CP 11 - Tax Masters Explains What IRS Notice CP 11 Means

What is a CP 11?

A CP 11 is a “changes to tax return, balance due” notice from the IRS. Basically, it’s the IRS telling you that you have been audited and that they believe that you owe more money. This IRS tax notice is essentially a bill, telling you what to pay. What most people do not realize is that a CP11 means the IRS has adjusted your tax liability, which in turn means you have the right to challenge the adjustment. Recently the IRS has stepped up its use of sending CP 11 tax notices because it is the easiest way for the IRS to increase collections with the least amount of effort. Unlike a filed audit or desk audit, the correspondence audit happens behind closed doors at the IRS. Only after they assume they are right and you are wrong will they send the CP 11 tax notice. Most people will simply pay the bill and move on. The government knows this and uses the correspondence audit very effectively. The important thing to understand is that if you do not believe the CP 11 notice is correct, you have the right to appeal it.

How serious is a CP 11?

Well, the IRS believes you owe money which is never a good thing. That being said it is not as serious as a CP 90 or CP 91, where the IRS can go ahead and start to place a lien/levy/garnishment on your assets. However, a CP 11 can quickly become more serious if you ignore it. Do not put off responding to a CP 11. You either agree with the adjustment, in which case you should pay it, or you do not, in which case you may want to appeal it.

What Shouldn’t I do?

Don’t ignore this – the IRS won’t like it. Ignore it too long and the IRS will come after your paycheck, your accounts, and even your property.

What Should I do about a CP 11?

If you agree with the increased assessment, go ahead and pay it. Send a check. If you don’t agree, you have the right to appeal the change to your tax return. There should be instructions to appealing this in your notice. Your best bet is to call someone with a lot of experience providing tax audit help to taxpayers and hire them to help you challenge the audit.

Important Information:

The IRS will not deal with a taxpayer in any way before ALL delinquent tax returns have been filed. You must be compliant before trying to negotiate any deals.

Disclaimer: The above should not be taken as tax advice but as common sense responses to an IRS notice.