CP10 Notice: Changes to Your Tax Return

The CP10 Notice is issued by the IRS when it makes adjustments to a taxpayer’s tax return that could result in changes to the refund amount or an additional tax liability. These adjustments typically arise due to errors in reporting income, tax credits, or deductions. The IRS might also make changes if they find discrepancies between the taxpayer’s filed return and the information the IRS has on record (such as W-2 forms or 1099s).

Key features of the CP10 Notice:

• Explanation of Changes: The notice provides a breakdown of the changes made to the tax return. This could involve correcting the amount of income reported, adjusting deductions or credits (like the Earned Income Tax Credit), or recalculating tax owed.
• Impact on Refund or Tax Liability: Depending on the nature of the corrections, the taxpayer may receive a reduced or increased refund, or they may owe additional taxes. The CP10 will clearly state the new balance due or the adjusted refund amount.
• What to Do Next: Taxpayers should review the notice carefully. If they agree with the adjustments, no further action is required beyond paying any additional taxes owed by the deadline indicated. If the taxpayer disagrees with the corrections, they have the right to appeal or request a review, following the instructions in the notice.
• Timely Response: It is important to respond to the notice promptly if any action is required. Failure to pay any balance due by the deadline can result in additional penalties and interest.

Receiving a CP10 means the IRS found issues with the originally filed tax return, but it provides an opportunity to address and correct any discrepancies.