CP267A Notice: Steps to Take and Avoid Penalties

Last updated 10/30/2024 by

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Summary:

The CP267A Notice is an IRS correspondence notifying taxpayers that their tax account has incurred a penalty due to a discrepancy, often related to the failure to make an estimated tax payment or underpayment. The notice outlines the penalty amount and the tax period associated with the issue. It also provides instructions on how to address the penalty, request an abatement, or make payments. This article will guide you through understanding the CP267A Notice, its impact on your tax account, and steps you can take to resolve the issue efficiently.

Receiving a notice from the IRS can be concerning, especially when it’s related to penalties on your tax account. The CP267A Notice informs taxpayers about a penalty due to a discrepancy in their tax payments, often connected to underpayments or missed estimated tax payments. If you’ve received a CP267A Notice, it’s important to understand why the penalty was assessed and how to resolve the situation to avoid further complications. In this article, we’ll explain what the CP267A Notice entails, how it affects you, and the steps you can take to address it.

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What is the CP267A notice?

The IRS issues a CP267A Notice when it determines that a taxpayer has incurred a penalty on their tax account, typically related to estimated tax payments. The notice provides details on the nature of the penalty, the tax period it covers, and the amount owed. There are various reasons the IRS may impose this penalty, such as:

Failing to make a required estimated tax payment.
Underpayment of estimated taxes throughout the tax year.
Late payment of estimated tax obligations.

Estimated tax payments are prepayments of income taxes made periodically during the year. If these payments are insufficient or delayed, the IRS may assess a penalty to encourage timely and accurate payment of taxes. The CP267A Notice serves as a formal notification of the penalty and provides instructions on what to do next.

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How the CP267A notice affects you

Receiving a CP267A Notice indicates that the IRS has charged a penalty to your tax account, which could have financial and administrative consequences. The penalty amount will depend on factors such as the size of the underpayment, the number of days the payment was late, and the applicable interest rate. Here’s how the notice may affect you:

Additional financial burden: The penalty will add to the total amount you owe, potentially increasing your overall tax liability.
Risk of further penalties: If you don’t address the penalty promptly, additional interest and penalties may accumulate, leading to a larger balance.
Administrative complications: Unresolved penalties can complicate future tax filings and may result in enforcement actions, such as wage garnishments or liens.

The notice should be taken seriously, as ignoring it could lead to more significant financial problems.

Pro Tip

Set up IRS account alerts online to get real-time notifications on any changes to your tax return or account. This helps you stay updated on adjustments and due dates.

What should you do when you receive a CP267A notice?

If you’ve received a CP267A Notice, taking prompt action can help minimize the impact of the penalty. Here are the steps you should follow:

Review the notice: Read the CP267A Notice carefully to understand the penalty amount, the tax period in question, and the reason for the penalty.
Verify the details: Double-check your records to confirm whether the penalty is accurate. Compare the notice with your tax payments and any estimated tax obligations you may have had.
Pay the penalty: If you agree with the penalty, make the payment by the due date specified in the notice to avoid additional interest or penalties.
Request a penalty abatement: If you believe the penalty was assessed in error or if there are reasonable causes for your underpayment, you may request an abatement or waiver of the penalty.
Correct any payment schedules: If the penalty was due to underpayment of estimated taxes, consider adjusting your estimated tax payment schedule for the following year to avoid future penalties.

How to respond to the CP267A notice

Steps to take when responding to a CP267A notice

When addressing a CP267A Notice, it’s essential to respond quickly and accurately. Follow these steps to handle the notice appropriately:

1. Contact the IRS if needed: If you need clarification about the penalty, reach out to the IRS using the contact information provided in the notice. This can help you understand the issue in more detail and determine your next steps.
2. Submit documentation for abatement requests: If you request a penalty abatement, provide documentation that supports your case, such as proof of timely payments or evidence of circumstances beyond your control that prevented payment.
3. Follow up on your request: After submitting a request for abatement or adjustment, follow up with the IRS to ensure that it is being processed.

Pro Tip

Keep detailed records of your estimated tax payments throughout the year. If you receive a CP267A notice, these records can help you quickly verify if the penalty was applied correctly and provide evidence for any abatement requests.

