IRS CP19 Notice: How to Respond to Disallowed Deductions
Summary:
The IRS CP19 Notice tells taxpayers that the IRS has disallowed an item on their tax return, such as a deduction or credit, resulting in a balance due. This usually happens when the IRS reviews the return and finds that a claimed credit, like the Fuel Tax Credit, does not meet their rules. The notice explains what was disallowed, recalculates the tax owed, and gives instructions for responding within a deadline to avoid penalties and interest.
An IRS CP19 Notice means the IRS has changed your tax return due to a disallowed deduction or credit. This adjustment often results in a balance owed. The IRS sends this notice when they find an error in your return, either because a claimed credit was not valid or due to discrepancies in information from third parties like employers or banks. The notice outlines what was changed and requests payment. You should review it carefully, check if the adjustment is correct, and respond quickly to avoid penalties and interest charges.
Compare Tax Preparation Services
Compare multiple vetted providers. Discover your best option.
What is the IRS CP19 notice?
The IRS CP19 Notice, titled “Item Not Allowed, Balance Due,” is sent when the IRS disallows a credit or deduction on your tax return. It usually follows a review, where the IRS determines an item doesn’t meet eligibility requirements, leading to a balance due.
A common cause for a CP19 Notice is the disallowance of the Fuel Tax Credit, which is often claimed on IRS Form 4136. The IRS closely examines this credit due to fraudulent claims in recent years. Other reasons include incorrect deductions, calculation errors, or discrepancies in third-party reporting, such as income from employers or banks.
Pro Tip
Always keep detailed documentation for any credits or deductions you claim, especially for items like the Fuel Tax Credit. Having organized records will make it easier to dispute any disallowed credits in the event you receive a CP19 notice.
Common reasons for receiving an IRS CP19 notice
Several situations can trigger the IRS to send a CP19 Notice. First, the IRS might find discrepancies between your reported tax return information and the data from third parties, like employers or financial institutions. Second, you might have claimed a credit, such as the Fuel Tax Credit, but did not meet the eligibility rules. Third, the IRS might have sent a prior notice, such as CP18, informing you that part of your refund was withheld pending review. Finally, the IRS may adjust your return after completing their review, which could result in a balance due.
In many cases, receiving this notice means the IRS believes you made an error in claiming a deduction or credit. For example, if you claimed the Fuel Tax Credit without qualifying, the IRS will disallow it and adjust your tax owed.
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 IRS CP19 notice affect you?
Receiving an IRS CP19 Notice can affect you in several ways. First, if the IRS disallows a credit or deduction, your recalculated tax will result in a balance you must pay. Interest will start accruing on the unpaid amount the day after your tax was due. The IRS can also apply late payment penalties, increasing your liability.
Your refund may also be impacted. If the disallowed credit contributed to your refund, the IRS will reduce or eliminate it. In some cases, you may owe more, even if you were expecting a refund.
To avoid these negative outcomes, it’s important to respond to the IRS CP19 Notice within the 30-day deadline. Failing to do so could result in penalties and more interest accruing on your balance, worsening the situation.
Pro Tip
Respond to the IRS CP19 notice within the 30-day window, even if you need more time to gather documentation. You can request an extension or clarify your situation to avoid immediate penalties and interest accumulation.
Steps to take after receiving an IRS CP19 notice
Once you receive an IRS CP19 Notice, act quickly to resolve the issue and avoid complications. Follow these steps to handle the notice properly:
Review the notice carefully
The IRS CP19 Notice will explain what item was disallowed and how your tax return was adjusted. Review the notice thoroughly to understand the changes and identify which credit or deduction was disallowed.
Cross-check with your original tax return
Compare the IRS adjustments with your original tax return. This will help you determine whether the IRS’s decision to disallow the credit or deduction is accurate or if a mistake was made.
Decide if you agree or disagree with the changes
If you agree with the IRS’s adjustments, proceed with paying the balance due. The notice will outline your payment options, including installment plans if necessary. If you disagree, you can dispute the notice. In this case, consulting a tax professional is highly recommended. They can help you gather the necessary documentation to support your claim.
