IRS Notice Guide
IRS CP23 Notice — What It Means and What To Do
Receiving an IRS CP23 notice can feel overwhelming. This guide explains what the notice means, what the deadlines are, and what options exist for penalty relief.
Response Deadline
The IRS expects a response within 60 days to dispute. Acting before this deadline preserves all relief options and prevents escalation to the next collection stage.
What This Notice Means
The IRS found a difference between the estimated tax payments (Form 1040-ES) you claimed on your return and the payments they have posted to your account. This may result in a balance due or a different refund amount.
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Common Penalties on This Notice
Estimated Tax Penalty (IRC 6654)
Failure to Pay (FTP)
Interest
First Time Abate (FTA) May Apply
Penalties on CP23 notices are often eligible for First Time Abate relief under IRM 20.1.1.3.6.1. Taxpayers with a clean 3-year compliance history may qualify for full penalty removal.
The FTP penalty may qualify for First Time Abate. The estimated tax penalty under IRC 6654 is generally not eligible for FTA but may be waived in certain hardship situations.
What To Do After Receiving a CP23 Notice
Compare the payments listed on the notice to your bank records or cancelled checks
Verify that all estimated payments were applied to the correct tax year and SSN
If payments are missing, send proof of payment (bank statements, confirmation numbers)
If you agree with the adjustment, pay any balance due
Respond within 60 days if you disagree with the changes
The IRS offers penalty relief programs that most taxpayers don't know about. Upload your notice to see which ones apply to your situation.
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“The discrepancy was only about $200 — turned out I miscounted one quarter on my return. Paid the difference and moved on.”
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Frequently Asked Questions
Why are my estimated payments not showing up?
Payments may be applied to the wrong tax year, SSN, or tax period. This commonly happens with paper checks or when payment information is entered incorrectly.
How do I prove I made the estimated payments?
Provide copies of cancelled checks, bank statements showing the withdrawals, IRS Direct Pay confirmations, or EFTPS payment confirmations.
What is the estimated tax penalty on a CP23?
The estimated tax penalty under IRC 6654 is calculated based on the underpayment amount and the federal short-term rate plus 3 percentage points, applied for the period of underpayment.
Have a CP23 notice? Check your penalty eligibility.
Can the estimated tax penalty be waived?
In limited circumstances. Waivers are available if the underpayment was due to a casualty, disaster, or other unusual circumstance, or if the taxpayer retired (after age 62) or became disabled during the tax year.
What if I overpaid my estimated taxes?
If the IRS posts more estimated payments than you claimed, you may receive a larger refund. A CP24 notice covers that scenario.
Should I call the IRS or respond in writing?
Either method works. Written responses with copies of payment proof are recommended for record-keeping purposes.
IRS penalties add up fast
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