CP299 Notice: What It Means When the IRS Flags Your Taxes
Summary:
The CP299 Notice is issued by the IRS when a taxpayer’s account is at risk due to non-filing of employment tax returns. This notice serves as a warning that if action is not taken, further penalties and legal consequences may follow. The CP299 provides steps taxpayers should take to resolve the issue, including filing the missing returns, paying outstanding taxes, or providing a valid explanation for non-filing.
Receiving an IRS notice can be unsettling, especially when it concerns your tax responsibilities as an employer. The CP299 Notice is a formal notification that your business has not filed one or more employment tax returns, which can lead to penalties and additional scrutiny. Understanding the purpose of the notice, what it entails, and how to address it promptly is crucial for resolving the issue and avoiding further complications. In this article, we’ll explain the CP299 Notice in detail and guide you through the steps to resolve it, ensuring your business stays in compliance with IRS regulations.
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 CP299 Notice?
The CP299 Notice is sent by the IRS to notify businesses of a missing or unfiled employment tax return. The IRS issues these notices to prompt employers to fulfill their tax obligations, which include filing forms such as Form 941 (Employer’s Quarterly Federal Tax Return) or Form 940 (Employer’s Annual Federal Unemployment Tax Return).
When the IRS does not receive an expected tax return, it may issue a CP299 Notice to alert the employer of the missing documentation. The notice typically states which tax return is missing, the period in question, and the consequences of failing to respond. Employers should act quickly to address the notice to avoid penalties, interest, and potential enforcement actions.
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 the CP299 Notice affects your business
When your business receives a CP299 Notice, it indicates that the IRS has identified a discrepancy in your employment tax filings. The notice serves as an alert that your business has failed to submit required tax forms for specific periods. This can lead to several consequences:
- Penalties and interest on unpaid taxes may accrue if the missing returns are not filed promptly.
- Your business could face additional scrutiny from the IRS, potentially resulting in audits or further enforcement actions.
- Delays in processing any future tax refunds may occur if your account remains flagged for non-compliance.
To avoid these outcomes, it is essential to address the notice immediately by filing the missing tax returns or providing documentation that explains why the returns were not required.
Pro Tip
Always keep copies of filed tax returns and correspondence with the IRS. These documents can serve as proof if you need to dispute a notice or clarify any errors.
Steps to take when you receive a CP299 Notice
If you receive a CP299 Notice, follow these steps to resolve the issue promptly:
- Review the notice carefully: Verify which tax periods and forms are mentioned, and ensure there are no mistakes in the IRS’s records.
- File the missing returns: If the tax returns were not filed, submit them as soon as possible, including any applicable payments to cover outstanding taxes, penalties, and interest.
- Provide an explanation if applicable: If you believe the notice was sent in error (e.g., you were not required to file for that period), provide documentation to the IRS explaining why the return was not filed.
- Contact the IRS if needed: If you need clarification or assistance, contact the IRS directly using the phone number listed on the notice. You may also seek help from a tax professional to ensure the matter is resolved correctly.
Understanding potential penalties and consequences
The IRS may impose penalties if you fail to file the required employment tax returns. Here are some potential consequences:
- Failure-to-file penalty: This penalty is assessed if you do not file the tax returns by the due date. The penalty is usually calculated as a percentage of the unpaid taxes for each month the return is late, up to a maximum limit.
- Failure-to-pay penalty: If there are unpaid taxes, an additional penalty may be imposed for failing to pay the owed amount by the due date.
- Interest on unpaid taxes: Interest accrues on any outstanding tax balance from the original due date of the return until it is paid in full.
- Potential legal action: In extreme cases, continued non-compliance may result in more severe actions, such as wage garnishment, tax liens, or even criminal charges.
To minimize these penalties, it is crucial to respond to the CP299 Notice and take corrective action as soon as possible.
Pro Tip
If you need more time to resolve the issue, consider requesting a short-term extension from the IRS. This can help you avoid immediate penalties while you gather necessary documents.
