An IRS CP23 notice means the IRS found a difference between the tax payments reported on your tax return and the payments in its records.
Usually, this happens because a payment amount was entered incorrectly, applied to the wrong tax year, or wasn’t matched to your account correctly. Because of that difference, the IRS adjusted your return and says you may have an updated balance due.
Why did the IRS change my tax return?
In most cases, the IRS changed your return because it couldn’t match the tax payments reported on your return with the payments in its records.
This can happen for a few different reasons, including:
An estimated tax payment amount was entered incorrectly on your return
A payment was applied to the wrong tax year
A prior-year refund credit didn’t match IRS records
A payment wasn’t processed or applied correctly
A joint payment was applied to the wrong taxpayer’s account
Even if you don’t normally make estimated tax payments, you can still receive this notice if an amount was accidentally entered on the estimated tax payment line of your return.
What changes did the IRS make?
Take a look at the “What We Changed on Your Return” section of your CP23 notice.
The notice will usually show the tax payments reported on your return, the payments the IRS applied to your account, any prior-year credits applied, and your updated balance due. It may also include penalties or interest charges.
What should I do if the notice looks correct?
If everything looks accurate, you should pay the balance due by the deadline listed on the notice to help limit additional penalties and interest.
If you can’t pay the full amount right now, you may be able to set up a payment plan with the IRS.
You should also update the copy of your tax return that you keep for your records, but you generally don’t need to mail anything back to the IRS unless the notice specifically tells you to.
You can also review your balance, payment history, and payment plan options through your IRS Online Account.
What should I do if I don’t think the notice is accurate?
If you think the IRS made a mistake, call the phone number listed on your CP23 notice before the response deadline.
Before contacting the IRS, it helps to gather any records that support your position, such as:
Bank records
Cancelled checks
IRS Direct Pay confirmations
EFTPS payment records
A copy of your tax return
Proof of prior-year refund credits
If the IRS finds that a payment was missing or applied incorrectly, it may automatically adjust your balance, penalties, and interest.
Will I owe penalties or interest?
Maybe.
If you don’t pay the balance by the due date on the notice, the IRS will usually continue charging penalties and interest until the balance is paid off.
If the IRS later reduces your tax or penalties, any related interest charges are generally adjusted automatically too.
What if I need to make another change to my tax return?
If you find another issue on your return that isn’t related to the CP23 notice, you may need to file an amended tax return.
How can I avoid a CP23 notice in the future?
To help avoid the same issue next year:
Double-check tax payment amounts before filing
Verify any prior-year refund credits applied to your return
Review IRS payment records before filing
Keep copies of payment confirmations
File electronically to help reduce entry mistakes
If you work with a tax preparer, make sure both you and your preparer update your records with any IRS corrections from this year.
This content is provided for informational purposes only and should not be construed as tax, legal, financial, accounting, or other advice. Rules and regulations vary by location and are subject to change, so please consult with an expert if you need advice specific to you.
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