A CP21E tells you the IRS changed your Form 1040 as a result of an audit. The billing summary shows what changed, such as an increase in tax, interest, and penalties like the negligence penalty. The notice doesn't repeat the examiner's reasoning. Your audit report has the detailed explanation.
Why a CP21E and Not a CP22E
Both notices follow an audit. When the audit leaves a balance due, the IRS uses the CP21E if that tax year was already in collection status or under an installment agreement before the audit change. So if you already owed on this year, the audit adjustment is now added to an account the IRS was already collecting on.
If You Agree
- Pay the amount due by the date on the notice to stop additional penalty and interest.
- If you can't pay in full, pay what you can now and set up a payment arrangement for the rest.
- If you already have a payment plan covering this year, call the number on your notice and confirm how the new balance affects it.
- If you paid in full or made payment arrangements in the past 14 days, the notice says you can disregard it.
If You Disagree
- Call the number on your notice to review your account, or mail the contact section with your documentation.
- If the IRS doesn't hear from you, it assumes you agree.
- If you have information the examiner never saw, ask about audit reconsideration.
Penalties
You can ask the IRS to remove or reduce a penalty. Identify each penalty, explain why it should be reconsidered, sign your statement, and mail it. If a penalty resulted from written advice the IRS gave you, request removal on Form 843.
If You Don't Pay
Interest keeps growing and more penalties may apply. Because this account was already in collection status, don't let the CP21E sit.
If you received a CP21E after an audit and need help with the balance or the audit result, call us at (813) 229-7100.