Background

The IRS uses CP49 (and related correspondence) to tell taxpayers why a refund hasn’t been issued or was reduced. Over the past decade the agency has automated many notices to improve transparency; however, that automation can still confuse taxpayers when the notice is brief or uses tax-office terminology. In my experience working with clients, the CP49 often arrives because the return triggered a verification step or because the refund was applied to an outstanding debt.

How CP49 notices work

  • Trigger: A return can trigger a CP49 for several reasons — math-error adjustments, missing schedules or forms, identity/credit verification (for credits like the Earned Income Tax Credit), or because the refund was offset to satisfy a past-due obligation.
  • Message: The CP49 letter identifies the reason (or a general delay) and tells you whether the IRS needs more information or has already adjusted or applied your refund.
  • Timeline: If the IRS requests documents, response and review commonly take several weeks; when you provide the requested information promptly, many cases resolve in 6–8 weeks, but complex issues or offsets can take longer (timelines vary).

Real-world examples

  • Math/Documentation: A sole proprietor had a CP49 after the IRS questioned a large Schedule C deduction. Providing invoices and bank records to the IRS resolved the delay.
  • Offset to Debt: Another client’s refund was reduced without further IRS action because the Treasury Offset Program applied part of the refund to a past-due federal loan. The CP49 explained the adjustment and pointed to the offset reason.

Who can receive a CP49

Any taxpayer expecting a refund — individuals, contractors, and small businesses — can receive a CP49. It’s especially common for returns with:

  • Complex schedules (self-employment, rental, business expenses)
  • Large or unusual credits (EITC, Additional Child Tax Credit)
  • Prior unpaid federal liabilities, child support, or defaulted federal student loans (which can trigger offset under the Treasury Offset Program).

Practical steps to resolve a CP49 (recommended, in order)

  1. Read the notice carefully and note deadlines. The CP49 tells you the reason and next steps.
  2. Don’t ignore it. If the IRS requests documents, gather and send copies (not originals) of the requested records. Include a copy of the CP49 and your taxpayer information (name, SSN, tax year).
  3. Follow the instructions exactly — use the address or secure portal listed on the notice. If a phone number is provided, use it after you’ve reviewed the letter and your records.
  4. Keep records of everything you send and how you sent it (certified mail or proof of delivery is helpful).
  5. If the refund was offset, identify the creditor: the CP49 usually states the offset reason. For government offsets, the Treasury Offset Program (TOP) explains agencies that receive funds (see Treasury TOP). For non-tax offsets, contact the agency listed on the notice to dispute or request a review.
  6. Escalate to a tax professional when the notice involves large amounts, unclear reasons, or potential identity/theft flags.

What to include when you respond

  • A copy of the CP49
  • Two forms of taxpayer identification (name and SSN/ITIN)
  • Clear copies of the documents the IRS requested (receipts, forms, schedules)
  • A short cover letter explaining what you’re sending and how it addresses the IRS’s request

Common mistakes and misconceptions

  • Waiting: Many taxpayers assume the IRS will resolve the issue without action; delays lengthen when taxpayers do nothing.
  • Sending originals: Don’t send original documents unless the IRS specifically asks — send legible copies and keep originals.
  • Calling too early: Call only if the notice instructs you; premature calls can slow processing if you haven’t reviewed your records.

When a refund was offset

If your CP49 shows an offset, the letter should say which program or creditor received funds. Common programs include unpaid federal taxes, child support (state agencies), or defaulted federal student loans. For federal offsets, the Treasury Offset Program is the central mechanism — see Treasury’s TOP site and the IRS offset guidance for next steps (Treasury TOP; IRS.gov).

When to get professional help

Engage a certified tax professional if the amount is large, the reason is unclear, you suspect identity theft, or the IRS requests documentation you don’t have. A practitioner can prepare a focused response, help prioritize records, and, when appropriate, contact the IRS on your behalf.

Relevant FinHelp resources

Authoritative sources

Frequently asked questions (brief)

  • How long will a CP49 delay my refund? Often several weeks after you respond; complex or offset cases can take longer.
  • Should I call the IRS immediately? Only call if the notice directs you to or if you need clarification after reviewing it.

Professional disclaimer

This article is educational and not personalized tax advice. For specific guidance about your CP49 or tax situation, consult a qualified tax professional or contact the IRS directly.

(Author: Senior Financial Content Editor, FinHelp.io; includes practitioner insight based on client work.)