Glossary

CP3219A Notice

The CP3219A notice is also known as a statutory notice of deficiency, and it informs taxpayers that the IRS has determined they owe additional taxes. This notice gives the taxpayer the opportunity to challenge the IRS’s findings in U.S. Tax Court.

Key points in CP3219A:

The notice provides a breakdown of the deficiency, including the amount of taxes owed, along with any penalties and interest.
The taxpayer has 90 days to file a petition with the Tax Court to dispute the IRS’s findings.
If no action is taken, the IRS will assess the additional tax and begin collection efforts.

Taxpayers receiving CP3219A should carefully review the notice and consult with a tax professional if they wish to challenge the deficiency in court.

Recommendation

Federal Insurance Contributions Act (FICA)

FICA is a law requiring payroll taxes for Social Security and Medicare, with contributions shared by employers and employees.

Accuracy-Related Penalty

The accuracy-related penalty is imposed when a taxpayer underpays taxes due to negligence or substantial understatement of income.

CP71A Notice

IRS CP71A is an annual reminder that a taxpayer has an unpaid balance, detailing the total amount owed, including penalties and interest.

CP58 Notice

The CP58 notice notifies taxpayers that they may be eligible for the Earned Income Credit (EIC) based on their tax return information.

Backup Withholding

Backup withholding is a tax withholding requirement that applies to certain types of income, such as interest or dividends, to ensure taxes are paid.

Tax Transcript Request

A tax transcript request is a formal request made to the IRS to obtain a summary of a taxpayer’s return or account, often used for income verification or loan applications.

Refundable Tax Credit

A refundable tax credit can reduce a taxpayer’s liability to zero and generate a refund for any amount of the credit that exceeds the taxes owed.

CP71 Notice

IRS CP71 is an annual reminder that a taxpayer has an unpaid balance on their account, including a breakdown of taxes, penalties, and interest owed.

CP18 Notice: Discrepancies in Claimed Credits

The IRS CP18 Notice informs taxpayers of discrepancies in claimed credits and details any adjustments made to the return.

Amended Tax Return

An amended tax return is filed to correct errors or omissions on a previously submitted tax return, using IRS Form 1040-X.