Now What, I Got a CP49 Notice from the IRS, Help, SFS Tax, SFS Tax Problem Solutions, cute dog, pug, hardwood floor

Now What? I Got a CP49 Notice from the IRS. Help!

You diligently complete and file your tax return… to your delight, you’re getting a refund! You are excited when you see the IRS envelope show up in your mailbox. At last, your money is here! Now you can pay bills/get your car fixed/blow it in a shopping spree.

Not so fast.

When you open the envelope, there is no check. There is only a notice.

In the upper right-hand corner, you see that it is a CP49.

What the heck does that mean?

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A CP49 Notice: What You Need to Know

You will receive a CP49 notice from the IRS when you file for a refund, but that refund is applied to an underpayment of taxes for another year.

The CP49 is pretty explicit in its explanation.

On the sample form to the left, it says “We applied your 2017 Form 1040 overpayment to an unpaid balance.” (In the eyes of the IRS, you are issued a refund when you overpay your taxes throughout the year; thus you have an overpayment that needs to be refunded).

Now, it’s not really an overpayment if you owe tax from some other year. Therefore, if there’s still an outstanding balance on that account, your “refund” will go toward that balance.

If there is any money left after paying off your outstanding balance, then the CP49 will state this.

What if My Refund is Larger than My Old Tax Debt?

You will get the remainder of your refund, if there is any.

As you can see on the sample form above,, this person had an outstanding tax debt of $500 and filed for a $750 refund. The CP49 states that the refund due will now be $250 after the IRS applied $500 to the amount owed.

Just in case there is any confusion, the CP49 will also state what year the taxes were owed. In this case, it was 2015.

To sum it all up, the form states “As a result, your refund has been reduced to $250.00.” In the Summary section, the math is broken out to make everything crystal clear.

When Will You Receive Your Remaining Refund?

Any refund leftover after satisfying an old tax debt should be received within two to three weeks of the CP49 notice.

Now, if the IRS finds more outstanding tax debts, that won’t happen.

The CP49 also informs you that it won’t be depositing your remaining refund in your bank account, even if you asked for it. Because of the “additional processing” time, you will be receiving a paper check.

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What if I Don’t Have Any Unpaid Taxes?

If you were aware of an outstanding balance, receiving a CP49 notice should not be a shock to you.

However, if it is news to you that you even had an outstanding balance, don’t panic.

A CP49 notice lets you know that the IRS believes that you do.

You will now need to take steps to clear up the confusion before you can get that refund (overpayment) you were counting on.

One possible scenario is that a former (or current) spouse has a debt you are unaware of. If you filed “married filing jointly” for the tax year in question, then you are jointly liable for the debt. This is why the IRS includes its “protection from your spouse’s debt” section.

If you aren’t liable for your spouse’s tax debt, you do have options. The IRS calls the provision “injured spouse.” You may be able to get back your portion of a refund that was used to pay your spouse’s tax debt.

You can submit a claim with the IRS or enlist the help of an Enrolled Agent (EA) can help you get back what is rightfully yours.

Jeffrey Schneider, EA, CTRS, NTPI Fellow has the knowledge and expertise to help you reach a favorable outcome with the IRS. He is the head honcho at SFS Tax & Accounting Services as well as an Enrolled Agent and a Certified Tax Resolution Specialist.
Now What? I Got A Tax Notice From The IRS. Help! Defining and deconstructing the scary and confusing letters that land in your mailbox. Jeff defines and deconstructs the scary and confusing letters in a fashion that mixes attention to detail with humor and an intricate clarification of what is what in the world of the IRS.

The book is available in paperback and ebook on
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