If you've received a “CP14 Notice” from the Internal Revenue Service (IRS),  you might wonder what it means and, even more importantly, what you should do in response. In a nutshell, a CP14 Notice is something you should take seriously, but not something to panic over, either. 

Why CP14 Notices Are Sent

The IRS sends a taxpayer a CP14 Notice if the agency has concluded that the taxpayer hasn't paid the entire amount reported due on their tax return. Importantly, the underpayment is not related to a math error.

The IRS usually sends out a CP14 because the taxpayer either missed a payment or the IRS misapplied a payment that they did make. Sometimes, this may not be the taxpayer's fault. 

For example, the notices are automated, so the taxpayer may have already paid the taxes before the IRS has processed the payment. An issue with spouses' joint return can also result in a CP14. 

What the CP14 Notice Includes

A CP14 Notice will include the following:

·        The notice number (in other words, the document will say CP14 on its face)

·        The applicable tax year for the insufficient amount

·        The notice date

·        The taxpayer's Social Security Number

·        The IRS contact information (a phone number and address)

·        The amounts the taxpayer has already paid and the balance due

·        Information relating to any interest and penalties

·        The response section relating to the taxpayer's reply to the notice

·        A second notice about payment requirements if the taxpayer lives within a federally-recognized disaster area

What a CP14 Notice Really Means

The CP14 is the first notice the IRS sends out, allowing the taxpayer to clear the debt. 

While additional notices will be forthcoming, the faster a taxpayer acts to resolve the issue, the better they will be. For example, if a debt is owed, the IRS will continue to charge interest and penalties on top of the balance due, so the taxpayer will pay for their delay in responding. By contrast, if the taxpayer can work with the IRS, negotiating a payment plan, settlement, or other agreement to resolve the debt. 

On the flip side, if the IRS is in error, prompt action will give the taxpayer more time to refute the debt and allow the IRS to correct the record, giving the taxpayer peace of mind. 

If you received a CP14 or other notice from the IRS, don't wait. Contact a tax attorney as soon as possible. If you need help, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.