CP268 Notice: What It Means and How to Resolve It
Summary:
The CP268 notice is issued by the IRS when they identify a potential miscalculation on your tax return. This notice informs you that changes were made to your return, and typically, it means you either owe additional taxes or are due a lower refund than you initially expected. Addressing the notice promptly ensures that you understand the adjustments and take necessary actions, whether to make a payment, correct the error, or request clarification from the IRS.
Receiving any notice from the IRS can be nerve-wracking, especially when it concerns changes to your tax return. The CP268 notice is specifically sent to notify taxpayers of a discrepancy or miscalculation in their return. The IRS issues this notice when they believe there is an error in the calculations you submitted, which may affect your tax liability or refund. While the notice itself can seem daunting, understanding its purpose and taking immediate action can help you avoid penalties, additional interest, or delays in receiving your refund. In this article, we’ll break down what the CP268 notice is, what it means for you, and how to respond effectively.
Get Competing Personal Loan Offers In Minutes
Compare rates from multiple vetted lenders. Discover your lowest eligible rate.
It's quick, free and won’t hurt your credit score
What is a CP268 notice?
The CP268 notice is a letter sent by the IRS to inform taxpayers that there has been a miscalculation on their tax return. Essentially, it tells you that the IRS found an error in the numbers submitted, and as a result, they’ve made changes to your return. The notice typically comes with an updated tax calculation, showing the adjustments made by the IRS. These changes could impact the amount of tax you owe or the refund you expect to receive.
Why does the IRS send a CP268 notice?
The IRS sends a CP268 notice when there is a belief that there is a discrepancy in the calculations made on your return. This could be due to several factors:
- Mathematical errors: Simple calculation mistakes are a common cause.
- Errors in claiming deductions or credits: If a deduction or credit was calculated incorrectly, the IRS will adjust your return accordingly.
- Discrepancies in reported income: If your reported income doesn’t match IRS records, changes will be made.
This notice is a way for the IRS to inform you of these changes and prevent any further issues with your tax return, such as penalties or additional interest charges.
Pro Tip
Use the IRS’s online payment system to quickly and securely pay any taxes owed. This helps you avoid delays in processing or additional penalties.
Struggling with IRS notices? If you’ve received an IRS letter and aren’t sure how to handle it, you might want to explore professional tax relief options. Optima Tax Relief has helped thousands of people resolve their tax issues and get back on track with the IRS. Learn more about how they can assist you with your situation.
How does the CP268 notice affect you?
The impact of receiving a CP268 notice depends on the specific changes made to your return. In most cases, the IRS is adjusting your tax liability. The three possible outcomes of a CP268 notice are:
- Owing additional taxes: The most common result of a CP268 notice is a tax liability greater than originally reported. This occurs when the IRS finds that you underreported income or miscalculated your taxes.
- Reduced refund: If you expected a refund but the IRS finds errors in your return, your refund could be lower than anticipated.
- No change: In rare cases, the IRS may identify an error that does not affect the overall outcome of your tax return. The notice will still provide an explanation of the adjustment made.
If you owe additional taxes, the notice will detail the amount due, including any penalties and interest that have accrued. It is crucial to address these changes quickly to avoid further penalties or delays in refund processing.
Steps to take after receiving a CP268 notice
If you receive a CP268 notice, don’t panic! There are clear steps you can take to resolve the issue promptly.
1. Review the notice carefully
The first step is to carefully read through the CP268 notice. The notice will provide details about the changes the IRS made to your return and explain why those changes were made. Compare the information in the notice with your original return to understand where the discrepancies occurred.
2. Check your records
Go back to your tax records, including your original return, income statements, and any supporting documents for deductions or credits. Verify whether the IRS’s adjustments are accurate based on your own records. If the IRS found an error that you agree with, you can move on to the next step of resolving the payment or processing any remaining refund.
3. Respond promptly if you disagree
If you believe the IRS made an error, it’s essential to respond quickly. The CP268 notice will provide instructions on how to challenge the changes. You may need to submit additional documentation or file an amended return if you find that your original return was correct.
4. Pay any remaining taxes
If the IRS adjusted your return and you owe additional taxes, the notice will include details about how much you owe and when the payment is due. You can pay the amount owed online through the IRS’s payment portal, by mail, or by phone. It’s important to make the payment by the due date to avoid further penalties and interest.
