Glossary

CP254 Notice

The CP254 notice is sent by the IRS to inform taxpayers that the agency has corrected an error on their account and has applied an overpayment credit to their balance. This notice provides details about the correction and how the credit will be used toward future tax obligations.

Key details in CP254:

It explains the nature of the error and how the IRS applied the overpayment to the taxpayer’s account.
The taxpayer may request that the credit be refunded or applied toward next year’s estimated taxes.
If the taxpayer believes the correction is incorrect, they can contact the IRS to dispute the adjustment.

Taxpayers receiving CP254 should review the notice carefully and decide whether they want the overpayment refunded or applied to future taxes.

Recommendation

CP523I Notice: Installment Agreement Default – Intent to Terminate and Levy Income

IRS CP523I Notice notifies taxpayers of a default in their installment agreement and warns of income levies if the account is not brought current.

CP210 Notice

IRS CP210 informs taxpayers that adjustments have been made to their account, which may result in a balance due, credit, or refund.

Tax Forgiveness for the Deceased

Tax forgiveness for the deceased may relieve some tax liabilities if a taxpayer dies with unpaid taxes, though the estate is generally responsible for the debt.

CP86 Notice: Missing Information on Tax Return

The IRS CP86 Notice alerts taxpayers that their tax return is missing essential information and outlines steps for correcting the issue.

CP518A Notice: Final Notice of Unfiled Individual Return

IRS CP518A Notice warns individuals of a missing tax return and outlines the consequences of not filing, including penalties and interest.

CP13 Notice: Refund Reduced or Adjusted

The IRS CP13 Notice informs taxpayers that their refund has been reduced due to corrections made to their return.

CP120 Notice

IRS CP120 notifies organizations that their tax-exempt status has been revoked due to failure to file annual returns or notices, and provides steps to reinstate it.

Estimated Tax Payments

Estimated tax payments are required for taxpayers who do not have taxes withheld from their income, such as self-employed individuals, to avoid penalties.

CP03 Notice: Tax Return Processing Status

The IRS CP03 Notice provides an update on the status of a taxpayer’s return, potentially requiring additional action.

CP504C Notice: Final Notice of Intent to Levy on Social Security Benefits

IRS CP504C Notice warns taxpayers that the IRS will begin levying a portion of their Social Security benefits unless they resolve their unpaid tax debt.