Glossary

CP58A Notice

The CP58A notice is sent by the IRS as a follow-up to previous communications regarding potential eligibility for the Earned Income Credit (EIC). This notice provides additional information or reminders to help taxpayers claim the credit if they qualify.

Key points about CP58A:

The notice reiterates the potential benefits of the EIC and encourages taxpayers to verify their eligibility.
It may provide updated instructions or clarify previous information related to claiming the credit.
Taxpayers are encouraged to review their income and dependency qualifications to ensure they maximize their refund.

Receiving CP58A serves as an important reminder for taxpayers to take action regarding the Earned Income Credit.

Recommendation

Letter 86C: Refusal to Process Offer in Compromise

IRS Letter 86C notifies taxpayers that the IRS has refused to process their offer in compromise, explaining the reasons for the refusal and next steps.

CP77 Notice

The CP77 notice is sent to notify taxpayers that their refund is being withheld due to unpaid tax debts or other financial obligations.

Collection Appeal Program (CAP)

The IRS Collection Appeal Program (CAP) allows taxpayers to appeal IRS collection actions, such as levies and liens, before or after they are enforced.

Unfiled Tax Returns

Unfiled tax returns occur when a taxpayer fails to submit their required tax return by the deadline, leading to penalties, interest, and IRS enforcement actions.

Reasonable Cause

Reasonable cause is a valid explanation, such as illness or natural disaster, that taxpayers can use to request IRS penalty abatement.

Amortization

Amortization is the process of gradually deducting the cost of an intangible asset over its useful life for tax purposes.

IRS Form 941: Employer’s Quarterly Federal Tax Return

IRS Form 941 is filed quarterly by employers to report wages, tax withholdings, and payments for Social Security and Medicare taxes.

Federal Tax Deposit (FTD)

A Federal Tax Deposit (FTD) is a payment made to the IRS by employers to cover payroll taxes, including income tax withholdings, Social Security, and Medicare taxes.

CP25 Notice: Refund Adjustment Due to Estimated Tax Payments

The IRS CP25 Notice informs taxpayers that their refund has been adjusted due to incorrect estimated tax payments.

CP05A Notice: Information Verification Needed

The IRS CP05A Notice requests additional information from taxpayers to verify entries on their tax return before the refund can be issued.