IRS 12C Letter: More Info Needed to Process Tax Return

IRS 12C Letter: More Info Needed to Process Tax Return

If you submit an incomplete tax return, you may receive an IRS 12C letter. This notice identifies the specific issues with your return and the additional information and documents that the IRS needs to process it.

We will review what to do when you receive letter 12C, what missing info the IRS often needs, and how it impacts audits and refunds.

What Is IRS Letter 12C?

Letter 12C is an IRS notice sent to inform a taxpayer that additional information is needed to process a tax return. It includes the reasons your return cannot be processed and instructions for what to submit for the IRS to be able to finish processing your return.

What Missing Info Does the IRS Need to Process My Tax Return?

The missing information that the IRS needs to process your tax return includes:

  • Damaged, missing, or illegible tax forms and schedules need to be resubmitted. Forms must be originals with signatures.
  • Missing Social Security Numbers (SSN) or Taxpayer Identification Numbers (TIN) must be filled in on your return.
  • Income, withholding, and credits need to be verified.
  • Advance payments for the Premium Tax Credit (PTC) have to be reconciled.

Do I Need to Submit a 1040-X Amended Return If I Received IRS 12C?

No. Do not submit Form 1040-X to amend a return when you receive IRS letter 12C. The IRS will process your original return once you provide the missing information.

How Should I Respond to IRS Letter 12C?

First, review each of the reasons in your 12C for why the IRS was unable to process your return.

Then, follow the 12C instructions and respond to your letter as follows:

  • If you agree that your return is missing information, simply send this information and supporting documents to the IRS. Include a copy of your 12C letter. You can either mail or fax your response to the address or fax number at the top of the letter.
  • If you disagree that your return is missing information, you will need to send the IRS a letter explaining why you believe this information was already provided or is not needed. Include any documents that support why you disagree.

What’s the Deadline for Responding to IRS 12C?

Whether you agree or disagree with your 12C letter, you need to respond to the IRS within 20 days of your notice date. If the IRS does not receive a response from you, they will adjust your return and the changes may increase how much tax you owe or reduce your refund amount.

If I Don’t Reply to Letter 12C, Will the IRS Adjust My Return?

Yes. As mentioned above, the IRS will adjust your tax return based on available information if you do not respond to letter 12C to update your return. IRS adjustments change your tax liability, including refunds or back taxes owed.

Even if you believe the reasons the IRS cannot process your return are incorrect, you still need to respond to the IRS to support why you believe they are wrong.

Does a 12C Letter Trigger an IRS Audit?

A 12C letter alone does not trigger an audit. It is simply to notify you that you filed a tax return with missing forms and/or tax information. All you need to do is send the requested forms, schedules, and other information.

Will Receiving Letter 12C Impact Whether I Get a Refund or Owe the IRS?

Whether IRS letter 12C impacts your refund or taxes you owe depends on the IRS review of your response and the missing information. If the IRS confirms your tax return is accurate and complete, and you are owed a refund based on your original filing, the IRS will send your full refund.

However, if the IRS needs to adjust your return and the changes increase your tax liability, you will either receive a smaller refund amount or owe the IRS money depending how big the change is.

Tax matters are often complicated. If you have received letter 12C from the IRS and you are unsure how to respond, review this notice with a tax professional who can help you pull together the missing tax information you need to file.

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