How to respond to the CP299 Notice
Steps to take when responding to a CP299 Notice
The most important step is to review the notice and identify the specific tax returns that need to be filed. The IRS will generally provide a deadline by which you need to respond. Here’s what you need to do:
1. File the missing employment tax returns for the periods specified in the notice. Be sure to include all necessary information and payments.
2. If you believe there was a mistake, gather evidence to support your claim. This could include proof that your business was exempt from filing during the period in question.
3. Contact the IRS to discuss any discrepancies or to seek clarification. The IRS may offer a payment plan or other arrangements to help you meet your obligations.
1. File the missing employment tax returns for the periods specified in the notice. Be sure to include all necessary information and payments.
2. If you believe there was a mistake, gather evidence to support your claim. This could include proof that your business was exempt from filing during the period in question.
3. Contact the IRS to discuss any discrepancies or to seek clarification. The IRS may offer a payment plan or other arrangements to help you meet your obligations.
Other ways to handle a CP299 Notice
In some cases, it may be beneficial to seek professional help from a tax advisor or certified public accountant (CPA). A professional can help you navigate the complexities of the IRS’s requirements and ensure that all documentation is submitted correctly. Additionally, you may consider applying for an IRS payment plan if the taxes owed are substantial, or if paying the entire amount at once would be difficult.
Further support options for addressing the CP299 Notice
If you’re unsure how to proceed, here are some additional resources to help resolve the issue:
- Consult a tax professional, such as a CPA or tax attorney, who can guide you through the process and communicate with the IRS on your behalf.
- Visit the IRS’s website for more information on employment tax requirements and compliance.
- Contact the IRS directly or visit a local IRS office if you need personal assistance.
- Explore the IRS’s online tools, such as the Online Payment Agreement application, if you need to set up a payment plan.
What happens if you ignore the CP299 Notice?
If you do not respond to the CP299 Notice, there can be serious consequences:
- The IRS may continue to assess penalties and interest on any unpaid taxes.
- Your business could be subjected to an audit or more intensive scrutiny by the IRS.
- Legal enforcement actions, such as tax liens or levies, may be taken to recover unpaid taxes.
Ignoring the notice will not make the problem go away; it will only increase the severity of potential consequences. Taking action promptly is the best way to resolve the issue.
Pro Tip
Consult with a tax professional if you receive multiple IRS notices. They can help identify any recurring issues and offer guidance on long-term solutions to prevent future problems.
Possible outcomes after responding to the CP299 Notice
Once you respond to the notice, here are the possible outcomes:
- If you file the missing returns and pay any outstanding taxes: The IRS will consider your account up-to-date, and penalties may be reduced or waived.
- If there was an error and you provide sufficient evidence: The IRS may update their records to reflect the correct filing status.
- If you set up a payment plan: You will be allowed to pay the taxes owed over time while avoiding further penalties.
The key to a positive outcome is responding promptly and ensuring all required actions are completed.
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
Why did I receive a CP299 Notice?
The CP299 Notice was sent because the IRS has not received one or more of your required employment tax returns. This could be due to a missed filing deadline, an error in the IRS’s records, or issues with previous submissions.
What should I do if I already filed the return mentioned in the notice?
If you have already filed the return in question, contact the IRS with proof of filing. This could include a certified mail receipt, an IRS e-file confirmation, or other relevant documentation.
Can I resolve the CP299 Notice online?
In some cases, you can resolve the issue online using the IRS’s secure portal, especially if you need to set up a payment agreement. However, you may still need to file the missing returns by mail or electronically.
What happens if I ignore the CP299 Notice?
Ignoring the notice may result in penalties, interest accrual, and possible legal actions such as tax liens or levies. It is crucial to address the notice promptly to avoid these consequences.
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 CP299 Notice is issued when the IRS does not receive a required employment tax return.
- It is important to file missing returns promptly to avoid penalties and further legal consequences.
- If you believe there was an error, contact the IRS with supporting documentation to resolve the issue.
- Ignoring the notice can lead to audits, tax liens, or other enforcement actions.
Share this post:
Table of Contents