IRS CP260 Notice: A Payment Was Removed From Your Business Account

What This Notice Means

CP260 tells a business that the IRS reversed a payment or credit on one of its tax accounts, such as a Form 941 quarter, and the account now has a balance due. The individual version of this notice is CP60.

Common reasons:

• A payment was applied to your account by mistake. It belonged to another taxpayer or another account, and the IRS moved it.
• A credit was allowed on your account and later removed.
• Another adjustment changed your account.

The notice shows a billing summary: the balance before the adjustment, the misapplied payments removed, any failure-to-pay penalty, interest, and the amount due by a specific date.

What to Do

• Pull your payment records for the tax period: EFTPS confirmations, bank statements, canceled checks.
• Figure out where the removed payment came from and whether it was really yours.

If you agree: Pay the amount due by the date on the notice. You can pay through EFTPS or by check payable to the United States Treasury. Write your EIN, the tax period, and the form number on the check. If you can't pay it all, pay what you can and call the number on the notice to discuss options.

If you disagree: Call the number on the notice or write back using the contact section. Send proof of the payment. If the IRS finds a payment wasn't credited correctly, it transfers the credit to the right account.

Deadlines

Pay within 21 calendar days of the notice date, or 10 business days if the amount due is $100,000 or more. If you don't respond, the IRS assumes you agree. Interest keeps running and penalties can grow.

Penalty Relief

If you can show reasonable cause, such as serious illness or a disaster that destroyed your records, you can ask the IRS to remove or reduce the penalties.

If a CP260 hit your business account and you can't sort out where the payment went, call us at (813) 229-7100.