CP91 Notice

Understanding the IRS CP91 Notice

Receiving mail from the IRS can be a bit nerve-wracking, especially if you’re not expecting it. One such piece of mail you might receive is a CP91 notice. Let’s break down what this notice is, why you might get one, and what steps you should take if it lands in your mailbox. Think of this as your friendly guide to decoding that confusing IRS letter.

Why Did I Get a CP91 Notice?

Imagine you filed your taxes and claimed a certain credit or refund, like the Earned Income Tax Credit or a child tax credit. Perhaps, you even made a payment that the IRS didn’t recognize right away. Now, the IRS is reviewing your return and comes to a different conclusion about these items. The CP91 notice is their way of saying, “Hold on a minute, we’ve looked at your return and made some changes.”

Specifically, the IRS sends a CP91 notice when they’ve adjusted or disallowed some or all of a tax credit, refund, or payment you claimed. This is usually because of one or more of the following reasons:

• Eligibility Issues: The IRS may determine that you didn’t meet the specific eligibility requirements for the tax credit or refund you claimed. For example, your income may be too high, or you may not qualify as head of household.
• Documentation Problems: Sometimes, the IRS might not have all the necessary information to verify your claim. This might be due to missing forms or incorrect information provided on your return.
• Calculation Errors: The IRS may recalculate your taxes using their formulas and determine a different total than what you provided. This can happen in instances where there was an error with tax preparation.
• Discrepancies in Information: The information you provided may not match the data they already have. The IRS may cross-reference data with other forms and may need to follow up if things don’t match.

What Does a CP91 Notice Actually Look Like?

The CP91 notice isn’t just a generic form letter. It’s designed to tell you precisely what happened. Here are key details you should expect:

• Your Information: Make sure the notice has your correct name, address, and taxpayer identification number (like your Social Security number or Individual Taxpayer Identification Number).
• Date of Notice: This is important as it helps you keep track of deadlines.
• Explanation of Changes: The most important part of the notice! It will detail exactly which tax credit, refund, or payment was affected, and the reasoning behind the adjustment.
• Revised Tax Amount: You’ll see the new amount owed (or the reduced refund) and the previous amounts.
• Contact Information: The IRS provides contact information if you have questions or need clarification.
• Payment Instructions (If Applicable): The notice will guide you on how to pay if you now owe money.
• Appeal Rights: It will also explain your rights to appeal their decision, if you disagree with it.

How Should I Respond to a CP91 Notice?

Okay, you’ve received a CP91 notice. Now what? Don’t panic. Here’s a step-by-step guide:

1. Read Carefully: Take a deep breath and read through the entire notice. Pay close attention to the explanation of the changes. Make sure you understand why the IRS made the adjustments they did. This will help you determine the best course of action.
2. Verify the Information: Double-check all the numbers and calculations the IRS used. Compare it to your records and tax return. Sometimes, even the IRS makes mistakes, and verifying helps make sure you’re not paying too much.
3. Gather Supporting Documents: If you disagree with the IRS’s changes, you’ll need to provide supporting documentation. This might include pay stubs, receipts, tax forms, or any other paperwork that proves you were eligible for the credit or refund.
4. Contact the IRS: If you don’t understand the notice, or if you think it’s a mistake, contact the IRS immediately. The phone number is listed on your notice. Be polite and professional. When you call, make sure to have all of your information on hand.
5. Submit a Response: If you agree with the notice, you may just need to pay the additional tax amount. If you disagree with it, you may need to respond in writing. There’s a certain timeframe for this (usually within 60 days), so pay close attention to the dates given.
6. Make Payment (If Necessary): If you now owe money, it’s crucial to pay the outstanding balance as soon as possible to avoid accruing penalties and interest.
7. Keep Records: Retain a copy of the notice and your response for your records. This will be helpful in the future, should more issues arise.

What If I Don’t Agree with the CP91 Notice?

You have the right to challenge the IRS’s decision if you believe they made an error. Here’s what you need to do:

• Provide Evidence: Gather all relevant documentation to support your original claim.
• File an Appeal: Follow the instructions on the notice to formally appeal. This usually involves submitting a written response explaining your disagreement. Be sure to include your supporting documentation.
• Be Patient: The appeals process may take some time, so stay patient.

Common Mistakes to Avoid with a CP91 Notice

• Ignoring the Notice: Ignoring a notice won’t make it go away. In fact, it can lead to more penalties and interest.
• Failing to Respond: If you disagree with the IRS, failing to respond can mean you forfeit your right to appeal.
• Not Understanding the Notice: Rushing through it or not fully grasping the details can lead to incorrect actions.
• Missing Deadlines: Pay close attention to the deadlines mentioned on the notice. Missing deadlines can result in adverse consequences.
• Delaying Payment: If you owe the IRS money, delaying payment will result in penalties and interest accruing. Pay as soon as you can.

How to Avoid Getting a CP91 Notice in the First Place

Prevention is always better than cure, right? Here are a few tips to reduce your chances of receiving a CP91 notice:

• Accurate Tax Prep: Make sure you accurately fill out your tax return. Double-check your calculations and ensure you have all the documentation.
• Understand Tax Laws: Take the time to learn about tax laws and ensure you are eligible for any tax benefits you claim.
• Professional Help: Consider seeking help from a tax professional. They’ll make sure everything is correct and they can provide advice for unique situations.
• Keep Records Organized: Keep all your tax-related documents organized throughout the year, so you can easily find them when filing.
• File on Time: File your tax return by the deadline. This will reduce the chances of any discrepancies.

Related Tax Concepts

• IRS Notices: The CP91 notice is just one of many IRS notices.
• Tax Credits: Understanding tax credits will help you correctly claim them on your taxes.
• Tax Refunds: Understanding the process of tax refunds will help you know how to claim your money.
• Tax Payments: Understanding the IRS payment system will help you manage the money you may owe.
• Tax Penalties: Ignoring an IRS notice can lead to penalties.

Dealing with IRS notices can be challenging, but they don’t have to be a source of stress. Understanding what these notices mean and how to respond can save you both time and money. With the right approach, you can navigate the process and be on your way to a smoother tax journey.