IRS CP06 Notice: Why Your Refund’s on Hold and How to Fix It
Summary:
The IRS CP06 Notice tells you that your tax return is being audited to verify the Premium Tax Credit (PTC) you claimed. During this audit, the IRS might hold part or all of your refund until they confirm the accuracy of your claim. You need to respond within 30 days of receiving the notice by providing all required documentation. If you don’t respond, the IRS could adjust your return and issue additional taxes, penalties, and interest.
Finding out that your tax refund is on hold because of an IRS CP06 Notice can be concerning. This notice means the IRS is auditing your tax return to verify the Premium Tax Credit (PTC) you claimed. They might have identified discrepancies between your reported details and the data they received from the Health Insurance Marketplace. As a result, they require you to submit additional documents to confirm your eligibility. Until the audit is completed, your refund will remain on hold. Knowing how to respond and what steps to take can help minimize delays and ensure your refund is processed smoothly.
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What is the IRS CP06 Notice and why did you receive it?
The IRS CP06 Notice is issued when your tax return is selected for an audit focused on verifying your Premium Tax Credit (PTC). This credit helps individuals and families afford health insurance bought through the Health Insurance Marketplace. The IRS audits these claims to ensure the PTC was accurately calculated and correctly claimed.
You might have received this notice for a few reasons:
- A discrepancy between the information on your tax return and data reported to the IRS by other sources, like the Health Insurance Marketplace.
- Your return may have been selected randomly as part of the IRS audit process.
- There could be issues related to advance payments of the Premium Tax Credit (APTC).
Receiving a CP06 Notice doesn’t mean you made an error, but the IRS needs to verify the accuracy of your claim. However, if you fail to respond on time, the IRS may make adjustments to your return, which could lead to additional taxes and penalties.
Pro Tip
Submit your documents electronically through the IRS’s Campus Correspondence Exam Document Upload Tool. This method is the fastest and most secure way to provide the necessary information for your CP06 Notice audit.
How the IRS CP06 Notice affects your tax return and refund
When you get an IRS CP06 Notice, the IRS is holding part or all of your refund while they review your Premium Tax Credit (PTC) claim. This review ensures you claimed the correct amount and reconciled it with any advance payments of the credit.
Your refund will not be released until the IRS receives the required documentation and finishes the audit. This could delay your refund, depending on how quickly you submit the requested information and how long it takes the IRS to process it. If you don’t provide the necessary documents, the IRS may disallow your claim, which could lead to additional tax liability and a smaller refund.
Pro Tip
If you need more time to gather your documents, don’t hesitate to call the IRS at the number provided on the notice. Requesting an extension can help prevent automatic adjustments to your return.
Steps to take when you receive an IRS CP06 Notice
After receiving the IRS CP06 Notice, it’s essential to act quickly and provide the IRS with the documentation they requested. Here’s how to respond:
1. Review the notice carefully
First, read the IRS CP06 Notice thoroughly to understand why your Premium Tax Credit claim is being audited. The notice will list the documents you need to provide and the deadline for submission (usually 30 days).
2. Gather the required documentation
You’ll need to provide specific documents to support your PTC claim. The notice may include a list of required forms, such as:
- Form 1095-A: This comes from the Health Insurance Marketplace and details your health coverage and any advance payments of the Premium Tax Credit (APTC).
- Form 8962: Use this to reconcile the advance payments with the PTC you’re eligible for based on your income.
Make sure to review and complete Form 8962 to ensure the accuracy of your calculations.
3. Submit the documentation
You can submit your documents to the IRS in one of the following ways:
- Upload them using the IRS’s Campus Correspondence Exam Document Upload Tool (Exam DUT).
- Fax your completed forms to the number listed in the notice.
- Mail copies of your documents to the address provided in the notice.
Make sure your documents are clear and complete to avoid delays. Don’t send original documents—only send copies.
4. Respond within the 30-day timeframe
You must respond within 30 days of the date on the IRS CP06 Notice. Failing to do so can result in the IRS making adjustments to your return, which could lead to additional taxes, penalties, and interest.