Gather supporting documentation
If you plan to dispute the IRS’s findings, gather all relevant documents that support your original tax return. This could include receipts, mileage logs, or third-party statements. Proper documentation can strengthen your case and support your claim.
Respond to the IRS promptly
Whether you agree or disagree with the notice, respond within the 30-day deadline. Failing to respond can result in penalties and more interest, making the situation harder to resolve.
Pro Tip
Consult a tax professional if you’re unsure about the changes in the CP19 notice. They can help ensure that your response is accurate, well-documented, and avoids triggering additional audits or tax issues.
Responding to an IRS CP19 notice: agree or dispute
If you agree with the IRS CP19 notice
After reviewing the IRS CP19 Notice and your tax return, if you agree with the IRS’s adjustments, the next step is to pay the balance due. The notice will include instructions on how to complete the payment.
Online payment: The IRS provides multiple options for paying online through their official website. You can use your bank account, or choose to pay by credit or debit card.
Payment plan: If paying the full amount immediately is not possible, you can set up an installment agreement. This option allows you to make monthly payments until the balance is cleared.
Make sure to follow the payment instructions closely to ensure that the IRS applies your payment correctly.
If you disagree with the IRS CP19 notice
If you do not agree with the adjustments in the IRS CP19 Notice, you must respond promptly to protect your rights as a taxpayer. Here’s how to handle the disagreement:
Consult a tax professional: Disputing an IRS notice can be complicated. It’s highly recommended to consult a certified tax professional who can help you gather necessary documentation and guide you through the process.
Provide supporting documentation: If you believe the IRS made an error, prepare and submit documentation that supports the original details on your tax return. For example, if the IRS disallowed the Fuel Tax Credit, provide fuel receipts, mileage logs, or any relevant records proving your eligibility.
Submit a written response: Follow the instructions in the IRS CP19 Notice carefully. Submit a written response along with the required documentation to validate your claim.
Follow up: After submitting your dispute, follow up with the IRS to confirm they have received your documents and are processing your case. Regular follow-ups can help you resolve the issue quickly and avoid delays.
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 is the main purpose of an IRS CP19 notice?
The IRS sends a CP19 notice to inform taxpayers that a claimed credit or deduction, such as the Fuel Tax Credit, has been disallowed. This results in a balance due as the IRS recalculates the tax owed based on these adjustments. It often happens due to errors in reporting or discrepancies with third-party data.
Can the IRS CP19 notice lead to penalties and interest?
Yes, penalties and interest can accrue if the balance is not paid promptly or if a timely response is not provided. Interest starts accruing the day after the tax was originally due, and the IRS may also apply late payment penalties. It’s crucial to respond or settle the amount within the 30-day deadline.
How does the IRS determine discrepancies that lead to the CP19 notice?
The IRS verifies tax return information using data from third-party sources, like employers and financial institutions. If a deduction or credit doesn’t align with the IRS’s data or is not allowed by tax laws, they will adjust the return and send a CP19 notice to inform the taxpayer of these changes.
What should be done if the IRS CP19 notice is incorrect?
If you disagree with the adjustments in the CP19 notice, respond with supporting documentation to prove the original tax return was correct. This may include receipts, logs, or other evidence. It’s wise to consult a tax professional before responding to ensure you take the best course of action and include all necessary documentation.
What happens if the IRS CP19 notice is ignored?
Ignoring the CP19 notice can lead to serious consequences, including additional penalties and interest on the balance. In some cases, the IRS may take collection actions such as wage garnishment or asset liens. To avoid these outcomes, respond to the notice within the 30-day window, either by paying the balance or disputing the adjustments.
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 IRS CP19 Notice is issued when a credit or deduction on your tax return is disallowed, leading to a balance due.
- Common reasons include inaccuracies in claiming credits like the Fuel Tax Credit or third-party data discrepancies.
- Respond to the IRS within 30 days to avoid additional penalties and interest accrual.
- If you agree with the notice, make the payment or set up a payment plan; if you disagree, consult a tax professional and gather supporting documentation.
Share this post:
Table of Contents