Glossary

CP13R Notice

The CP13R notice is sent by the IRS to notify taxpayers that changes have been made to their Recovery Rebate Credit on their return, resulting in a zero balance due. This notice is typically sent when the IRS finds a discrepancy in the Recovery Rebate Credit claimed and adjusts it accordingly.

Key points in CP13R:

The IRS provides details about the adjustment made to the Recovery Rebate Credit.
The notice confirms that there is no balance due as a result of the adjustment.
Taxpayers are encouraged to review the notice and verify the IRS’s changes, but no further action is required unless the taxpayer disputes the adjustment.

Receiving CP13R indicates that the IRS has resolved any issues with the Recovery Rebate Credit, and the taxpayer’s account is now in good standing.

Recommendation

Willful Neglect

Willful neglect refers to a taxpayer’s intentional disregard for tax laws, resulting in increased penalties and potential criminal prosecution.

Failure to File Penalty

The IRS Failure to File Penalty is imposed on taxpayers who fail to file their tax return by the due date, typically 5% of the unpaid tax for each month

529 Plan

A 529 plan is a tax-advantaged savings account designed to help families save for future education expenses, offering tax-free growth and withdrawals for qualified expenses.

CP13 Notice: Changes to Your Tax Return – Refund or Balance Due

The IRS CP13 Notice informs taxpayers of changes made to their tax return, potentially reducing their refund or resulting in a balance due.

CP66 Notice

The CP66 notice informs taxpayers that they are due a refund, but additional verification is needed to process it.

Letter 1615: Notice of Tax Lien Release

IRS Letter 1615 notifies taxpayers that the federal tax lien on their property has been released following the full payment or resolution of their tax debt.

Withholding Allowances

Withholding allowances are claimed on Form W-4 and determine the amount of federal income tax withheld from an employee’s paycheck.

Letter 2057: Non-Filer Notice

IRS Letter 2057 notifies taxpayers that they have failed to file a required tax return and provides instructions on how to file to avoid penalties.

CP503D Notice: Demand for Immediate Payment of Business Tax Debt

IRS CP503D Notice requires immediate payment of unpaid business taxes, warning of enforcement actions for non-payment.

1099 Form

A 1099 form reports various types of income earned from non-wage sources, such as freelance work, investment income, or self-employment.