CP16: We Fixed Your Return and Used Your Refund to Pay a Debt

Why you might get this

• The IRS found and corrected one or more errors on your tax return.
• You or your spouse owe other tax debts (money owed for a different tax year or account).
• The IRS applied all or part of your refund to pay down those debts.

The deadline

If you disagree with the changes, you need to contact the IRS by the date printed on your notice. That date matters: if you miss it, you lose the formal right to have the changes reversed and the right to appeal the decision to U.S. Tax Court. If you agree with the changes, you don't need to respond at all.

This notice doesn't carry a fixed response deadline, but it still deserves attention — see what to do below.

What to do

1. Read your notice carefully to see what was changed and how it affected your refund.
2. If you agree, do nothing. If you're still owed a refund, expect a check in about 4 to 6 weeks.
3. Update your own copy of your return to match the changes, but don't mail it to the IRS.
4. If you disagree, call the phone number on your notice by the date shown on it.
5. Check whether you still owe a balance by signing in to your IRS Online Account, and pay it or set up a payment plan if needed.
6. If your refund was applied to your spouse's debt, look into innocent or injured spouse relief (Form 8379).

What happens if you ignore it

If you agree with the changes, nothing bad happens by not responding. But if you disagree and don't contact the IRS by the date on your notice, you lose the formal right to have the changes reversed and the right to appeal to U.S. Tax Court. Any remaining balance you still owe will keep collecting interest and possible penalties, and future refunds may be applied to it.

If the IRS doesn't get information supporting your original return, it may send your case to audit, and audit staff would contact you within about six weeks to explain the process and your rights. If you disagree with the debt your refund was applied to, or think you qualify as an injured spouse, consider getting help from a tax professional or a Low Income Taxpayer Clinic.

What a CP16 Notice Means

A CP16 notice tells you two things. First, the IRS found one or more mistakes on your tax return and corrected them. Second, because you or your spouse owe another tax debt, the IRS used all or part of your refund to pay that debt down.

Start by reading the notice closely. The "What we changed on your return" section explains what was adjusted and how it changed your refund. If you agree with the changes, you don't have to do anything. If you're still owed money, a refund check usually arrives in about four to six weeks.

If you disagree, call the phone number on your notice by the date it shows. Calling is often the fastest way to sort out return errors. If the change involves your spouse's debt, you may qualify for injured spouse relief using Form 8379.

If you still owe a balance, interest and penalties can keep adding up, so consider paying in full or setting up a payment plan through your Online Account.

Solace can keep an eye on your IRS account so you know right away if your balance or refund status changes.