irs cp11 changes to tax return and balance due

Taxpayer's Guide to Notice CP11 (Math Error on Return – Balance Due)

What This Notice Means and How to Respond If You Receive It

The IRS sends CP11 notice to alert you about miscalculations on your tax return. This notice also explains changes the IRS made to your return, and it details how much you owe due to the changes. Usually, the IRS only sends this notice if the changes made to your return changed your balance by at least $5. 

This guide explains why you received this notice and how to respond to it. 

Why Did You Receive Notice CP11?

You received IRS Notice CP11 because the IRS believes there was a miscalculation on your tax return. In other words, there was a math error on your tax return. Generally, this tends to happen with paper returns. 

If you use tax filing software, the software does the calculations, and math errors are virtually impossible. You may enter the wrong number with tax filing software, but the calculations will always be correct. If you received this notice after submitting a paper return, you might want to switch to e-filing in future years.

What Changes Did the IRS Make to My Tax Return?

The changes the IRS made will be detailed on your CP11 notice. Again, in most cases, this notice relates to calculation changes. Typically, the IRS uses other notices if the agency changes the information you report on your return. 

Often, the changes are explained on page four of IRS Notice CP11. There should be a section that says "Your tax calculations."This section will see a description of the element changed and where it appears on your tax return. 

For example, if the IRS made changes to your adjusted gross income, this section will say "adjusted gross income, line 11." Then, it will show your original entry followed by the IRS's new entry. Note that line numbers are subject to change yearly as the IRS updates tax forms. These are just examples based on the 2021 version of the individual income tax return.

The IRS may also make adjustments to your payments and credits. These also typically appear on page four of the notice. For instance, in this section, you may see "federal income tax withheld, line 25" or "estimated tax payments, line 26". These descriptors should be followed by the numbers the IRS used when it updated your return. 

If you want more clarification about the changes, you can contact the IRS directly. Or you can contact a tax professional and ask them for help. 

 

Notice CP11 and the Recovery Rebate Credit

In recent years, the IRS has commonly used this notice to alert people about the Recovery Rebate Credit mistakes. Available in tax years 2020 and 2021, this credit allowed people to claim stimulus payments on their tax returns if they didn't receive them before they filed. 

To calculate this credit, you needed to note information about the stimulus payments you received. If you put in the wrong information, the IRS will correct your numbers and send you this notice. 

Notice CP11 and the Advance Child Tax Credit

IRS Notice CP11 is also used to alert people about mistakes related to the advance child tax credit. In 2021, the government sent out advance child tax credits to millions of taxpayers. To determine their final child tax credit on their 2021 tax return, they needed to note how much they had received during the year. 

Many people weren't sure how much they received, and others received letters from the IRS with incorrect numbers. If you accidentally entered the wrong numbers in this section, the IRS may also send you Notice CP11. 

What to Do If You Agree With Notice CP11

If you agree with the changes on the CP11 notice, you should correct the copy of your tax return that you kept for your records. But, you shouldn't send the corrected return to the IRS. The IRS has already made the changes to your account, and it doesn't need an amended return from you. 

Then, you should make arrangements to pay the additional tax liability. If you can afford to pay it in full, you can just mail a check to the IRS or pay online on the IRS's payments page. However, you weren't expecting this new bill, and if you cannot afford to pay it, you may want to explore the following options: 

A tax professional can help you set up a payment plan or help you determine if you might qualify for one of the IRS's tax relief programs. For instance, if you qualify for innocent spouse relief, you may be able to get a separation of the tax liability so you're only responsible for your portion of the tax bill. 

What to Do If You Disagree With Notice CP11

If you disagree with Notice CP11, you should contact the IRS as soon as possible. You must respond within 60 days if you want the IRS to consider reversing the changes.

The agency recommends calling the phone number on the notice. Then, you can talk with an IRS representative about the notice. You may need to mail or fax in additional documentation. 

For best results, you may want to have a tax professional deal with the IRS on your behalf. They talk with IRS representatives every day, and they have an in-depth understanding of the best negotiation methods. 

Alternatively, you can respond to Notice CP11 through the mail. Include a copy of the notice. Then, explain why you disagree with Notice CP11 and provide financial documents to support your case. If you respond through the mail, you should expect to wait at least 30 to 60 days before you get a response. 

What Happens If You Contact the IRS Because You Disagree With Notice CP11?

If the IRS agrees with your argument, the agency can reverse most of the changes it made. But, again, you must contact the IRS within 60 days from the date on the notice. You don't necessarily have to provide additional documentation, but you should provide it if you have information to support your claim. 

The IRS may start an audit on your return if you don't provide information to support the details you included on your tax return. If that happens, an auditor will contact you in about six weeks to explain the process.

What If You Miss the Deadline to Respond to Notice CP11?

The IRS is strict about deadlines. The IRS will not reverse the changes if you miss the 60-day deadline to respond to Notice CP11. You also lose the right to appeal the information on the notice. 

If you wait longer than 60 days to take action, you need to pay the tax. Once you pay, you can dispute the changes and file a claim for a refund. You have until the later of three years from the date you filed the original tax return or two years from the date of your last payment to appeal and request a refund. 

Do Taxes on Notice CP11 Incur Penalties?

If you receive Notice CP11, the taxes assessed with the notice were due on the date your return was due. Even though you weren't aware of these taxes when you filed your return, they are still considered late. As a result, they face late payment penalties. 

However, you can apply for penalty abatement. The IRS is often willing to remove penalties — especially if this was your first offense or if you had a reasonable cause for making the mistake. But you need to request abatement. Generally, the IRS doesn't spontaneously remove penalties from your account.

Is There Interest on Notice CP11 Taxes?

Interest will also accrue on your new tax liability. However, the interest won't start until the due date noted on the return. If you pay the tax liability before that date, you usually won't incur any interest. In most cases, you cannot get the interest removed unless the IRS made a mistake.

How Do You Adjust Estimated Tax Payments After Receiving Notice CP11?

In a lot of cases, the IRS sends Notice CP11 to people when there was an issue with their estimated tax payments. If you want to ensure that you're making the correct estimated tax payments, you should check out Form 1040-ES (Estimated Tax for Individuals). 

This form guides you through calculations that help to ensure you remit the correct amount of estimated tax on your self-employment income during the year. 

Differences Between Notice CP11 and Notice CP12

Both of these notices mean that the IRS made changes to your return. However, while Notice CP11 alerts you that you owe additional tax or that your refund has been reduced, CP12 has the opposite effect. The IRS sends this notice if the changes on your return lowered your tax liability or increased your refund. 

How to Get Help With Notice CP11

Receiving a notice from the IRS can be scary and confusing — especially if the notice says that you owe additional tax. A tax professional can answer your questions and help you make a plan to respond to this notice. 

If you agree with the notice, they can help you make arrangements on your tax liability and show you how to stay in compliance with the IRS moving forward. They can also help you request penalty abatement. But keep in mind that the IRS makes mistakes — if you disagree with the notice, a tax professional can help you respond to the IRS and appeal as needed. 


At TaxCure, we have created a directory of tax professionals from around the country. We are committed to helping you find a licensed tax professional from your local area who is experienced with your particular issue. To get help with Notice CP11, use TaxCure to find a local tax professional today.

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e.g. 10011 or New York, New York