What These Notices Mean
CP247A and CP247B go to taxpayers who elected to pay their section 965 transition tax in installments over 8 years. Section 965 imposes a tax on certain untaxed foreign earnings of foreign corporations with U.S. shareholders.
The IRS received and processed your income tax return and assessed the tax you reported. The notices explain what happened to payments and credits beyond the installment currently due.
- CP247A: You asked for a refund, or asked to credit an amount to next year. The law doesn't allow it, because your payments and credits don't exceed your total tax liability, including the remaining section 965 amount.
- CP247B: Payments or credits above the installment due for the year are being applied to your next section 965 installment.
In both cases the IRS applies any excess to your next installment, and so on, until the excess is used up or the full liability for that year is paid. The IRS can only refund or credit forward amounts that exceed the full tax liability, including the section 965 portion. CP947A and CP947B are the Spanish versions.
What to Do
- If you agree, no action is needed.
- Keep making your annual installment payments on time. Missing one can bring a failure-to-pay penalty, and the full remaining liability can become due immediately.
- Adjust your plans for next year if you counted on a credit or refund that isn't coming.
- Watch for other notices. CP247A says you will get a separate notice of adjustment. You may also receive balance due notices for the same year.
If You Disagree
Call the number on the notice to review your account with a representative. Have your account information ready. You can also write to the address on the notice and include your identification number, the tax year, and the form number. If the IRS doesn't hear from you, it assumes you agree.
If you received a CP247A or CP247B notice and have questions about your section 965 installments, call us at (813) 229-7100.