The CP23 means the IRS compared the estimated tax payments you claimed on your return to the payments they have recorded on your account, and the numbers don't match. The result is either a reduced refund or a balance due, depending on the direction of the mismatch.
Why the Numbers Don't Match
Estimated tax payments can get misapplied or lost for several reasons. Payments were applied to the wrong tax year. Payments were applied to the wrong type of tax (income tax vs. self-employment tax). A payment was mailed but not received or processed by the IRS. The payment was credited to a spouse's account instead of the joint account. Or you simply miscounted your payments when preparing your return.
How to Verify
Pull your records of every estimated tax payment you made during the year. For each payment, find the confirmation number (for electronic payments), the cancelled check (for mailed payments), or the bank statement showing the debit. Compare your records to what the IRS shows on the CP23.
You can also request an account transcript from the IRS that shows all payments posted to your account. Transaction Code 660 on the transcript represents estimated tax payments. Compare the dates and amounts on the transcript to your records.
If the IRS Is Wrong
Respond to the CP23 with proof of the payments the IRS is missing. Include copies of cancelled checks (front and back), electronic payment confirmations, and bank statements showing the debits. For each payment, identify the date, amount, and the method of payment.
If payments were applied to the wrong year or the wrong account, the IRS can transfer them. You'll need to identify where the payments were misapplied and request the transfer.
Prevention
Use IRS Direct Pay or EFTPS for estimated tax payments. Both provide immediate confirmation and create a clear electronic record. If you mail payments, always include the Form 1040-ES voucher with the correct tax year and your Social Security number. Send via certified mail so you have proof of delivery.
If your estimated tax payments aren't being credited correctly, call us at (813) 229-7100.