CP21C Notice: Changes to Your Tax Return – Balance Due

What is a CP21C Notice: Changes to Your Tax Return – Balance Due?

A CP21C notice is a communication from the IRS informing you that they’ve made changes to your tax return, resulting in a new balance due. These changes often stem from mathematical errors, corrections to income or deductions, or discrepancies in information provided. The notice will explain the changes and tell you how much you now owe, including any penalties or interest.

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Related Concepts and Terms

Understanding the CP21C notice is easier when you know some related concepts:

  • Tax Return: The form you file with the IRS to report your income, deductions, and credits, and to calculate your tax liability.
  • Deductions: Expenses that can be subtracted from your gross income, reducing your taxable income.
  • Credits: Direct reductions in your tax liability (more valuable than deductions).
  • Balance Due: The amount of tax you still owe after applying credits and withholding.
  • Tax Audit: A more thorough examination of your tax return by the IRS. (A CP21C notice is NOT an audit.)
  • Tax Lien: A legal claim against your property for unpaid taxes.
  • Interest: A fee the IRS charges on unpaid tax balances.
  • Penalties: Charges for errors like failing to file or pay on time.
  • IRS Notice: An official communication from the IRS.
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Letter 3127C

IRS Letter 3127C is a notice regarding changes made to your tax return, often after the IRS has reviewed it. It's important to understand what this letter means and how to respond correctly.
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