CP49 Notice From IRS: Refund Applied to Back Taxes or Debts

CP49 Notice From IRS: Refund Applied to Back Taxes or Debts

When the IRS uses some or all of your tax refund to pay back taxes from a previous year, leaving you with a lower refund amount than you expected, you will receive a CP49 notice. Receiving IRS notice CP49 when you are expecting a big refund can be unsettling — especially if you had big plans for how to spend that tax refund money.

If you believe the IRS made an error, a tax professional can help you make sense of what the IRS has done and dispute the loss of your tax refund.

Here are the answers to frequently asked questions about IRS notice CP49.

Why Did I Receive a CP49 Notice From the IRS?

You received a CP49 notice because the IRS seized your tax refund to apply to back taxes. The IRS sends a CP49 in advance of your refund payment as a heads-up that you will be receiving less money than you were expecting, or perhaps no refund at all.

Does My CP49 Notice Specify What Debts the IRS Offset with My Tax Refund?

Your CP49 notice lists your debts, the amounts, and years in which you incurred them, but any information beyond that might be limited. If you want more specifics, you can contact an IRS representative by calling the number listed on your CP49 notice. Besides federal back taxes, the IRS might offset state income tax, state unemployment debts, child support, and other federal debts like student loans.

Can I Dispute My CP49 Notice If I Disagree?

Yes, you can dispute your CP49 notice by calling the number listed on the CP49. Before you call, you should have a compelling argument prepared for why you believe the IRS should not seize your tax refund, and you should also have documentation — copies of prior years’ tax returns, tax payment receipts, etc. — to support your argument.

How Much Time Do I Have to Respond to My CP49 Notice?

You have 60 days from when you receive a CP49 notice to file a dispute, but the earlier you begin this process, the better. Not only does starting early help you avoid running up against any deadlines, but the sooner you file a CP49 dispute, the sooner you can get the changes reversed and receive your full tax refund.

If My CP49 Notice Shows Only Part of My Tax Refund Was Seized, Will the IRS Send Me What’s Left of My Refund?

Yes, if your CP49 notice indicates that the IRS used only part of your tax refund to cover back taxes from a previous year, you will receive the remainder of your refund like normal. You do not have to take any further action to receive your IRS refund.

What Can I Do If My Tax Refund Was Seized and I Still Owe the IRS Back Taxes?

If your CP49 notice shows you still owe back taxes after the IRS applied your refund to your unpaid taxes, you should make payment arrangements — and the sooner, the better, as you will incur interest and penalties for every month you have unpaid taxes.

If you cannot afford to pay the full amount you the owe the IRS, we can help you work out an alternative arrangement with the IRS, such as an Offer in Compromise (OIC), IRS payment plan/installment agreement, or hardship status (Currently Not Collectible).

Do I Qualify for Injured Spouse If My CP49 Notice Indicates My Tax Refund Was Used to Pay My Spouse’s Back Taxes?

If you can prove that your spouse or former spouse was the one who incurred the tax debt listed on your CP49 notice, then you might qualify for injured spouse. You can request injured spouse relief by submitting IRS Form 8379 electronically or by mail.

How Is a CP49 Notice Different from a CP16 Notice?

A CP49 notice and CP16 notice are very similar. A CP16 notice, in addition to informing you that your tax refund was used to pay back taxes, often informs you of an error on your tax return. A CP49 notice is sent strictly to let you know that some or all of your refund is being seized by the IRS.

How Can Wiztax Help?

The key is to get started. Ignoring these notices makes everything more complicated. Call us today at (866) 568-4593 to learn more about how we can help (we never charge for “consultations” or “investigations”). Or start here to take our free online evaluation. Regardless, we promise to save you thousands in fees.

6 Simple Questions. Free Evaluation.


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