CP518 Notice: Final Notice of Unfiled Return

The CP518 Notice is a final reminder issued by the IRS for an unfiled tax return. This notice follows previous reminders, such as the CP515, and is sent to taxpayers who have not responded or filed the required return. The CP518 signals that the IRS may take further action, including filing a substitute return or pursuing penalties, if the taxpayer does not comply.

Key aspects of IRS CP518 Notice include:

1. Explanation of Filing Requirement
   The CP518 specifies the tax year and type of return the IRS requires, reinforcing the importance of filing to avoid additional consequences. Taxpayers are reminded of their obligation to file, even if they are unable to pay the full amount of taxes due.
2. Potential Consequences of Non-Compliance
   Failure to respond to the CP518 Notice can lead to several consequences, including:
   • Substitute return preparation: The IRS may file a substitute return on the taxpayer’s behalf, which may not include all deductions or credits available.
   • Penalties and interest: Additional penalties may be applied, increasing the taxpayer’s liability.
   • Collection actions: If the taxpayer owes taxes, the IRS may pursue liens or levies to recover the debt after assessing the substitute return.
3. Instructions for Filing the Return
   The CP518 provides guidance on how to file the required return, including deadlines for submitting the return and any required supporting documentation. Taxpayers may choose to e-file or mail their return, following the instructions provided.
4. Options for Dispute
   If the taxpayer believes the IRS has made an error in requesting the return, they may contact the IRS to dispute the requirement. Documentation proving that the return was already filed or that filing is unnecessary may be required.
5. Importance to Tax Debt Resolution
   The CP518 Notice represents the taxpayer’s last opportunity to file the missing return voluntarily before the IRS takes enforcement action. Filing the return can prevent further penalties and help resolve potential tax debt. For taxpayers with unpaid balances, addressing this notice promptly helps them avoid escalating their debt through interest and penalties.

The CP518 Notice is a critical step in tax compliance, signaling that further inaction may lead to enforced measures by the IRS.