IRS Notice CP05

IRS Notice CP05 means that your tax refund is on hold until the IRS can review your tax return. Here’s what you can do to move things along.

This post is provided for general information only. Please confirm the details and circumstances of your unique situation with your tax accountant or other appropriate advisor before taking action.

Did I do something wrong?

Getting a CP05 Notice doesn’t automatically mean that you did something wrong or won’t get your full tax refund. The IRS runs automatic checks on all tax returns before sending out refunds, and sometimes things take longer than usual.

The IRS may just be waiting to get information from your employer or someone else who paid you during the year.

Of course, the IRS wouldn’t be checking tax returns unless there was a chance they could make changes or do a full tax audit. However, even a tax audit doesn’t mean you were wrong — sometimes, the IRS just needs you to send more information to confirm you filed correctly.

What do I do with a CP05 notice?

Notice CP05 generally says that the IRS needs more time to review your tax return but doesn’t ask you to take any action. The IRS will either issue your tax return or contact you again.

One step you might want to take is to check your online IRS account. A common reason for getting a CP05 letter from the IRS is your employer never sent the IRS a copy of your W-2 or 1099.

Your initial CP05 notice won’t tell you the specific reason the IRS is holding your tax refund, but if you can’t find a W-2 or 1099 on your tax transcript, that’s often the reason. Contacting whoever was supposed to issue that tax form and asking them to send it to the IRS ASAP can help you get your tax refund faster.

Other than that, it’s usually just a waiting game. Calling the IRS generally won’t help because if they haven’t contacted you yet, they haven’t gotten to your tax return yet. Calling won’t help you jump the line.

What happens after you get a CP05 notice?

There are several things that can happen after your CP05 notice.

  • The IRS approves your refund and sends it to your bank account

  • The IRS reduces your refund and sends you a notice explaining why

  • The IRS sends you a CP05A notice or CP05B notice asking for additional information

What do you do with Notice CP05A or Notice CP05B?

Notice CP05A and Notice CP05B ask you for specific supporting information. Normally, it’s to verify your income or income tax withholding.

At this point, the IRS probably thinks you made a mistake on your tax return and may not be eligible for the tax credits or other benefits you claimed. There’s also a chance your employer incorrectly reported your income or income tax withholding (or never filed anything with the IRS at all).

The IRS will ask you for specific information like paystubs, proof of business income, or other proof of employment. The IRS will use this information to confirm or change your tax refund.

If you don’t respond to the IRS notice, the IRS will either hold your refund indefinitely or send you an adjusted refund based on the information the IRS has. There’s a good chance the adjusted refund amount will be lower than what you’re entitled to if you give the IRS the information it needs.

Is my tax preparer responsible for my getting a CP05 notice?

Getting a CP05 notice could be because of a mistake your tax preparer made or something else entirely.

A tax professional will usually offer a guarantee if they make a mistake based on the information you provided. Tax professionals usually aren’t responsible if you left out information or the issue is caused by something else like your employer not filing W-2s with the IRS on time.

If your tax preparer offers an audit defense service, handling your CP05 notice will usually fall under that service no matter what caused it.

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