CP23: Estimated Tax Payment Difference — Balance Due

Why you might get this

• The estimated tax payments you listed on your return didn't match what the IRS has on record. Estimated tax payments are payments you make during the year instead of having tax withheld from a paycheck.
• You may have typed the wrong amount on the estimated tax line of your return.
• A payment from a prior year may have been applied differently than you expected.
• The IRS may have made other changes while processing your return, which together left you with a balance due.

The deadline

Your notice shows a date to pay by and, if you disagree, a date to call by. Paying by the date printed on your notice helps you avoid extra penalties and interest. If you disagree, contact the IRS at the number on your notice by the date it shows.

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

What to do

1. Read the notice carefully to see exactly what was changed and how it affected your balance.
2. Compare the payments listed on the notice to your own records — make sure every estimated tax payment you made is included.
3. Check whether any payment carried over from a prior year was applied correctly.
4. If you agree: pay the amount owed by the date on your notice, or set up a payment plan if you can't pay it all now.
5. If you agree: correct the copy of your return you keep for your records, but don't mail it to the IRS.
6. If you disagree: call the number on your notice by the date shown, with your tax return and proof of payment (like cancelled checks) ready.
7. Use your IRS Online Account to view your balance, see payments, and set up a payment plan.

What happens if you ignore it

If you don't pay by the date on your notice, you'll usually get a late payment penalty, and interest will keep adding up until the balance is fully paid. The IRS is required by law to charge this interest, and it can't be reduced for first-time relief. If you later prove a payment was misapplied and the IRS fixes it, the penalty and interest tied to it will adjust automatically.

If you think the IRS misapplied or missed a payment, call the number on your notice with your records ready. You may also qualify for free help from the Taxpayer Advocate Service or a Low Income Taxpayer Clinic. To make another correction to your return, you'd file Form 1040-X.

What a CP23 Notice Means

A CP23 notice arrives when the IRS finds a gap between the estimated tax payments you reported and the payments they actually posted to your account. Estimated tax payments are amounts you send in during the year instead of having tax withheld from a paycheck. Because of this difference, you now have a balance due.

The most common cause is a simple typo on the estimated tax line of your return. Sometimes the issue is a payment that was applied to the wrong year or not credited at all.

Start by reading the notice and comparing the payment list to your own records. If everything matches and you agree, pay by the date shown to keep penalties and interest from growing — or set up a payment plan if you need time. If a payment is missing or misapplied, call the number on your notice with your return and proof (like cancelled checks) in hand.

Interest is required by law and keeps building until the balance is paid, though it drops automatically if the IRS reduces your tax.

Solace can watch your IRS account and let you know if your balance or payments change.