CP49 Notice: Your Refund Was Applied to an Outstanding Balance

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If you received a CP49 Notice from the IRS, it means they’re keeping the refund you claimed on your tax return to pay an outstanding balance from a different year.

How to Verify a CP49 Notice

You will only receive a CP49 Notice if you owe the IRS money. In most cases, you should know that you do.

Your notice will look like this example on the IRS website. You can also go to irs.gov and look up the phone number to call. Never call the phone number on a notice you aren’t sure about, because if it’s a fake, the number will go to the scammers.

What to Do if You Owed the IRS Money

If you owed the IRS money, there’s not much you can do. The IRS will keep your refund in virtually all situations.

You should also request a tax transcript or check your account online to see if you still owe money. If you do, it’s in your best interests to make payment arrangements with the IRS for the remaining balance. Interest and penalties will keep accruing if you wait for them to take your refund in future years.

How to Stop the IRS From Taking Your Refund

The only way to stop the IRS from taking your refund is to avoid having one. You will need to adjust your withholding or estimated tax payments early in the year to ensure that you will owe a small balance when it’s time to file your return.

What to Do if You Didn’t Owe the IRS Money

If you didn’t owe the IRS money, you should immediately call them, request your account transcript, or view your account online to see what year they say you owed for. Potential reasons for an unexpected CP49 Notice include:

  • IRS errors.
  • The notice is a fake.
  • Someone filed a fraudulent tax return under your information.
  • You never received previous notices or letters from the IRS telling you that you owed additional tax.

Your options will vary based on what caused the CP49. You don’t fight the CP49 directly but instead have to challenge whatever caused the tax debt. To get help, schedule a consultation with an Enrolled Agent or other tax professional.

Need personal help? Click here for additional free resources or to find an accountant, attorney, or other professional near youRemember: This blog post and the comments provide generalized information that may be out of date or inaccurate for your situation. Always schedule a personal consultation with an appropriate licensed professional in your area before taking action. For full terms of use, click here.

Have general questions about this post or want to learn more about a related topic? Please leave a comment at the bottom of the page. Comments are public, and I can’t provide individual advice, but it helps me make the posts more useful for the future. Please do not post personal information. If you need personal assistance, please contact the relevant government agency or hire an appropriate professional near you.

3 Comments on "CP49 Notice: Your Refund Was Applied to an Outstanding Balance"

  1. irs is willingto work with unpaid taxs that are in arrears. community work shops have classes online that aRE available to those who are serious about helping themselves getting out of debt.

  2. They took part of my refund but they still owe me so how do a check when I might be getting the reduce amount that they owe me.

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