The CP14A Notice is issued by the IRS when additional taxes are owed on a prior year’s return. This notice is typically sent after the IRS has completed a review or audit of the previous year’s tax filings and determined that the taxpayer underpaid their taxes. The CP14A serves as an official request for payment of the newly calculated balance.
Important aspects of the CP14A Notice include:
- Explanation of Additional Taxes: The notice will detail why additional taxes are owed, which may be due to unreported income, disallowed deductions, or other adjustments made by the IRS during the review process.
- Penalties and Interest: The CP14A will include any penalties or interest that have been added to the balance due. These charges will continue to accrue until the balance is paid in full.
- Payment Instructions: Taxpayers are given options for paying the additional taxes, including paying in full or setting up a payment plan. The notice will provide deadlines and explain the consequences of failing to pay by the due date.
- Dispute and Appeal Rights: If the taxpayer believes that the IRS made an error in calculating the additional taxes, they have the right to dispute the notice. The CP14A will outline the steps to take to request a review or submit supporting documentation.
Prompt payment or resolution of a CP14A Notice is critical to avoid further penalties and collection actions by the IRS.