The IRS Notice CP12E/CP12F is sent to inform taxpayers that they corrected a miscalculation on their tax return. This type of return mainly covers the accuracy of tax returns that United States taxpayers may have filed for a specific tax year. In most cases, it is usually that taxpayers made an overpayment on their tax return.

REASONS WHY TAXPAYERS RECEIVE A CP12E NOTICE FROM THE IRS

If you have received a CP12E Notice from the IRS, it usually means the following:

• The IRS believes that there were one or more miscalculations on your tax return.
• The IRS has made changes to your return as a result of the miscalculation(s).
• You have an overpayment when you thought you owed money or had an even balance. The amount of tax you overpaid is different than what is reflected on the tax return you filed. The overpayment means that either your refund will be larger than you anticipated, or that the amount you asked be applied to the current year’s taxes will be more than you expected. This could affect any Income Tax Audits and Appeals that you are involved in, as well as IRS Tax Litigations or Tax Collections actions.

STEPS TO TAKE AFTER RECEIVING NOTICE CP12E / CP12F

• Whenever you receive the IRS Notice CP12E / CP12F, the first thing you should do is to read the CP12E Notice carefully, especially. Read the part that explains why the IRS believes there was a miscalculation on your tax return and the changes that the IRS has made to your return. Also take note of the part where the IRS suggests the next steps you need to take to resolve the issue.
• If you agree with the IRS’s explanation and the corrections it has made to your tax return, you need to make these corrections on the copy of your tax return that you kept, and if you requested that taxes you overpaid for the previous year be applied to your tax obligations for the current year, make any necessary adjustments to your tax withholding or estimated tax payments in order to avoid significantly overpaying your taxes for the current year
• If you do NOT agree with the IRS’s explanation and/or the corrections it has made to your tax return, contact a tax expert to discuss the best strategy for resolving the matter with the IRS. Be sure to contact a tax law professional right away, because the IRS must generally be advised in writing about a discrepancy within 60 days of the date on the CP12E Notice you received. If the discrepancy is not addressed properly, your tax return could be referred for audit.

If you write to the IRS within 60 days of the date of this notice, providing them with the information they need to reverse the changes, they may be able to reverse the change they made to your account. However, if you’re unable to provide them with additional information that justifies the reversal and they believe the reversal is in error, they will forward your case to examination for audit. This step gives you formal appeal rights, including the right to appeal our decision in court. After they forward your case, the audit staff will contact you within 5-6 weeks to fully explain the audit process and your rights. If you don’t contact us within the 60-day period, you’ll lose your right to appeal the decision of the IRS before payment of tax.

On the CP12E notice sent to you, you will find a number you can use to contact the IRS directly and speak to one of its agents. The agent will give you your options, which may include requesting a refund check or simply applying the amount to next year’s tax debt. Some taxpayers choose to get a refund check while some choose to apply the amount to next year’s debt because they intentionally made an overpayment in the first place. Apart from the IRS discovering an overpayment, there are other ways an overpayment on your tax return can be discovered.

You can find overpayments by Identifying missing deductions. The third tax return scenario that could lead to the realization of a tax overpayment is when a taxpayer begins using a tax preparation service or software program that identifies all the deductions and credits that he is eligible for. Once taxpayers see these deductions, they may realize that they failed to claim them in recent years. As a result, they may have overpaid their taxes during these periods.

You can also find an overpayment when filing a tax return. Most people recognize a tax overpayment when completing their annual tax returns. The realization may come when he or she realizes that the refund is remarkably high, which may suggest that the amount of tax that he or she has been paying throughout the year is excessive.

Paying too much tax might be the result of failure to adjust withholding on an employee’s W-4 form or a self-employed taxpayer who miscalculates estimated tax payments. In the first case, talking to payroll to ensure that withholding has been set correctly (such as reflecting a change in the number of children in a family or the employee’s marital status) should resolve the issue. In the case of estimated tax payments, a self-employed person may benefit from speaking with an accountant or other financial professional about their finances. It may be that the self-employed person is making an error when completing estimated forms and overpaying as a result.

If you identify the overpayment on your own, you should file an amended tax return for the year or years in which you overpaid. If the IRS agrees with your assessment, you’ll receive your refund within 4-6 weeks.

NOTICE DEADLINE – 60 days. If you miss the deadline without addressing the issue, your tax return will be referred for audit. The change will not be reversed and you will pay the additional tax. If the IRS doesn’t hear from you within the time frame given to you, they will assume you agree with the information on the notice.