IRS Tax Problems

What is an IRS CP05 Series Notice?

What is an IRS CP05 Series Notice?

Now that tax season is over the wave of common IRS notices starts to arrive. One of the most frustrating is the CP05 series.

So what does it mean?

The IRS has flagged your return and needs to verify reported income and credits before your tax refund is released. The IRS flag can be a random occurrence, a discrepancy in Forms like your W-2 or 1099, or a computer-generated flag.

This refund hold usually is around 60 days, but reports from taxpayers indicate this can be longer.

The IRS reviews issues such as:

  • Your income total reported on your return
  • The withholding amount reported on your return
  • Any claims for tax credits on your return
  • Any withholding claimed from your social security benefits
  • Reports of household help
  • Any Schedule C income 

Your next steps

Unfortunately, you are on the IRS timeline as they verify the information you provided on your return. This may include information provided by third parties that you reported. If it takes longer than 45 days from the date of your IRS CP05 notice, you can contact the phone number on your IRS notice.

If you worked with a tax professional, you might have to review the notice to see if an error was made in the input. If you are going through an economic hardship, you can also reach out to the Taxpayer Advocate Service (TAS) at 1-877-777-4778.

 If there was an error in tax preparation, it might be time to reach out for a trusted tax professional to help avoid such delays.  A CP05 notice sometimes leads to a full-blown audit. If there are severe red flags, it might make sense to hire a licensed tax professional to communicate with the IRS on your behalf.

Gordon W. McNamee, CPA writes for TaxBuzz, a tax news and advice website. Reach him and his team at [email protected].

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Gordon W. McNamee

Gordon W. McNamee

Gordon W. McNamee is a Certified Public Accountant (CPA) based in Rancho Cucamonga, CA. Gordon W. McNamee can assist you with your tax return preparation, payroll, accounting and tax planning needs. <br /> <br /> 2021 is Gordon W. McNamee, CPAs 38th year in the profession. As as a former IRS agent (1984 through 1987), Gordon has been in public accounting since 1987. Gordon specializes in individual, corporate, HOA, trust, estate and payroll taxes. He also prepares financial statements and provides accounting & bookkeeping services. He enjoys making his clients feel at ease while providing a personalized professional service.

GORDON W. MCNAMEE, CPA
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