5. Contact the IRS if needed
If you need further clarification on the changes or if you believe an error was made, you can contact the IRS directly. The CP268 notice will include a contact number for assistance. Having your tax records handy when you call will help speed up the process.
Pro Tip
Consult a tax professional before responding to a CP268 notice if you are unsure about the changes. Expert guidance can help you avoid mistakes or missed deadlines.
Common reasons for receiving a CP268 notice
There are several common reasons why taxpayers might receive a CP268 notice from the IRS:
1. Incorrect math calculations
Tax returns often involve multiple calculations, from determining taxable income to calculating deductions and credits. A simple math error, such as entering the wrong number or miscalculating a total, can lead the IRS to issue a CP268 notice.
2. Misreported income
Income discrepancies are another major cause of CP268 notices. This can happen if there is a difference between the income you reported and what the IRS has on file from your employer, bank, or other sources of income. Double-check all your W-2s, 1099s, and other income forms to ensure accuracy.
3. Issues with claiming tax credits or deductions
Claiming certain tax credits or deductions incorrectly, such as the Child Tax Credit, Earned Income Credit, or mortgage interest deduction, can also trigger a CP268 notice. If the IRS finds that you didn’t meet the qualifications for a credit or calculated the deduction incorrectly, they will adjust your return.
Pro Tip
Keep organized tax records year-round, including income statements and deduction documentation. This makes it easier to verify information if you receive a CP268 notice.
What happens if you don’t respond?
Ignoring a CP268 notice can lead to more severe consequences. If you owe taxes and do not respond by making the necessary payment or addressing the issues raised, the IRS may take enforcement actions. These actions include:
- Applying additional penalties and interest to the outstanding balance.
- Seizing your tax refund to cover the owed taxes.
- Taking enforcement actions like wage garnishment or placing a lien on your property.
It’s crucial to respond promptly to the CP268 notice to avoid escalating issues with the IRS.
Looking for the best way to reduce your tax burden? We’ve compiled a list of the Best Tax Relief Companies to help you navigate tax challenges and save money. Click here to discover trusted experts who can assist you with tax resolution, IRS negotiations, and more!
Frequently asked questions
What should I do if I can’t pay the additional tax owed?
If you are unable to pay the additional tax amount listed on the CP268 notice, you can set up a payment plan with the IRS. The IRS offers options such as short-term payment plans or long-term installment agreements, depending on the amount owed. You can apply for a payment plan online, by phone, or by submitting Form 9465, “Installment Agreement Request.”
How can I avoid receiving a CP268 notice in the future?
To avoid receiving a CP268 notice in the future, ensure that your tax return is accurate before filing. Double-check your math calculations, ensure that all income is reported correctly, and verify that you are eligible for any deductions or credits claimed. Using tax preparation software or consulting with a tax professional can also help reduce errors.
Will receiving a CP268 notice delay my refund?
Yes, receiving a CP268 notice could delay your refund, especially if the IRS made changes to your tax return that reduced the refund amount. The delay typically occurs because the IRS needs time to process the corrections and ensure everything is in order. Responding promptly and addressing any discrepancies quickly will help minimize the delay.
Can I file an amended return if I find an error after receiving a CP268 notice?
Yes, you can file an amended tax return using Form 1040-X if you realize that your original return contained errors that were not addressed by the IRS. However, ensure you wait until the IRS finishes processing your initial return and any changes resulting from the CP268 notice before filing an amendment. Filing too early may cause further delays.
How long does it take the IRS to resolve a CP268 notice issue?
The time it takes to resolve a CP268 notice issue varies depending on the complexity of the case and the promptness of your response. Typically, the IRS may take 4 to 6 weeks to process the corrections after receiving all necessary documentation. If additional issues arise or further documentation is needed, it may take longer.
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.
| 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 CP268 notice informs you of changes made to your tax return due to a perceived miscalculation.
- Common reasons for receiving a CP268 notice include mathematical errors, misreported income, and issues with credits or deductions.
- It’s important to respond promptly, either by agreeing with the changes or disputing them if you believe the IRS made an error.
- Ignoring the CP268 notice can result in penalties, interest, or enforcement actions by the IRS.
- If you owe taxes, you can pay the amount due through various IRS-approved methods, including online payments.
Share this post:
Table of Contents