What Does CP Stand For in IRS Notices?
CP stands for “computer paragraph” in IRS notices. In Internal Revenue Manual § 20.1.3.1.5, 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 Number | What It Is |
|---|---|
| CP14 | Notice of Tax Due and Demand for Payment |
| CP21A | Data Processing Adjustment Notice — Balance Due |
| CP21B | Data Processing Adjustment Notice — Refund Owed |
| CP21C | Data Processing Adjustment Notice — Account Now Minimal |
| CP22A | Data Processing Adjustment Notice — Balance Due |
| CP22E | Notice of Examination Adjustments for Year Without a Previous Balance |
| CP40 | Notice of Assignment of Delinquent Account to a Private Collection Agency |
| CP45 | Reduction in Credit Elect Amount |
| CP49 | Notice of Overpayment Adjustment |
| CP59 | First Notice for Nonfiler Return Delinquency |
| CP60 | Notice of Credit Reversal Adjustment Causing Balance Due of $5 or More |
| CP71A | Annual Reminder Notice for Tax Years in Status 53 (Currently Not Collectible) for More Than 65 Weeks |
| CP71C | Annual Reminder Notice for Tax Years in Status 24 With a Balance of $25 or More |
| CP71D | Annual Reminder Notice for Tax Years in Status 22 or Status 26 With a Balance of $25 or More |
| CP81 | Final Reminder Notice to File Return For Year With Credit Balance |
| CP90 | Notice of Intent to Seize Your Assets and Your Right to a Hearing |
| CP91 | Final Notice Before Levy on Social Security Benefits |
| CP92 | Notice of Seizure of Your State Tax Refund and Your Right to a Hearing |
| CP171 | Annual Reminder Notice for Business Balance Due |
| CP501 | Reminder Balance Due Notice |
| CP503 | Important Balance Due Notice |
| CP504 | Urgent Final Balance Due Notice |
| CP518 | Final Notice of Return Delinquency |
| CP523 | Installment Agreement Default Notice with Intent to Levy |
| CP2000 | Notice of Underreported Income |
| CP3219A | Automated Underreporter (AUR) Statutory Notice of Deficiency |
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:
- Paying their balance in full
- Negotiating an offer in compromise with the IRS
- Agreeing to an installment agreement with the IRS
- Seeking placement in a temporary hardship status with the IRS called currently not collectible status
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.
Author:
Logan Allec, CPA, Founder and Owner
Logan Allec has been serving taxpayers as a CPA for over 14 years. After leaving his role at a "Big 4" firm, he started Choice Tax Relief to help everyday Americans who have found themselves behind on their taxes. He also educates thousands of people daily about tax relief on his YouTube channel. In addition to his CPA license, Logan also has a Master's Degree in Taxation from the University of Southern California (USC). He lives with his wife and children in the Los Angeles area. Learn more about Logan here.
