CP12 Notice: Changes to Your Tax Return – Refund or Balance Due

The CP12 Notice is issued by the IRS to notify taxpayers that the IRS has made changes to their tax return because of a miscalculation. This notice can result in either a refund or a balance due, depending on the corrections made.

Key elements of the CP12 Notice:

• Reason for the Changes: The notice will detail the miscalculations found on the taxpayer’s return, such as incorrect amounts for deductions, credits, or reported income. The IRS adjusts the return accordingly.
• Refund or Balance Due: The notice explains whether the taxpayer is entitled to a refund or if they owe additional taxes after the IRS has corrected the return. If a refund is due, the notice will include the amount and payment timeline. If there is a balance due, the taxpayer will be required to pay by a specified deadline to avoid penalties and interest.
• Next Steps: Taxpayers can either accept the IRS’s changes or dispute them if they believe the original return was correct. The notice includes instructions on how to contest the changes and provide supporting documentation.
• Impact on Tax Account: The CP12 Notice may affect the taxpayer’s refund status or create a balance owed, so it is important to review the notice carefully and take any necessary actions.

The CP12 Notice is a critical IRS communication that notifies taxpayers of adjustments made to their return and the financial consequences of those changes.