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Issue 68069

CP25 Notice, Estimated Tax Credits Discrepancy - We Changed Your Return to Match Your Credits or Payments Posted to Your Account - Even Balance

Issue Statement:

Letters and Notices are tax account related, public-use correspondence created because of an account related activity or condition. Determine if Notice CP 25 – Amount Due, clearly communicates appropriate guidance to the public.

Goal Statement:

The goal of this project is to review and make recommendations to the IRS that will enhance customer service and improve the taxpayers’ experience. Letters and Notices are sometimes hard to understand and make it difficult for taxpayers to comply with tax law.

RECOMMENDATION 3196

RECOMMENDATION TEXT:

We changed your XXXX form XXXX to match our record of your estimated tax payments, credits applied from another tax year, and/or payments received with an extension to file. As a result, we adjusted your estimated tax total. We adjusted your estimated tax total. We changed your XXXX Form XXXX to match IRS our records of your estimated tax payments, credits applied from another year, and/or payments received with an extension to file. State up front the tax return has been adjusted then give the reason why. Current text is confusing and can be more straightforward.

IRS Action: Considered

Redesign efforts are currently ongoing and language changes are being revised on opening sentences.

RECOMMENDATION 3197

RECOMMENDATION TEXT:

There is an Amount due table at the beginning of the letter, then separate tables for tax calculations/payments and credits Condense these down to one table that shows side-by-side comparison of Your calculations and IRS our calculations. Then provide a table showing the estimated payments on file. Why does this table stop with Your Calculations on the Total Tax line? There should be side-by-side comparison for taxpayer and IRS calculations all the way down to the refund/amount due line. And it should not be split into multiple tables. This is very confusing in current form, especially given the tables are separated by page breaks.

IRS Action: Not adopted

System and notice programming limitations prevent any updates to add “Your calculations” to the “Your payments and credits” section.

RECOMMENDATION 3198

RECOMMENDATION TEXT:

If you don’t agree with the changes, we made… There is no time frame given that the taxpayer must respond by. Provide the window of time that the taxpayer must respond. The return has already been adjusted but inform the taxpayer of the time frame they must take action.

IRS Action: Not adopted

The CP 25 is an Even Balance notice that notifies the taxpayer of a discrepancy between estimated tax credits claimed on return and credits posted to the account, resulting in an overpayment of less than $1.00, or a balance due of less than $5.00.

This notice also informs taxpayer that no refund is issued for less than $1.00 unless taxpayer requests it in writing, and no payment is necessary of a balance due less than $5.00.

The CP 25 does not require taxpayers to respond.

RECOMMENDATION 3199

RECOMMENDATION TEXT:

For online assistance, visit irs.gov/help If you can’t find what you need online, call the IRS at 123-456-6789 Update to more relevant web links Irs.gov/help should not be on letters. Provide the taxpayer a more relevant link to their tax situation.

IRS Action: Adopted

The redesign notice effort has already identified and is removing the reference to IRS.gov/help.

RECOMMENDATION 3200

RECOMMENDATION TEXT:

TAXPAYER ONLINE ACCOUNT – Taxpayers can create and access taxpayer online accounts. Please go to irs.gov, select “Sign into your Online Account” to get started; or Scan the QR Code found within this Notice. Please add this text to alert taxpayers that they have the option to create their online account. This will help taxpayers remain or become compliant, increase efficiency, reduce frustration. The IRS will also receive less phone calls, less paper, less frustrated taxpayers.

IRS Action: Adopted

Adopt