CP87A Notice: What It Means and How to Resolve It

Last updated 11/01/2024 by

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Summary:

The CP87A Notice is issued by the IRS when it detects discrepancies in a taxpayer’s return or finds potential mismatches with third-party information. This notice highlights concerns regarding the accuracy of the return, especially related to income, credits, or deductions. Taxpayers receiving the CP87A must verify the information, correct errors, and respond promptly to avoid penalties, interest, or delays in processing their returns.

Receiving a CP87A Notice from the IRS can cause concern, but it’s important to understand what it means and how to respond appropriately. The CP87A Notice is typically sent when the IRS detects potential inconsistencies between the information you reported on your tax return and what they’ve received from third parties, such as your employer or financial institutions. The IRS sends this notice to give you a chance to correct any errors or clarify discrepancies before more serious action is taken. In this article, we’ll walk you through the steps to take if you receive a CP87A Notice, how it affects your taxes, and how to avoid future issues.

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What is the CP87A Notice?

The IRS issues a CP87A Notice to alert taxpayers about inconsistencies between the income, deductions, or credits reported on their tax return and the information the IRS has on file from other sources. These sources include employers, financial institutions, and other entities that report income and payments to the IRS. The notice is part of the IRS’s effort to ensure accurate tax reporting and to identify any potential errors or omissions in the taxpayer’s return.

A CP87A Notice could be triggered by a variety of factors, such as:

Mismatched income reported by an employer or financial institution
Unreported income, such as investment earnings or side gig payments
Incorrect tax credits or deductions claimed
Clerical errors or misreporting on the return

Upon receiving a CP87A Notice, taxpayers are required to verify the details of their tax return, identify any errors, and take the necessary steps to correct them if needed.

How the CP87A Notice affects you

When you receive a CP87A Notice, it means that the IRS has flagged potential discrepancies in your tax return that need clarification. While this notice does not indicate an immediate penalty or fine, it is a critical warning that you need to address quickly to avoid future complications.

Here’s how it can impact you:

If the discrepancies are confirmed and left uncorrected, the IRS could adjust your tax return, resulting in a higher tax liability.
Unaddressed issues may lead to penalties or interest charges on unpaid taxes.
Delays in processing your return could result, meaning refunds may be withheld until the issue is resolved.

Acting promptly by reviewing your tax return, comparing it to the CP87A Notice, and responding to the IRS with any required corrections or explanations will help mitigate these impacts.

Pro tip

Always double-check your tax return before submitting to the IRS, especially the income reported from employers or financial institutions. Small errors can trigger notices like CP87A and cause delays in processing.

What should you do when you receive a CP87A Notice?

Receiving a CP87A Notice means it’s time to take a close look at your tax return and the information the IRS has flagged. Here’s a step-by-step guide on how to handle the situation:

Review the notice carefully: Start by thoroughly reading the CP87A Notice to understand what the IRS believes may be incorrect. Pay close attention to the specific areas of concern, such as income discrepancies, incorrect deductions, or unreported credits.
Gather your records: Once you identify the issues mentioned in the notice, gather all relevant documentation, including W-2 forms, 1099 forms, receipts for deductions, and other financial records. Compare this information with the data on your tax return to identify any errors.
Correct errors: If you find that there was an error on your tax return, you’ll need to file an amended return (Form 1040X) to correct the mistake. Make sure to provide any necessary supporting documentation to substantiate your corrections.
Contact the IRS if needed: If you believe the information in the CP87A Notice is incorrect or if you need clarification, contact the IRS using the phone number provided on the notice. Be ready with your tax records and any additional information to discuss the issue.
Respond in a timely manner: It’s crucial to respond by the deadline indicated in the CP87A Notice to avoid further action from the IRS, such as penalties or delays in processing your return.

Pro tip

If you receive a CP87A Notice, respond promptly to avoid penalties or additional interest. Filing an amended return with accurate information can prevent further IRS actions.

How to respond to the CP87A Notice

Steps to take when responding to a CP87A Notice

Responding to a CP87A Notice promptly and accurately can help resolve the issue without major consequences. Here are the main steps to follow:

1. Understand the IRS’s concerns: The notice will detail the specific areas where the IRS has found discrepancies. Review these areas and identify whether the discrepancy is due to missing information, incorrect amounts, or another issue.
2. File an amended return if necessary: If you determine that your original return contained errors, file an amended return using Form 1040X. Attach any required documentation to support your corrections.
3. Provide supporting documentation: Along with your amended return, include copies of W-2s, 1099s, or other relevant forms that verify your income, credits, and deductions.
4. Send a written explanation: If you disagree with the IRS’s findings, write a detailed explanation of why you believe the information on your original return is accurate. Be sure to include supporting documentation to back up your claims.

