CP88 Notice: Refund Frozen Due to Unfiled Returns

The CP88 Notice is issued by the IRS when they have frozen a taxpayer’s refund because the taxpayer has failed to file required tax returns from prior years. The IRS will hold the refund until all outstanding returns are filed and processed. This notice typically applies to taxpayers who are due a refund but have not complied with filing requirements for previous tax years.

Important elements of the CP88 Notice:

• Refund Frozen: The notice informs the taxpayer that their current-year refund will not be issued until the IRS receives the missing returns from previous years. The IRS has the legal authority to withhold refunds if taxpayers have unfiled returns.
• Filing Instructions: The notice will specify which prior-year returns are missing and will include instructions on how to file those returns. Taxpayers must submit the returns in question to release the hold on their refund.
• Consequences of Non-Filing: If the taxpayer does not file the missing returns, the IRS will continue to hold the refund, and penalties and interest may accrue on any balance owed from those prior years. The IRS may also take further enforcement actions, such as issuing a levy or lien.
• Next Steps: Once the taxpayer files the required returns, the IRS will process the returns and issue the refund. Taxpayers should ensure that all documentation is complete and accurate to avoid further delays.

The CP88 Notice serves as a critical reminder for taxpayers to comply with filing requirements in order to claim their refund and avoid further enforcement actions.