The IRS this month will send millions of letters to taxpayers whom it believes underpaid the tax agency. It’s important to pay attention to this letter — called a CP14 — because ignoring it could lead to penalties, according to Jackson Hewitt chief tax information officer Mark Steber.
The IRS issues roughly 9 million of these letters annually, Steber said. This year, the letter is unusual given that agency has stopped sending many types of notices and letters due to the pandemic. The IRS in February announced it would halt sending more than 10 types of letters that cover issues such as failure to file a tax return to under-withholding taxes.
The IRS sends a CP14 if it calculates that a taxpayer has a balance of more than $5 on their account, which can be related to a number of issues, such as failing to report some income or failure to pay a balance in full. The CP14 will tell you how much you owe and request payment within 21 days, according to the Taxpayer Advocate Service, which notes that the letter is one of the most common notices sent to taxpayers.
“The CP14 is a balance of taxes due notice, and that is why they aren’t suspended,” Steber said. “It’s in the taxpayer’s interest to know that they owe money so that those penalties and interest don’t progress.”
The IRS is required to send CP14 notices within 60 days after the tax agency assesses a tax liability, which means people who filed their taxes leading up to the…
