CP 161 Frequently Asked questions (FAQs)
Why did I receive this notice?
The first thing you should know about Notice CP 161 is that it isn't a math error notice. It just shows you the amount of underpaid tax according to our records. The middle section of the notice shows the tax you reported on the return, the credits we applied, and the underpayment.
What do I need to do?
Check the list of payments we applied to your account. Many times, a misapplied payment is the reason for the balance due. If that's the case, or if the amount of your payment differs from the one we show, you'll need to give us information about the payment so we can look for it. Once we find the payment and apply it, we'll remove or reduce any penalties and interest caused by the underpayment.
If the payments shown in your records agree with the amounts listed on CP 161, you should pay the total amount due by the date shown on the notice. If you don't pay the amount due by that date, we'll have to charge additional penalties and interest. If you can't pay the amount due, you may be able to request an installment agreement that allows you to pay what you owe in smaller, more manageable amounts.
I don't agree with the notice. Should I call or mail my response?
The action you take to resolve the account depends on the reason for the underpayment. In most cases, though, you can call us at the number printed at the top of the notice to resolve the account. The following paragraphs describe some of the more common reasons for disagreeing with the notice.
If you received the notice because of a missing payment, call us at the number printed at the top of the notice and have your canceled check handy. Tell us the amount of the missing payment and we'll see if we can find it while you wait. If we can't find the payment right away, we may ask you to read the encoding information that's printed on the back of most checks. We'll record the information and suspend any collection activity while we look for it. If we still can't find the payment, we'll send you a letter asking for a clear photocopy of both sides of the canceled check.
If you received the notice because the money amount of your payment doesn't agree with amount shown on the notice, send us a photocopy of both sides of the canceled check along with a copy of your bank statement showing the amount that was deducted from your account. This may take more time than finding a missing payment, but we'll suspend all collection activity until it's resolved.
If you received the notice because we haven't processed your amended return showing a tax decrease, call us to see if we processed the return after we issued the notice.
If the notice shows a total tax amount that's different from the tax you reported, call us and let us know. Pre-printed name and address labels contain a code showing the tax period for the return. For example, MAR2000 is for the tax period ended March 31, 2000. If you used a photocopy of a return you previously filed, we may have processed it to the wrong account. Due to the volume of returns we process, though, we occasionally "hit the wrong key" and process the return with a wrong tax period.
If you received this notice after you paid the amount you owe, give us a call to make sure we received it.
Is there anything else I should know about this notice?
We're glad you asked that question. Most of the time, the issues that resulted in the CP 161 can be resolved quickly and with minimal inconvenience to you. The most important thing to remember about the CP 161 is that we need a response from you as soon as possible so we can settle your account.
