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IRS Notice CP10

Why did I receive a CP10 Notice from the IRS?

If you have received a CP10 Notice from the IRS, it usually means that the IRS believes there was a miscalculation on your tax return, and this miscalculation affects the amount of tax you asked the IRS to apply towards tax you owe for next year. The nature of the specific miscalculation that the IRS believes exists on your return could relate to a number of different line items on your return and will depend on your unique circumstances, but the bottom line is that the IRS contends that it affects the amount of tax you owe, and a downward adjustment in the amount of tax that you requested be applied towards tax you will owe next year. This could affect any Income Tax Audits & Appeals that you are involved in, as well as IRS Tax Litigation or Tax Collections actions.

Whenever you receive a CP10 Notice, you should:

  • Read the CP10 Notice carefully, especially: (1) the part that explains why the IRS believes there was miscalculation on your return and why it was unable to apply the amount you requested towards tax you will owe for next year; and (2) the part describing any additional steps you need to take in response.
  • If you agree with the IRS’s explanation and revised amounts: (1) correct the copy of your tax return that you kept for your records to reflect the amounts as revised by the IRS; and (2) adjust the amount of future estimated tax payments you make to avoid the possibility of not making sufficient estimated tax payments for next year’s taxes.
  • If you do NOT agree with the IRS’ explanation and revised amounts, contact a tax attorney like to confirm that an actual discrepancy exists and, if one does, to discuss how best to approach the IRS about it within applicable time limits (generally, you must advise the IRS of the discrepancy in writing within 60 days of the date on the CP10 Notice you received). Addressing the situation appropriately will significantly reduce the possibility of your case being referred for audit by the IRS.

Answers to Frequently Asked Questions:

Why is the IRS reviewing my return?

While most returns are accepted by the IRS as filed, a certain number of returns are selected for examination. The IRS examines some income tax returns to verify that the income, expenses, and credits reported on the return are accurate. The IRS selects tax returns for examination using various methods including random sampling, computerized screening, and comparing information the IRS has received that relates to the return, such as W-2 and 1099 forms. Just because your tax return was selected for examination does necessarily mean that the IRS believes you made an error or were dishonest on your return.

How do I adjust my estimated tax payments?

If you are an employee, you generally make estimated tax payments through the amount of federal income withheld pursuant to the Form W-4 on file with your employer. If you need to make an adjustment to the amount that is withheld from your pay, submit a new Form W-4 to your employer. If you are self-employed, you generally make estimated tax payments by submitting payment four times a year along with a completed Form 1040-ES. Consult IRS Publication 505, Tax Withholding and Estimated Tax, for a good overview discussion on how to calculate withholding and estimated tax.

The following images are an example of what an IRS Tax Notice CP10 actually looks like.

This sample notice is for example purposes only. The case facts and figures on your notice will vary according to the specifics of your case.

IRS Notice CP10 IRS Notice CP10 IRS Notice CP10

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