What Is IRS Notice CP23?

A CP23 notice means the IRS's records of estimated tax payments you made during the year don't match what you reported on your tax return. The notice proposes additional tax due based on the discrepancy — for example, if you claimed $8,000 in estimated payments but the IRS only shows $6,000 on record, the CP23 will bill you for the tax on the $2,000 difference.

This type of notice is relatively common and has several possible explanations. The most common: you made a payment that was applied to a different tax year by mistake; you included a prior-year overpayment applied forward that the IRS is counting differently; you made a payment that the IRS hasn't yet processed and matched to your account; or there's simply a timing issue with when payments were posted. It can also happen if you moved and a check was lost, or if you used an incorrect Social Security number or tax year when making an estimated payment.

Before responding, locate your records of every estimated tax payment you made: cancelled checks, bank statements, or IRS Direct Pay confirmation numbers. If you have proof that a payment was made and not credited, you can respond to the CP23 by mail with copies of that documentation — the IRS will research the payment and credit it if confirmed. If you made a payment that was applied to the wrong tax year, you can also request that the IRS transfer the credit.

If the CP23 is correct — for example, you mistakenly claimed a payment on your return that you didn't actually make — you'll owe the balance plus any penalty for underpayment of estimated taxes. The underpayment penalty (calculated on Form 2210) can sometimes be waived if there's a good reason you fell short. If you agree with the notice and can't pay in full, the same options available for any unpaid balance apply: installment agreement, Offer in Compromise, or temporary delay in collection.