Other ways to handle a CP87A Notice

If you believe there has been a mistake on the part of the IRS, or if you suspect identity theft might be involved, there are additional steps you can take:

– Identity Protection PIN (IP PIN): If you think identity theft is the cause of the discrepancy, you may want to enroll in the IRS’s Identity Protection PIN (IP PIN) program. This PIN adds an extra layer of security to your tax filings and helps prevent fraudulent returns.
– Consult with a tax professional: If the notice is complicated or if you’re unsure how to proceed, consider seeking advice from a tax professional, such as a CPA or tax attorney, who can help you navigate the issue and communicate with the IRS on your behalf.
– Call the IRS directly: In some cases, a phone call to the IRS can clarify the situation. Use the contact information provided on the notice and be prepared to discuss the specifics of your return.

Further support options for addressing the CP87A Notice

If you’re struggling to resolve the issues outlined in your CP87A Notice, there are several resources that can help you:

Tax professionals: Consulting a certified tax professional can be extremely helpful in navigating the process of responding to the CP87A Notice and avoiding potential penalties or further errors.
IRS resources: The IRS website offers a wealth of information on tax notices and how to handle them. Additionally, the IRS phone support can assist in resolving complex issues.
Taxpayer Advocate Service (TAS): If you’re unable to resolve your issue with the IRS directly, the TAS is an independent organization that provides free assistance to taxpayers facing hardships related to tax issues.

Pro tip

Consider working with a tax professional if you’re unsure how to handle discrepancies flagged by the IRS. A CPA or tax attorney can help resolve the issue quickly and avoid costly mistakes.

Potential penalties or next steps if you don’t respond

Failing to respond to a CP87A Notice can have serious consequences. If the discrepancies outlined in the notice remain unaddressed, the IRS may take the following actions:

Your tax return may be adjusted, leading to a higher tax bill.
Penalties and interest may accrue on any additional taxes owed.
Refunds may be delayed or withheld until the issue is resolved.
The IRS may take enforcement actions, such as wage garnishments or liens, if the tax liability goes unpaid.

To avoid these penalties, it’s essential to respond to the CP87A Notice promptly and follow the instructions carefully.

What potential outcomes are possible?

Once you respond to the CP87A Notice, the outcome will depend on how the IRS assesses your response and whether the discrepancies are resolved:

Discrepancies corrected: If you file an amended return or provide sufficient documentation, the IRS will update your records, and your tax return will proceed as normal.
IRS adjusts your return: If the IRS finds that the discrepancies were legitimate, they may adjust your return, which could result in a higher tax bill.
Identity theft investigation: If the issue is related to identity theft, the IRS may take additional steps to protect your account and ensure future filings are secure.

Taking swift action will help minimize disruptions to your tax filings and ensure your return is processed without delay.

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Frequently asked questions

Why did I receive a CP87A Notice?

You received this notice because the IRS detected discrepancies between your tax return and the information they received from third parties. This can occur if there is a mismatch in income reporting, deductions, or tax credits.

How do I correct my tax return?

If you find errors on your tax return, you should file an amended return using Form 1040X and provide any supporting documentation. Be sure to include a written explanation if you disagree with the IRS’s findings.

What happens if I ignore the CP87A Notice?

Ignoring the CP87A Notice can lead to penalties, interest on any additional taxes owed, and delays in processing your return or receiving a refund. In some cases, the IRS may take enforcement actions.

Can I resolve the issue online?

In some cases, you may be able to resolve discrepancies through the IRS’s online portal. However, for complex issues or identity verification, you may need to submit documents by mail or contact the IRS directly.

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 CP87A Notice is issued when the IRS detects discrepancies between your tax return and third-party information.
Respond promptly by reviewing your return, gathering documentation, and correcting errors to avoid penalties or delays.
Filing an amended return (Form 1040X) is necessary if you discover errors on your original tax return.
Ignoring the notice can result in penalties, interest, and enforcement actions by the IRS.

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