CP75 Notice

Why Did I Get a CP75 Notice?

Receiving a letter from the IRS can be unsettling, but don’t panic if you’ve received a CP75 notice. It’s not necessarily an indication that you’ve done anything wrong. It’s simply the IRS’s way of ensuring that the information on your tax return is accurate and that you are eligible for the tax benefits you claimed. Basically, they need some more details from you.

The IRS uses a variety of computer programs and algorithms to scan millions of tax returns every year. These systems look for patterns, and sometimes a tax return will raise a flag. When this happens, the IRS might send you a CP75 notice to investigate further. It’s like a follow-up request for more details.

Common reasons you might receive a CP75 notice include:

• Claiming certain tax credits: Some tax credits, like the Earned Income Tax Credit (EITC) or the Child Tax Credit, have specific eligibility requirements. The IRS might send a CP75 notice to verify that you meet these requirements.
• Unusual or high deductions: If your claimed deductions are significantly higher than average for your income bracket, the IRS might request further verification.
• Inconsistencies: If the information on your tax return doesn’t match the information the IRS has on file, they may send a CP75 notice to investigate the discrepancy. This could be related to things like W-2 information, 1099 forms, or business income.
• Changes in your filing status: If you recently changed your filing status, the IRS may send a CP75 to confirm your new status and dependent information.

What Information Does the IRS Need?

A CP75 notice will clearly state what information the IRS needs to verify your tax return. It’s crucial to read the notice carefully, as the required documents and information can vary depending on the reason the notice was issued.

Here are common types of information the IRS may request:

• Proof of income: This could be copies of your W-2 forms, 1099 forms, or other documents that verify your income. If you have business income, you may need to provide records of your business receipts and expenses.
• Proof of expenses: If you claimed deductions, you may need to provide documentation that supports those deductions. This might include receipts, cancelled checks, or other proof of payment. For example, if you deducted business expenses, you will need proof of these expenses.
• Proof of dependents: If you claimed dependents, you may need to provide documents to prove their relationship to you and that they meet the dependency tests. These documents could include birth certificates, school records, or medical records.
• Proof of qualifying for certain tax credits: To confirm your eligibility for tax credits, the IRS may require certain documents, such as proof of a child’s age for the Child Tax Credit, or proof of low income for the EITC.
• Other supporting documents: The IRS may also request other specific documents based on your unique situation.

The most important thing is to read the CP75 notice carefully so that you understand exactly what information is required.

How to Respond to a CP75 Notice

It’s important to respond to a CP75 notice as soon as possible. Ignoring the notice will not make it go away and could cause delays in your refund, or even lead to penalties and interest. Here’s a step-by-step guide for responding effectively:

1. Read the Notice Carefully: Understand exactly what information the IRS is requesting. Don’t skip this step! Read it multiple times. Highlight key information. Make sure you understand what is needed.

2. Gather the Required Documents: Collect all the necessary documents and information. This may take some time, so don’t delay. The sooner you start collecting, the sooner you can respond. Make copies of everything, and keep the original documents for yourself.

3. Respond in the Method Requested: The CP75 notice will provide instructions on how to respond, such as by mail or online. Follow the instructions carefully. Generally, it is best to respond via mail, that way you can have proof you sent the documents, as well as a record. Be sure to keep records of your response, including copies of the documents you send.

4. Submit a Clear and Organized Response: Make sure your response is clear and easy to understand. Organize your documents and information in a logical way. If you’re mailing your response, include a cover letter summarizing what you’re sending and referencing the notice number.

5. Keep a Record of Your Response: Before you mail your documents, make sure you make copies for yourself! You want to have a record for yourself. Keep the original documents. It is best to send the response through certified mail, so that you know the IRS receives it.

6. Be Patient: After you send your response, it may take the IRS some time to review it. They usually state it can take up to 60 days to review. The exact time can vary, but be patient.

Common Mistakes and How to Avoid Them

• Ignoring the Notice: The biggest mistake you can make is ignoring the CP75 notice. Failing to respond can lead to a delay in your tax refund, or additional penalties or interest. Don’t ignore it! Deal with it right away!
• Sending Incomplete Information: The IRS is specific about the information it needs. Sending incomplete information can cause further delays. Be sure that you gather everything that is required. If you are missing something, and you are able, go and get it!
• Missing Deadlines: There is usually a deadline to respond, and missing this date can also lead to delays and penalties. If you need more time, it’s a good idea to request an extension.
• Not Keeping Records: It’s important to keep a copy of everything you send to the IRS. This is proof that you responded, and that you sent everything you were asked to send. If there’s ever an issue, you will have everything you need to fix it.
• Assuming It’s an Audit: A CP75 notice isn’t an audit, but it’s still important to respond promptly and accurately.
• Overreacting: It’s completely normal to feel stressed when receiving an IRS letter, but try not to overreact. This is just an information gathering process. Respond to the request as soon as you can.
• Assuming You Did Something Wrong: Sometimes a CP75 notice is just a routine check, and isn’t indicative of an error on your return. Don’t assume you did something wrong. Simply provide the information requested and move on.

When to Seek Professional Help

While you can usually respond to a CP75 notice on your own, there are certain situations where it might be a good idea to seek help from a tax professional.

Consider consulting a tax professional if:

• You are unsure what information the IRS is requesting.
• You don’t have the requested documents or know how to obtain them.
• You have complex tax issues.
• You are facing potential tax penalties or interest.
• You are simply overwhelmed by the process.
• You don’t feel comfortable handling the issue yourself.

A tax professional can provide guidance and help you navigate the process of responding to the CP75 notice.

The Importance of Accuracy and Honesty

The CP75 notice is a reminder of the importance of filing accurate and honest tax returns. Make sure that you have all the required documentation when filing. Taking care in preparing your tax return can reduce the chance of receiving any kind of notice from the IRS.

Remember, it’s always best to be proactive and thorough when preparing your taxes. Even if you do receive a notice, a quick and accurate response is crucial.

In Conclusion: A CP75 notice isn’t something to panic about. It’s simply a request for more information. By understanding why you received the notice, gathering the required documents, responding promptly and accurately, and avoiding common mistakes, you can resolve the issue and get your tax return processed as quickly as possible.