prefers you do NOT file an amended return. Depending on your response (agree, disagree, or partially disagree), the IRS will update their records accordingly. You simply need to print a revised return for your own records.
- Print a copy of the revised return:
Ø Printing Your Return – TaxAct Online
Ø Printing Your Return and Individual Forms – TaxAct Desktop
- You can now respond to the IRS notice.
- AGREE: If you agree with the proposed changes, update your tax records (see Step #4) and send the IRS your payment along with the voucher (bottom portion of first page).
Note: If you are unable to pay the full balance due, you can make a partial payment or you may request a payment arrangement to pay the amount you owe the IRS. If you wish to pay in installments, please visit the IRS website Payment Plans, Installment Agreements. You may be able to apply online, or you can send the required documents along with your response. The IRS will contact you later with payment information. If an installment agreement is approved, you will be charged a one-time fee.
- DISAGREE: If you disagree with the adjustment, call the IRS using the phone number provided on the first page to discuss your account details. You may also detach and mail the IRS a copy of the “Contact Information” (bottom portion of second page) along with a signed statement explaining why you do not agree.
This must be done within 60 days of the notice date. If not, you will lose your right to appeal the IRS’s decision. Be sure to attach documentation supporting your claim. Include your phone number (with the area code) and the best time of day to call. Be sure to write your SSN, the tax year, and form number (i.e. 1040, 1040A, or 1040EZ) on each page you’re attaching to the response form. Before mailing your response to the IRS, make a copy of the entire correspondence for your records. If possible, it is suggested you send the response through Certified Mail with Return Receipt requested. The IRS will then review the information and either reverse the proposed changes or forward your case for audit.
Sample CP 11: