CP145 Notice: What It Means and What You Should Do

Last updated 10/30/2024 by

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Summary:

The IRS CP145 notice informs taxpayers that the IRS cannot credit the full amount of an overpayment or refund to the succeeding tax period. This notice typically arises from payment discrepancies, often due to errors or miscalculations. The CP145 explains the uncredited amount and details steps to address the issue. Acting promptly after receiving the notice is essential to resolve the matter and prevent delays in your tax account.

Receiving a CP145 notice from the IRS can cause concern, especially if you’re expecting a refund or have requested a payment credit to the next tax period. This notice means the IRS couldn’t credit the full amount of the overpayment. Several reasons, such as errors in your tax account, miscalculations, or adjustments, may explain this. In this article, we’ll explore what the CP145 notice means, why you may get it, and the steps you can take to resolve it and ensure your taxes are processed correctly.

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What is the CP145 notice?

A CP145 notice is an official communication from the IRS informing taxpayers that it could not credit the full amount of an overpayment to the next tax period. Overpayments happen when you pay more than you owe on your tax return. Many taxpayers request to have the excess credited to the next tax year to offset future taxes. However, if the IRS finds discrepancies or adjustments in your account, the amount you asked to credit may be reduced, triggering a CP145 notice.

Reasons for receiving a CP145 notice

There are several reasons why the IRS may send a CP145 notice, including:

– Payment miscalculation: If your overpayment amount is miscalculated, the IRS will adjust the credit, reducing the amount carried over to the next tax year.
– Changes to your tax return: Adjustments made by the IRS, such as corrections to tax credits or deductions, may reduce your final balance and overpayment.
– Penalties or interest: If there are outstanding penalties, interest, or taxes from previous years, the IRS may apply part of your overpayment to settle those amounts, reducing what’s credited to the next tax period.

Pro Tip

Consult a certified tax professional before deciding to request a refund or apply the credit toward future taxes. They can help you determine which option is more beneficial based on your financial situation.

How the CP145 notice affects you

A CP145 notice can affect your tax planning for the next year, especially if you relied on the overpayment to offset future tax liabilities. For instance, if you planned to apply an overpayment toward next year’s estimated taxes, a reduced credit may lead to a larger balance when you file. If you don’t address the notice, it can cause confusion during tax filing, particularly if you’re unaware of the adjustments the IRS made to your account.

Impact on future tax filings

Failing to address the notice may cause problems with future tax filings. Overpayments reduce your overall tax liability, so a smaller credit may lead to underpayment penalties or larger tax bills. If adjustments from the CP145 notice aren’t properly accounted for, you might also face delays in processing future returns or refunds.

What should you do when you receive a CP145 notice?

When you receive a CP145 notice, it’s important to act quickly to avoid further complications. Here’s what you should do:

– Carefully read the notice: Review the notice in detail. The CP145 will explain the adjustment and how much couldn’t be credited to the next tax period.
– Review your tax return and records: Double-check your tax return and records to confirm whether errors caused the issue. Compare the overpayment amount on your return with the IRS’s adjustments.
– Contact the IRS: If you believe the IRS made an error, contact them to get clarification. Use the phone number listed on the notice or access the IRS’s secure online services for more information about your account.
– Adjust your tax planning: If the notice is correct, adjust your tax planning accordingly. Ensure that any revised amounts are considered in your tax filings or estimated tax payments for the next year.

Pro Tip

Keep copies of all CP141C notices and any correspondence with the IRS. Maintaining a detailed paper trail can prevent issues if discrepancies arise in the future.

How to respond to the CP145 notice

Responding to a CP145 notice involves understanding the IRS’s details and addressing any discrepancies. Here’s how you should respond:

Steps to take when responding to a CP145 notice

– Verify the details: Make sure you fully understand the IRS’s changes. Cross-reference the overpayment amount in your records with what the IRS lists. Look for any discrepancies, such as adjustments to tax credits or deductions.
– Gather supporting documentation: If you find an error, collect the necessary documents to support your case. This may include your tax return, payment records, and any correspondence with the IRS.
– Contact the IRS: Reach out to the IRS by phone or through its secure online portal to resolve any errors. Have your CP145 notice and documents ready for reference. If an error is confirmed, the IRS can adjust your account promptly.

Other ways to handle a CP145 notice

If the overpayment adjustment involves penalties or interest from prior tax years, request an abatement of penalties, especially if there was a reasonable cause for the error. You can also seek advice from a tax professional on handling disputes with the IRS.

Consider setting up an installment agreement with the IRS if the CP145 notice reveals that you owe additional taxes. This allows you to make payments over time without incurring further penalties.

Common reasons for overpayment discrepancies

Overpayment requests may be reduced or adjusted by the IRS for several reasons. Here are some common issues:

Errors in tax credits or deductions

A CP145 notice often results from errors in claiming tax credits or deductions. The IRS may adjust your overpayment if a credit is improperly claimed or miscalculated. For example, the Earned Income Tax Credit (EITC) or Child Tax Credit (CTC) may be reviewed by the IRS, and adjustments could reduce your refund or overpayment credit.

Past-due taxes, penalties, or interest

If you owe past-due taxes, penalties, or interest, the IRS will apply your overpayment toward settling those amounts before crediting the remainder to the next tax year. The CP145 notice will detail how much of your overpayment was used to cover prior liabilities and how much was carried forward.

Amended returns or IRS adjustments

If you file an amended return or if the IRS makes adjustments to your return after filing, these changes can affect the overpayment credited toward future tax periods. The CP145 notice will reflect any changes to your tax account due to these adjustments.

Pro Tip

If you receive a CP141C notice unexpectedly, check your IRS account online or contact the IRS to ensure there are no errors, especially if you weren’t expecting a credit.

Potential penalties or consequences if you don’t respond

Ignoring a CP145 notice or not addressing the adjustments could have serious consequences for your tax account. Here are some possible outcomes:

– Delayed refunds: If you don’t resolve the issue, the IRS may withhold your refund until the matter is settled.
– Increased penalties and interest: Unresolved discrepancies can lead to additional penalties or interest being added to your account.
– Future filing complications: Issues from the CP145 notice could create confusion during future tax filings, leading to further delays or penalties.

It’s essential to resolve the issues as soon as possible to avoid complications.

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Frequently asked questions

What should I do if I disagree with the IRS’s adjustments in the CP145 notice?

If you disagree with the adjustments in the CP145 notice, gather supporting documents like your tax return, payment receipts, or relevant records. Contact the IRS by phone or through secure online services to dispute the adjustments. You may also send a written explanation along with the necessary documentation. Consulting a tax professional can also help.

Can I apply for a payment plan if the CP145 notice indicates I owe additional taxes?

Yes, if the CP145 notice shows that you owe more taxes than you can pay immediately, you can apply for an IRS payment plan or installment agreement. This allows you to make manageable monthly payments. Request the plan online through the IRS’s website or by calling the IRS.

What happens if I receive multiple CP145 notices in different tax years?

Receiving multiple CP145 notices in different tax years may point to recurring issues with your tax filings, such as miscalculations or unpaid tax liabilities. Carefully review each notice and follow the instructions to resolve the discrepancies. It may be helpful to consult a tax professional to ensure accuracy and avoid repeated notices.

How can I prevent future CP145 notices?

To prevent future CP145 notices, ensure your tax returns are accurate and all payments are correctly reported. Double-check your calculations, especially if you request an overpayment credit for the next tax year. Address any outstanding tax balances, penalties, or interest with the IRS to avoid surprises that could reduce your overpayment credit.

Is it possible to get a refund instead of having the overpayment credited to the next tax period?

Yes, you can request a refund instead of applying the overpayment to the next tax period. When filing your return, choose to have any overpayments refunded to you. If you’ve already requested the overpayment credit and want to change it, contact the IRS to modify your request before they process it.

Need help understanding other IRS letters and notices? Visit our comprehensive guide to IRS Letters and Notices or search for the document you received in the table below.

IRS Letter or Notice Number

Notice Description

CP01	The IRS verified your claim of identity theft and will monitor your account.
CP01H	The IRS received a tax return with a social security number that belongs to a dead person.
CP02H	Money is due on an amended return based on a grant received due to Hurricane Katrina, Rita, or Wilma.
CP03C	You received the First-Time Homebuyer Credit for a house you purchased.
CP04	You may be eligible for tax deferment because either you or a spouse served in a combat zone, a qualified contingency operation, or a hazardous duty station during the tax year specified on your notice.
CP08	You may be entitled to additional money due to the Additional Child Tax Credit.
CP10	Your tax return changed due to a miscalculation, and the refund you wanted to apply to an estimated tax payment has changed.
CP10A	Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment has changed.
CP11	You owe money because the IRS amended your return due to a miscalculation.
CP11A	Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment also changed.
CP11M	Your tax return changed due to a miscalculation of the Making Work Pay and Government Retiree Credit, and the refund you wanted to apply to an estimated tax payment has changed.
CP12	You are due a bigger refund because the IRS corrected one or more mistakes on your tax return.
CP12A	The IRS made changes to correct the Earned Income Credit (EIC) claimed on your tax return.
CP12E or CP12F	The IRS corrected a miscalculation on your return.
CP12M	The IRS made changes to the computation of the Making Work Pay and/or Government Retiree Credits on your return.
CP12R	The IRS made changes to the computation of the Rebate Recovery Credit on your return.
CP13	The IRS made changes to your return due to a miscalculation. There is no refund or amount due. Your balance is zero.
CP13A	The IRS made changes to your return due to a miscalculation of the Earned Income Credit. There is no refund or amount due. Your balance is zero.
CP13M	The IRS made changes to your return due to a miscalculation of the Making Work Pay credit or the Government Retiree Credit. There is no refund or amount due. Your balance is zero.
CP13R	The IRS made changes to your return due to a miscalculation of the Recovery Rebate Credit. There is no refund or amount due. Your balance is zero.
CP14	You owe money on unpaid taxes.
CP16	The IRS made changes to your return due to a miscalculation. The refund you were due was applied to other tax debts.
CP21A	You owe money due to the changes you requested that the IRS make on your tax returns.
CP21B	You are due a refund due to the changes you requested that the IRS make on your tax returns. The money should arrive within 2 to 3 weeks.
CP21C	The IRS made the requested changes to your tax return. You will not receive a refund, and there is no tax due. Your balance is zero.
CP21E	As a result of your recent audit, the IRS made changes to your tax return, and you owe money as a result of those changes.
CP21I	The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes.
CP22A	The IRS made the changes you requested, and you owe money as a result.
CP22E	As a result of your recent audit, the IRS changed your tax return, and you now owe money.
CP22I	The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes.
CP23	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You owe taxes due to these changes.
CP24	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes.
CP24E	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes.
CP25	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You are not due a refund, nor do you owe any money. Your balance is zero.
CP31	You need to update your address because your refund check was returned to the IRS.
CP45	The IRS was unable to apply your overpayment to your estimated tax as you requested.
CP49	The IRS used all or part of your refund to pay a tax debt.
CP53	Your refund check will be sent by mail because the IRS can’t provide your refund through direct deposit.
CP57	The bank declined your payment, so the IRS was unable to draft funds from your bank account.
CP71	A reminder of the amount you owe in tax, penalty, and interest.
CP71A	A reminder of the amount you owe in tax, penalty, and interest.
CP71C	A reminder of the amount you owe in tax, penalty, and interest.
CP71D	A reminder of the amount you owe in tax, penalty, and interest.
CP88	The IRS is holding your refund because you haven't filed one or more tax returns, and it believes you will owe tax.
CP90	The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy in a Collection Due Process hearing.
CP91	The IRS will levy up to 15% of your social security benefits for unpaid taxes.
CP120	The IRS needs documentation of your tax-exempt status.
CP120A	Your organization’s tax-exempt status has been revoked because it failed to file a Form 990 series return for three consecutive years.
CP130	You may no longer need to pay the Alternative Minimum Tax (AMT) because your tax return filing requirements changed.
CP152	The IRS received your return.
CP153	The IRS will send your refund by mail because your direct deposit did not go through.
CP161	You have an unpaid balance due to the IRS.
CP166	Your monthly payment to the IRS did not go through due to insufficient funds in your bank account.
CP178	You may no longer owe excise tax because your tax return filing requirements changed.
CP231	You need to update your address because your refund was returned to the IRS.
CP259	You did not file the business tax return identified in the notice.
CP259A	You should have filed these forms but did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax, or Form 990-N (e-Postcard).
CP259B	The IRS requires you to file these forms but did not – Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.
CP259C	The IRS believes that you are a private foundation, but did not file the required Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.
CP259D	You must file this form, but you did not – Form 990-T, Exempt Organization Business Income Tax Return.
CP259E	You should have filed this form, but you did not – Form 990-N (e-Postcard) or Form 990/990-EZ, Return of Organization Exempt From Income Tax.
CP259F	The IRS requires you to file this form but did not – Form 5227, Split-Interest Trust Information Return.
CP259G	The IRS requires you to file this form, but you didn’t – Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations.
CP259H	As a tax-exempt political organization, you must file this form, but you did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax.
CP276A	You submitted your tax liability schedule incorrectly. The IRS typically charges a Federal Tax Deposit (FTD) penalty for this but did not this time.
CP276B	The IRS did not receive the correct amount of tax deposits. It normally charges a Federal Tax Deposit (FTD) penalty but did not this time.
CP297	The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing.
CP297A	The IRS has levied your assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing.
CP298	The IRS notifying you of its intent to levy up to 15% of your social security benefits for unpaid taxes.
CP501	You have a balance due on one of your tax accounts.
CP503	You have an unpaid balance on one of your accounts, and the IRS has not heard from you.
CP504	You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy your state income tax refund to apply it to the amount you owe.
CP504B	You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy certain property or rights to property to apply it to the amount you owe.
CP521	A reminder that you have an installment agreement payment due.
CP523	You have defaulted on your payment agreement. Therefore the IRS is terminating the agreement and will levy your assets.
CP601	Usted tiene un saldo pendiente de pago (dinero que le debe al IRS) en una de sus cuentas contributivas.
CP603	No hemos recibido respuesta de parte de usted y todavía tiene un saldo sin pagar en una de sus cuentas contributivas.
CP604	Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará cualquier reembolso de impuestos estatales al que tenga derecho y aplicarlo al pago de su deuda.
CP604B	Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará ciertas propiedades o derechos de propiedad y lo aplicará al pago de su deuda.
CP621	Este aviso es para notificarle que usted tiene un plan de pagos a plazos vencido. Por favor, envíe el pago inmediatamente.
CP623	Este aviso es para informarle nuestra intención de cancelar su plan de pagos a plazos y confiscar (embargar) sus bienes. Usted incumplió en su acuerdo.
CP711	Nosotros realizamos cambios a su planilla debido a que entendemos que hubo un cálculo erróneo. Como resultado de estos cambios, usted adeuda dinero por sus contribuciones.
CP721	Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos.
CP722	Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos.
CP771	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP772	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP773	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP774	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP959	Usted no radicó su planilla de contribución de negocios identificada en este aviso.
CP2000	The income or payment information on file doesn’t match your tax return. The discrepancy may result in an increase or decrease in your tax due.
CP3219A	The IRS has received information that is different from what you reported on your tax return. This may result in an increase or decrease in your tax.
CP3219N	The IRS didn’t receive your tax return, so it calculated your return based on the information received from employers, financial institutions, and others. If you want to challenge the proposed tax, you have 90 days from the date of this notice. If you are outside the country, you have 150 days.
Letter 0012C	The IRS needs additional information to process your tax return.
Letter 0484C	The IRS wants a completed
Letter 0525	Updates you on proposed changes after an IRS examination. Any changes are explained and details the refund due or taxes owed.
Letter 531	IRS Notice of Deficiency. The information the IRS received about you was different from what you reported on your return.
Letter 0668D(LP 68)	The IRS released their levy.
Letter 0549C	Your tax bill was paid.
Letter 0681C	The IRS accepted your payment proposal. However, this is not a formal Installment Agreement.
Letter 0757C	You did not adhere to the terms of your Installment Agreement.
Letter LT 11	The IRS plans to seize your property or rights to property.
Letter 1058	The IRS has not received your payment. It plans to seize your property or rights to property.
Letter 1615 (LT 18)	You must respond to the IRS within 10 days of this notice regarding past due tax returns.
Letter 1737 (LT 27)	Complete and sign Form 433F, Collection Information Statement.
Letter 1961C	Your application for a Direct Debit Installment Agreement was declined. It explains why and what you need to do to qualify.
Letter 1962C	Your application for a
Letter 2050 (LT 16)	The IRS is trying to collect unpaid taxes from you from returns that have been filed or from returns that have not been filed.
Letter 2257C	The IRS is providing the payoff amount that you requested.
Letter 226-J	An IRS letter to large employers notifying them that they may be liable for an Employer Shared Responsibility Payment (ESRP).
Letter 2271C	A request for an Installment Agreement has been approved. It explains the fees and how to qualify for a Low Income Fee Reduction. The letter may also request missing information.
Letter 2272C	An IRS letter explaining why your request to pay the balance due in installments was declined.
Letter 2273C	A confirmation letter of your request to pay the balance due in installments. It contained the amount to pay, fees charged, and where to send payment. Instructions on how to apply for the Low Income Fee Reduction included.
Letter 2318C	A response to a request to pay taxes due to payroll deductions. It also explains the fees that are charged.
Letter 2357C	The IRS is admitting that it did not send you the balance due notices that it should have.
Letter 2603C	The IRS accepted your installment agreement. The IRS will file a Notice of Federal Tax Lien on your personal property.
Letter 2604C	The IRS has accepted your request for installment payments. This IRS letter provides the monthly payment, the address where to send it, and the fees charged. The letter also provides instructions on how to apply for the Low Income Fee Reduction.
Letter 2761C	The IRS is requesting your combat zone service dates to ensure that it provides you with the special provisions and protection of the combat zone deferment. Copies of military orders or other documentation to support your time served may be requested. Civilians working in support of the Armed Forces may be required to provide a Letter of Authorization or a letter from their employer.
Letter 2789C	An annual reminder notice, as required by law, of the balance due to the IRS. It explains that penalties and interest continue to accrue until the balance is fully paid.
Letter 2840C	Confirms your Installment Agreement request and includes the payment amount and due date. This IRS letter explains the fees charged for paying monthly and explains how to apply for the Low Income Fee Reduction (if you qualify).
Letter 3030C	Provides an explanation of the tax, penalty, and interest still due on your account.
Letter 3127C	A confirmation of your request to make a change to your Installment Agreement. This IRS letter explains the fees for the change. Changes can be to the payment amount or due date, or it can include additional liabilities.
Letter 3174	A reminder of taxes due after the IRS has sent a Notice of Intent to Levy.
Letter 3217C	The IRS has accepted your request to pay the balance in installments. This IRS letter provides your payment amount, the due date, and fees charged. The letter also provides instructions on applying for the Low Income Fee Reduction (if you qualify).
Letter 3228 (LT 39)	A request to pay the balance due within 10 days using the envelope provided.
Letter 3500	The IRS has received your documents, and it needs additional time to review them.
Letter 3572	Your Federal Income Tax Return has been selected for examination. The IRS auditor requests that you call to schedule an audit appointment.
Letter 4883C	The IRS received your federal income tax return but needs more information to verify your identity in order to process your tax return accurately.
Letter 4903 (LT 26)	You must file your tax returns immediately. The IRS has previously contacted you, but it did not receive a response.
Letter LP 47	The IRS is trying to locate the person identified in the letter and is requesting that you provide their new address.
Letter LP 59	The IRS has not received a response to the notice of levy it previously sent.
Audit Letter 2205	The IRS manages audits either by mail or through an in-person interview to review your records. The interview may be at an IRS office (office audit) or the taxpayer’s home, place of business, or accountant’s office (field audit).
Letter 915	You recently underwent an audit, and the IRS informs you that you now owe taxes.

Key takeaways

A CP145 notice means the IRS was unable to credit your overpayment to the next tax period.
Common reasons include tax miscalculations, adjustments, or prior penalties.
Review your tax records and the notice carefully to check for errors.
Respond promptly to prevent delays in tax returns or penalties.

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