Tax Guide

How the IRS Contacts You if There Is an Error on Your Tax Return

How the IRS Contacts You if There Is an Error on Your Tax Return
Ines Zemelman, EA
26 February 2021

IRS will send a series of letters starting with CP14

If the IRS determines, rightly or wrongly, that your tax return has an error, it will send you a series of letters describing the problem and letting you know what to do.  Only the first of these, called a CP14, shows the difference between their calculation and yours.  The following letters do not include this calculation.

Clients reporting receiving the fourth letter, without receiving the first three

An increasing number of clients have recently received only the fourth letter without receiving the first three.  This could be because international mail may get lost, or because the COVID crisis has strained the ability of the IRS to follow proper procedures. 

This fourth letter is called a CP504 - Intent to Levy State Tax Refund or Other Property and can make the recipient very nervous.  However, this situation can be fixed.  Be aware that the only thing that can be levied at this time is any state tax refund that a taxpayer may have.  Most expatriates do not expect state tax refunds.  Also, the IRS understands that their letters may arrive very late to expatriates.

How to proceed

You should first call the IRS at 267-941-1000 to let them know that you did not receive the earlier letters and that you need to know why they are charging you this money.  Then you should notify Taxes for Expats that you received this letter so that we can help. If we prepared the original tax return, we can give you advice on what needs to be done next.  Keep in mind that the IRS has been known to be wrong on occasion.

If you like, we can speak to the IRS directly via Representation services. However, this service costs $200 per hour with a two-hour minimum because we would need a Power of Attorney to act on your behalf.

Ines Zemelman, EA
founder of Taxes for Expats