An IRS Letter CP22E notifies a taxpayer of additional taxes owed due to an audit of the tax return or if the IRS completed a return for you for a prior year. The audit letter will specify the amount owed, the penalty charged, and the interest that is due as well as the form that was amended and the tax year. The letter will be accompanied by an audit report detailing the changes that were made to the return. If you receive one of these letters, you will be given a due date for the balance.
There are steps that you need to take if you receive one of these notices:
Read the letter and report carefully. If you do not understand the reasons for the adjustment, it is wise to call the IRS at the number listed on your letter or to consult with a tax professional. While resources are available on the IRS website that can help you understand the action taken, each situation is unique and may not be adequately addressed. The IRS expects the amount owed to be paid by the due date.
If you have no issue with the changes, correct your copy of the tax return and pay the amount due. The letter will include a payment coupon that you would send in with your payment. This aids in tracking your payment and ensuring it is correctly applied. If you do not dispute the actions taken by the IRS but cannot pay the amount due in full, payment arrangements can often be made and, depending on your situation, penalties might be waived. Ignoring the notice will only incur more penalties and interest on your account. The IRS website has tax payment options and forms available.
If you do not agree with the decision that the IRS made, it is important to contact them in a timely manner. If you dispute the changes, the IRS requires that you follow certain procedures to dispute or appeal the findings:
An audit reconsideration is used when you have information that was not used in determining your liability, if you filed a return after the date that the IRS completed one for you, or if you feel there was an error when computing your liability. This informal process can resolve many disputes within the audit process. This process can be used if you have not paid the liability. The steps outlined for using the audit reconsideration is discussed in Publication 3598.
An amended return using Form 1040x, Amended Individual US Tax Return will give you a formal claim on a balance you have paid and you have information to provide the IRS. File an appeal with the Appeals Office. Use this option if you do not agree with the action taken by the IRS and there is no new evidence or information. The appeals process is discussed in Publication 5, Your Appeal Rights and How To Prepare a Protest If You Don’t Agree. If you are the spouse that is affected by the audit results and you had no knowledge of your spouse’s actions, you may qualify for Innocent Spouse Relief. You must file Form 8857to request the relief.
The IRS CPE22 letter is the result of an audit the IRS did on your return. While it is not a welcome sight, taking proper and timely action is important to settle your debt or differences. Visit www.IRS.gov for more information.