Consequences of not responding to the IRS CP06 Notice
If you don’t respond to the IRS CP06 Notice within the 30-day window, the IRS may issue a new audit report proposing changes to your tax return. These changes could include:
- Disallowing your Premium Tax Credit (PTC) claim.
- Imposing additional tax liability for the repayment of any advance payments of the PTC (APTC).
- Applying penalties and interest to any additional tax owed.
The IRS will send you a report outlining these changes, but you’ll miss the opportunity to provide supporting documentation. To avoid this, it’s essential to respond promptly.
Pro Tip
Ensure that your Form 1095-A from the Health Insurance Marketplace is accurate before filing. Errors in this form often trigger CP06 Notices, so reviewing it ahead of time can help avoid unnecessary audits.
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 to avoid future IRS audits related to Premium Tax Credits
To reduce the chances of receiving another IRS CP06 Notice, you need to ensure that your tax return is accurate, especially when claiming the Premium Tax Credit (PTC). Start by carefully reviewing your Form 1095-A, which is provided by the Health Insurance Marketplace, for any errors. Pay special attention to the amounts and personal details. Make sure the information on Form 1095-A matches what you report on Form 8962, which is used to reconcile any advance payments of the PTC. Discrepancies between these forms and your tax return can often trigger an audit.
Also, check that your reported income aligns with other documents, like W-2s or 1099s. Inconsistent information can raise red flags with the IRS. Filing your tax return electronically can also help reduce errors because the system is designed to catch common mistakes before submission. In addition, keep detailed records of your income and health insurance coverage. This way, if your return is questioned, you can quickly provide the necessary documentation to the IRS and resolve the issue.
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Frequently asked questions
Why did the IRS audit your Premium Tax Credit claim?
The IRS may audit your Premium Tax Credit (PTC) claim for several reasons. These include discrepancies between the information on your tax return and what the Health Insurance Marketplace reported. Additionally, your return could be selected randomly, through computerized screening, or due to inconsistencies in your reported income. Receiving a CP06 Notice doesn’t mean you did anything wrong, but it does mean the IRS needs more information to verify your PTC claim.
What happens if you ignore the IRS CP06 notice?
Ignoring the IRS CP06 Notice can lead to serious consequences. The IRS may disallow your Premium Tax Credit (PTC) claim and adjust your tax return. This could result in you owing additional taxes, facing penalties, and being charged interest. To avoid these outcomes, it’s essential to respond within the 30-day timeframe and provide the requested documentation promptly.
Can you still get your refund while under audit?
No, the IRS will hold part or all of your refund until the audit is completed and they have verified your Premium Tax Credit (PTC) claim. Once you submit the necessary documentation and the IRS approves it, they will release your refund. The faster you respond to the CP06 Notice, the sooner your refund can be processed.
How long will the IRS take to process your documents?
The time the IRS takes to process your documents depends on how quickly you respond and the volume of audits they are managing. Typically, it takes several weeks for the IRS to review your submission. If they require additional information, the process may take longer. Submitting your documents electronically can help speed up the process.
What if the IRS disagrees with your PTC claim after the audit?
If the IRS disagrees with your Premium Tax Credit (PTC) claim after reviewing your documents, they will send you a letter explaining the proposed changes to your tax return. You have the right to appeal the decision or provide more documents if you believe their findings are incorrect. If you don’t appeal or submit additional information, the IRS will adjust your return, which could result in additional taxes owed, penalties, or a smaller refund.
Get peace of mind with IRS letters and notices—visit our trusted guide for clear, expert advice.
| 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 IRS CP06 Notice is issued when the IRS audits your Premium Tax Credit (PTC) claim.
- Respond to the notice within 30 days by providing the requested documentation to avoid penalties and delays in your refund.
- Submit supporting documents using the IRS Document Upload Tool, by fax, or by mail, depending on the method specified in the notice.
- If you fail to respond, the IRS may disallow your PTC claim and adjust your tax return, resulting in additional taxes, penalties, and interest.
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