AUGUST 18, 2022

What Does CP Stand For in IRS Notices?

CP stands for “computer paragraph” in IRS notices.  In Internal Revenue Manual §, the IRS states:

“CP – Computer Paragraph – Refers to computer-generated internal and external notices.”

So if you receive a CP notice such as a CP14 or a CP501, this means that your notice was not written by hand by an IRS employee but generated by a computer at the IRS because certain actions or balances triggered the generation and sending of the notice you received.

How Many CP Notices Are There?

There are dozens of CP notices, ranging from informational notices such as the CP09, which simply informs the recipient that they may be eligible for the Earned Income Credit, to severe notices like the CP504, which urges the recipient to pay the amount indicated in the notice immediately or else the IRS may start taking their money forcibly to pay off their balance.

The table below indicates some of the most common CP notices.

Notice NumberWhat It Is
CP14Notice of Tax Due and Demand for Payment
CP501Reminder Balance Due Notice
CP503Important Balance Due Notice
CP504Urgent Final Balance Due Notice

What to Do If You Receive a CP Notice

Here are step-by-step instructions on what you should do if you receive a CP notice from the IRS.

Step 1: Read the CP notice itself.

The most important thing to do with any notice — CP or otherwise — that you receive from the IRS is to read and understand it.

Your CP notice may not be as scary as you think it is — it may simply be the IRS informing you that you may qualify for some tax credit you didn’t claim on your tax return.

But even if your CP notice does have some teeth — like the CP504 mentioned previously — you have options.

Step 2: Contest any errors in the notice.

If you believe the IRS made mistakes in your CP notice, contest it with them.

There should be a phone number within the CP notice itself that you can call to discuss your disagreements with the IRS.

Step 3: Take any recommended action, if eligible.

If the IRS is saying in your CP notice that you may be eligible for certain tax benefits, research these benefits and claim them if you are eligible.

Step 4: Determine how to best address your tax liability.

If your CP notice is informing you that you have a balance due on your account, figure out how you’re going to deal with this balance before the IRS starts taking forced collection activity.

The options available to most taxpayers include:

For more information about all of these options, check out our article How to Fight the IRS and Win.

And of course, if you would like us to take a look at your CP notice and determine the best course of action for you, give us a call at 866-8000-TAX.