Glossary

CP75 Notice

The CP75 notice is sent by the IRS when they need additional documentation to verify the Earned Income Credit (EIC) or other credits claimed on a taxpayer’s return. This notice places the refund on hold until the IRS receives and reviews the requested documents.

Key details in CP75:

The notice outlines the specific documents required to verify the credit claims, such as proof of income, residency, or dependency.
Taxpayers must submit the documents by the specified deadline to avoid delays in processing their refund.
Failure to respond to the CP75 notice may result in the IRS disallowing the credits claimed, leading to a reduced refund or a balance owed.

Taxpayers receiving a CP75 notice should provide the requested documentation as soon as possible to resolve the issue and receive their refund.

Recommendation

IRS Notice CP523: Defaulted Installment Agreement

IRS Notice CP523 is sent when a taxpayer defaults on their Installment Agreement by missing payments or failing to comply with the terms.

Back Taxes

Back taxes are unpaid taxes from previous years, and failure to pay them can result in penalties, interest, and collection actions by the IRS.

Delinquent Return

A delinquent tax return is a return that was not filed on time, which may result in penalties, interest, and enforcement actions by the IRS.

CP88 Notice: Refund Frozen Due to Unfiled Returns

The IRS CP88 Notice notifies taxpayers that their refund has been frozen due to unfiled tax returns from previous years, and provides instructions for resolution.

Underpayment Penalty

The IRS underpayment penalty is imposed when taxpayers fail to pay enough estimated taxes or withholdings during the year, leading to fines and interest.

CP518 Notice: Final Notice of Unfiled Return

IRS CP518 Notice serves as a last reminder for taxpayers to file an unfiled return, with penalties and enforcement actions detailed for non-compliance.

Federal Unemployment Tax Act (FUTA)

The Federal Unemployment Tax Act (FUTA) imposes a tax on employers to fund unemployment compensation programs.

CP13 Notice

The CP13 notice is sent to inform taxpayers that their tax return has been adjusted, which may result in an overpayment or an adjusted balance.

Nonrefundable Tax Credit

A nonrefundable tax credit can reduce a taxpayer’s liability to zero but cannot generate a refund if the credit exceeds the amount of taxes owed.

Letter 3276: Offer in Compromise Partial Payment Request

IRS Letter 3276 requests a partial payment from taxpayers applying for an offer in compromise, demonstrating intent to resolve tax debt.