IRS acknowledges some CP-14 notices are incorrect and should be disregarded
In an announcement issued on July 27th, the IRS acknowledged that some payments made for 2021 tax returns have not been correctly applied to joint taxpayer accounts, and these taxpayers are receiving erroneous balance due notices (CP-14 notices) or notices showing the incorrect amount.
Who is affected?
The agency says that those affected generally are married filing jointly returns where the second spouse listed on the return made payments through their IRS Online Accounts. In many cases, these payments did not post to their joint returns. The IRS acknowledges that other taxpayers may also be affected outside of this group.
What to do?
In short, the agency says taxpayers who paid any tax owed should ignore the CP-14s at this time. The IRS states that it is researching the matter and will provide an update as soon as possible.
Importantly, the agency states that any assessed penalties and interest will be automatically adjusted when the payment(s) are applied correctly.
If a taxpayer paid only part of the tax reported due on their 2021 joint return, the IRS advises paying the remaining balance or following instructions on the notice to enter into an installment agreement or request additional collection alternatives.
Why is this occurring?
The IRS states that when certain payments are processed, the payments don’t move to the married filing jointly account when the payment is:
- not electronic and is made by the secondary spouse.
- electronic, is made by the secondary spouse, and posts before the joint return indicator is present to identify the primary taxpayer.
- made by the secondary spouse using the Online Account (OLA) Make a Payment functionality.
What is a CP-14 Notice?
Notice of Tax Due and Demand for Payment, Notice CP14, Balance Due $5 or More, No Math Error, is the first and most common notice sent to taxpayers. The notice advises the taxpayer that there is a tax due, states the amount of tax, including interest and penalties, and requests payment within 21 days. If the taxpayer does not pay the amount due within 60 days, the IRS can proceed with collection activity, including the filing of a Notice of Federal Tax Lien.
In the cloud or on premise, find the solutions you need to supercharge your tax preparation productivity.
ArticleTax & AccountingMarch 22, 2023Required minimum distributions are coming due for many; Secure 2.0 Act changed the rules for someTax professionals should remind their affected clients that they should take their retirement plan account minimum distributions by April 1 to avoid the punitive excise tax.Learn More