The IRS issues letter CP11, formally known as the Notice of Changes to Your Tax Return – Balance Due, when it identifies an error on a taxpayer’s filed return. This letter informs the taxpayer that the IRS has corrected the error and that, as a result, there is now a balance due. The CP11 is not a generic correspondence—it is an official notice that carries financial and procedural consequences, requiring timely review and action.
What is Letter CP11?
The CP11 notice serves to inform the taxpayer of changes the IRS made to their return and the resulting additional tax owed. It typically includes:
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- A description of the changes made.
- The revised balance due, which may include tax, interest, and penalties.
- The reason(s) for the correction.
- A deadline for responding or making payment.
The IRS sends a CP11 when it detects a discrepancy—either through its automated error-checking system or through a mismatch with third-party information reported to the agency.
Common Reasons for Receiving Letter CP11
The most frequent causes include:
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- Mathematical or calculation errors on the return.
- Incorrectly claimed credits or deductions, such as the Earned Income Tax Credit or Child Tax Credit.
- Omitted or unreported income that the IRS has on file from Forms W-2, 1099, or other information statements.
- Mismatched taxpayer identification information, such as incorrect Social Security numbers.
These discrepancies can be detected without a full audit, often through the IRS’s automated systems.
Timeframe to Respond
Letter CP11 provides taxpayers with 60 days from the date of the notice to respond. Within this period, the taxpayer can either:
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- Agree and pay – Submit payment in full to avoid additional interest and penalties. If unable to pay, request an installment agreement or alternative payment plan.
- Disagree and dispute – Contact the IRS as instructed in the notice, either by phone or in writing, to present supporting documentation and request a reversal of the changes.
Failure to respond within the 60-day period generally finalizes the IRS’s assessment, and the balance becomes collectible through enforcement actions.
Consequences of Inaction
If the taxpayer does not respond or pay within the prescribed time:
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- Additional interest will accrue on the unpaid balance.
- Penalties for late payment may be applied.
- The IRS may initiate collection actions, including federal tax liens, wage garnishments, or bank levies.
The CP11 thus represents both a notice of change and a warning that legal collection measures can follow.
Legal and Financial Significance
Receiving Letter CP11 is an indication that the IRS has already made adjustments to a filed return. These adjustments are enforceable unless the taxpayer timely disputes them. Ignoring the letter can result in escalating liabilities and the loss of procedural rights to challenge the IRS’s position.
From a compliance standpoint, Letter CP11 emphasizes the importance of accuracy in tax reporting. Even unintentional errors can result in significant financial consequences once interest and penalties are added.
We Can Help!
At JH Tax Law, we can ensure a correct and strategic resolution by helping you evaluate the IRS’s adjustments, verify their accuracy, and assist in disputing incorrect changes.
If you have received Letter CP11, contact our office for a confidential consultation today.