Glossary

CP01 Notice

The CP01 notice is sent by the IRS to provide taxpayers with their Identity Protection Personal Identification Number (IP PIN). This six-digit number is crucial for those who have been victims of identity theft or are at risk for it, as it helps ensure that only the taxpayer can file a return using their Social Security Number (SSN).

Key points about CP01:

The IP PIN is used to validate the taxpayer’s identity when filing their tax return.
Taxpayers must enter the IP PIN on their tax return to avoid delays or rejections.
The IRS typically issues a new IP PIN each year, and taxpayers should keep this number confidential.

Taxpayers should use their IP PIN when filing to prevent fraudulent tax returns from being submitted under their name, thereby protecting their tax information and refund.

Recommendation

Financial Hardship

Financial hardship occurs when a taxpayer cannot pay their tax debt without affecting basic living expenses, qualifying them for relief options like CNC status.

CP21 Notice

The CP21 notice notifies taxpayers that a change has been made to their tax account, which may affect their balance due or refund amount.

CP90 Notice – Final Notice of Intent to Levy and Notice of Your Right to a Hearing

IRS Notice CP90 is the Final Notice of Intent to Levy, which gives you the right to a hearing before the IRS seizes your assets to satisfy unpaid tax debt.

Unfiled Tax Returns Consequences

Unfiled tax returns can lead to IRS penalties, interest, and enforcement actions, including substitute returns, liens, and levies.

Letter 4903: Request for Employment Tax Payment

IRS Letter 4903 is sent to employers with unpaid employment tax, requesting prompt payment to avoid additional charges and potential enforcement actions.

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.

CP161 Notice: Balance Due on Business Taxes

The IRS CP161 Notice informs businesses of an outstanding balance due on their tax return and provides instructions for paying the amount owed.

Notice of Federal Tax Lien (NFTL)

The IRS files a Notice of Federal Tax Lien (NFTL) to claim legal rights over a taxpayer’s property until the unpaid tax debt is satisfied.

IRS Form 1040: U.S. Individual Income Tax Return

IRS Form 1040 is the standard tax form used by U.S. individuals to file their federal income tax returns, reporting income, deductions, and credits.

Innocent Spouse Relief

Innocent Spouse Relief protects a spouse from being held liable for taxes owed due to errors or omissions by the other spouse on a joint return.