CP47A, CP47B, and CP47C notices tell you the IRS received and processed your income tax return and assessed the tax you reported, including tax under Internal Revenue Code Section 965. Section 965 imposes a one-time transition tax on untaxed foreign earnings of foreign corporations with U.S. shareholders. You elected to pay your net Section 965 tax liability in installments over 8 years under Section 965(h).

The Three Versions

  • CP47A: You asked for a refund or to credit an overpayment to next year. The law doesn't allow it, because your payments and credits don't exceed your total tax liability, including the deferred Section 965 amount. Your requested refund or credit elect went toward the Section 965 liability. You'll get a separate notice of adjustment.
  • CP47B: Payments or credits above the installment currently due are applied to your next Section 965(h) installment, and so on, until the excess is used up or the liability is paid.
  • CP47C: Confirms that tax including your Section 965 liability was assessed.

Why Your Refund Didn't Come

The IRS can only refund or apply as a credit elect the payments or credits that exceed your full income tax liability for the year, including the net Section 965 liability. Until that whole amount is covered, extra payments go to your future installments.

What to Do

  • If you agree, no action is required.
  • Keep making timely annual installment payments. Missing or underpaying any installment can bring a failure-to-pay penalty, and the full remaining net liability may become due immediately.
  • Watch for CP56, the annual Section 965(h) installment notice that shows the amount and due date of each installment.
  • Individuals with an unpaid net Section 965 liability file Form 965-A with their return each year until it is paid in full.

If You Disagree

Call the number on the notice to review your account with a representative. Have your return and payment records ready. The IRS will assume you agree if it doesn't hear from you. You can also write to the address on the notice. Include your taxpayer identification number, the tax year, and the form number.

If you have a Section 965 installment balance and need help sorting it out, call us at (813) 229-7100.