IRS Notice CP 49- Overpaid Tax Applied to other Taxes You Owe
It may have been a day like any other, but the sudden IRS Notice CP 49 in the mail shattered your illusions and changed your life forever. You want to know why the IRS sent you the letter, what did you do to deserve this? We know you have questions about IRS Notice CP 49, so we’re answering them in this tax article. Unfortunately, the issues that IRS Notice CP 49 causes are not easy to fix.
What IRS Notice CP-49 Means
IRS Notice CP 49 means what the title implies, there was an overpayment on your account and now it’s being applied to another account. The form lets you know that you overpaid the IRS and all or part of the overpayment will be applied to other taxes you owe. In short, the IRS is letting you know that you were due a refund but those funds will not be sent to you and will be applied to you tax debt instead.ad.
What’s in The IRS Notice CP-49?
The notice will list the tax years of those taxes, the amounts being applied from the overpayment, and the balances remaining, if any. The notice will also show the amount remaining to be refunded to you if there are any funds left over. This notice will only apply for federal taxes owed, not state taxes.
IRS Reasons for Sending IRS Notice CP-49
The IRS sent out IRS Notice CP49 to kindly inform you that that you had a refund due because you overpaid your taxes for the year. It’s cruel that the IRS will simply take your refund automatically, but that’s the name of the game when you owe the IRS.
Understanding IRS Notice CP49 in three parts
IRS Notice CP-49 is divided into three sections which will be discussed in this paragraph. The first part of the notice deals directly with the overpaid account and tells you the total amount they applied to other taxes you owed. They will also let you know the amount refunded to you if any was remaining after it was applied to your tax debt. The third and final segment describes how the IRS will refund the overpayment of your tax debt if the overdue account was already repaid.
This section also lets you know the amount of the original account overpayment, any kind of credit/interested that accrued on the account, the total of the overpayment and the interest, and the final total with the balance due to the IRS.
The third and final part of the notice is about the balance due account and tells you the form number of the account with the balance due, the tax period of the account, the total amount of funds applied to the balance due account, and finally the amount that remains on the account with the balance due.
More Steps to Take with the IRS Notice CP-49
You may be one of the lucky few who had their tax debt paid in full by the tax refund, if you have no qualms with this you don’t need to take any actions from here. However, this is rarely the case when it comes to CP 49. You may be among those who do not agree with the information in IRS Notice CP-49. Check the following tips on what to do if you don’t agree with the information in IRS Notice CP49:
Overpayment Amount was Incorrect: You can call the IRS if you disagree with any part of IRS Notice CP-49. The IRS may send out IRS Notice CP 12 to further explain where the overpayment on your account came from.
Balance Was Already Paid in Full: Have a copy of your canceled check used to pay the IRS handy and give them a call. The IRS will perform a quick search to find proof that you repaid the tax debt and if they don’t find it, they may ask you to send a clear photocopy of your canceled check. If an amount is still due to the IRS, the IRS will make sure they do not send any more notices until they complete their research.
The Whole Tax Debt was Paid in Full Less than Six Weeks Ago: If you already repaid your tax debt in full less than six weeks ago contact the IRS and let them know the IRS Notice CP-49 was sent in error, if you don’t feel confident doing this on your own, contact a tax resolution professional for tips for professional help.
An Amended Return Changes the Balance Due: The next action steps to take from here are difficult, if you don’t feel confident working with the IRS on your own consider working with a professional.
Your Refund Didn’t Pay the Balance in Full: You should pay the amount remaining on the balance due account to limit penalty and interest charges. If you can’t pay the amount in full, the IRS will expect you to find a way to do so. It’s a good idea to at least consult with a professional tax company to resolve your tax problems in the way that suits your interests.
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