Other ways to handle a CP267A notice

In addition to the standard procedures for addressing the notice, there are alternative options you can consider:

– Set up a payment plan: If you’re unable to pay the penalty in full, you may qualify for an installment agreement with the IRS.
– Consult a tax professional: If your situation is complex or you’re uncertain about how to proceed, seek advice from a certified tax professional, such as a CPA or tax attorney.
– Utilize the IRS Taxpayer Advocate Service: This service provides free assistance to taxpayers facing challenges in resolving tax-related issues, especially if you’ve already attempted to resolve them through normal channels.

Further support options for addressing the CP267A notice

If you’re not sure how to handle the CP267A Notice, various resources can help:

IRS website: The IRS website has extensive information on penalty notices, including steps to request an abatement.
Local IRS office: Visit your local IRS office for in-person assistance, or call the support hotline for help resolving your issue.
Taxpayer Advocate Service: This independent organization can help if you’re struggling to resolve your tax issue through normal channels.

Potential penalties or next steps if you don’t respond

Ignoring the CP267A Notice could lead to serious consequences, such as:

Accumulated interest and penalties: If the original penalty remains unpaid, additional fees and interest may accrue, increasing the total amount owed.
Enforcement actions: The IRS may take enforcement actions, including wage garnishments, bank levies, or filing a federal tax lien against your property.
Negative impact on future tax filings: Unresolved penalties may complicate your future tax returns and result in delayed processing.

To avoid these outcomes, it’s critical to address the notice as soon as possible.

Pro Tip

If you frequently owe penalties for underpayment of estimated taxes, consider adjusting your tax withholding on your W-4 form or increasing your estimated tax payments to avoid future CP267A notices.

What potential outcomes are possible?

After responding to the CP267A Notice, several potential outcomes may follow:

Payment resolves the issue: If you pay the penalty, the IRS will update your account, and no further action will be necessary.
Successful penalty abatement: If the IRS approves your abatement request, the penalty will be waived, and your account will be adjusted accordingly.
Continued review: If the IRS needs additional information, they may request further documentation before making a decision.

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Frequently asked questions

What should I do if I can’t afford to pay the CP267A penalty immediately?

If you cannot afford to pay the CP267A penalty in full, consider setting up a payment plan with the IRS. The agency offers installment agreements that allow you to pay off the penalty in smaller monthly payments. You can apply for an installment agreement online or by submitting Form 9465, “Installment Agreement Request.” It’s important to act quickly to avoid additional interest and penalties.

How do I request a penalty abatement for the CP267A notice?

To request a penalty abatement, you need to demonstrate reasonable cause for the underpayment or missed estimated tax payments. This could include circumstances such as serious illness, natural disasters, or other events beyond your control. To submit your request, write a letter explaining your situation and include any supporting documentation. You can also call the IRS and discuss your case with a representative.

What if I already paid the penalty but disagree with the CP267A notice?

If you have already paid the penalty but believe it was assessed in error, you can still request a refund through the IRS by filing Form 843, “Claim for Refund and Request for Abatement.” You should include a detailed explanation of why you believe the penalty was incorrect and attach any relevant documentation. The IRS will review your claim and decide whether to issue a refund.

Can the CP267A notice be related to identity theft?

While the CP267A notice is generally related to tax payment discrepancies, in rare cases, it could be linked to identity theft if someone has filed fraudulent tax returns or made unauthorized changes to your tax account. If you suspect identity theft, contact the IRS immediately, and consider filing Form 14039, “Identity Theft Affidavit,” to protect your account.

Will the CP267A penalty affect my credit score?

Tax penalties like the CP267A notice do not directly affect your credit score because the IRS does not report tax debts to credit bureaus. However, if the penalty goes unpaid for a significant period, the IRS may file a federal tax lien against your property. A tax lien is a public record and can negatively impact your credit report, making it more difficult to obtain credit in the future.

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

The CP267A Notice informs taxpayers of a penalty assessed on their tax account, typically due to underpayment or missed estimated tax payments.
Responding promptly can help minimize additional interest and penalties.
Options for resolving the notice include paying the penalty, requesting an abatement, or setting up a payment plan.
Ignoring the notice may lead to severe consequences, including enforcement actions and increased financial burden.

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