A CP23 notice means the IRS changed your return because the estimated tax payments you claimed don't match the payments posted to your account, and the change leaves you with a balance due. The notice can also cover other changes made while processing your return. This is a common problem for freelancers, gig workers, retirees and small-business owners who pay quarterly. Often the cause is a payment that was applied to the wrong year or a typing error on the return, which you can fix with a phone call and proof.
Why you got a CP23
The IRS compares the estimated tax payments you list on your return with the payments it actually has for that tax year. A CP23 is sent when your return claims more than the IRS can find. Common causes:
- A payment was applied to the wrong tax year or the wrong spouse's account.
- A typo on the estimated tax line of the return. The IRS says this is the most common cause when people who don't pay estimated tax get a CP23.
- The credit from last year's overpayment was smaller than you thought, perhaps because last year's return was changed too (see CP10).
- A payment was made but not yet posted, or a payment bounced.
- Payments were counted twice on the return.
What the CP23 says
Look for:
- A list of estimated payments the IRS credited for the year, with dates and amounts.
- Any prior-year overpayment applied to the year.
- "What we changed on your return", including any other corrections.
- The amount you owe and the date to pay.
- A date to contact the IRS if you disagree, and the toll-free number under "Where to find more information."
What to do
- Compare the IRS's payment list with your records. Check bank statements, EFTPS or IRS Direct Pay confirmations, card receipts and canceled checks for every payment for that tax year.
- Check the prior-year credit. Make sure the amount carried from last year matches what last year's return and any notices show.
- Look at your IRS Online Account. It shows the payments posted to each year, which can reveal a payment sitting in the wrong year.
- Choose your path below and act by the date on the notice.
- Correct your own copy of the return. Don't send it to the IRS.
If you agree
Pay the amount owed by the date on the notice to avoid more penalties and interest. If you can't pay in full, set up a payment plan; our payment plan calculator can help you estimate a monthly amount.
If a payment is missing or misapplied
Call the number in the "Where to find more information" section. Have your tax return and proof of payment ready, such as a canceled check, bank statement or payment confirmation. The IRS will discuss the issue and tell you what to send. If it fixes a misapplied payment, the late payment penalty and interest adjust automatically.
If you disagree for another reason
Call the number on the notice by the date shown and explain. If another correction on the notice is wrong, the IRS may ask for documents. If you need to make a separate correction to the return, file Form 1040-X; see our amended return guide.
The CP23 may also mention an estimated tax penalty. That is a separate charge for not paying enough tax during the year through withholding or estimated payments. The IRS explains it in Tax Topic 306 and Form 2210. Interest, by contrast, is required by law and can't be removed for reasonable cause, but it drops automatically if the tax or penalty is reduced.
What happens if you ignore it
If you don't pay or call, the balance grows with interest and the late payment penalty. You will receive reminder notices like the CP501 and CP503, then a CP504 notice of intent to levy. If a payment really is missing, waiting only makes it harder to trace. If you can't pay, see what to do when you can't pay your taxes.
Is this notice real?
The IRS sends CP23 notices by regular mail. Confirm the balance and payments in your IRS Online Account, or call the IRS at a number listed on irs.gov. The IRS never demands payment by gift card, prepaid debit card or wire transfer. See our guide to IRS scams.
Frequently asked questions
I don't pay estimated taxes. Why did I get a CP23?
The IRS says the most common cause is an entry on the estimated tax line of the return by mistake. Call the number on the notice to sort it out.
What if I find the IRS misapplied my payment?
Call the number on the notice with your return and proof of payment. Once the IRS moves the payment to the right year, related penalties and interest adjust automatically.
Can the IRS remove the interest?
The IRS says it cannot reduce interest for reasonable cause or first-time relief. Interest only goes down if the tax or penalty it is based on goes down. Penalties are different; see penalty relief.
How can I avoid this next year?
Before filing, check the estimated payments posted to the year in your Online Account and use those exact amounts. Use the self-employment tax calculator to plan the next year's quarterly payments.
Sources
- Internal Revenue Service (IRS), "Understanding your CP23 notice". irs.gov
- IRS, Publication 594, "The IRS Collection Process" (Rev. 1-2026). irs.gov
- IRS, Publication 5, "Your Appeal Rights and How to Prepare a Protest if You Disagree" (Rev. 4-2021). irs.gov
- IRS, "How to know it's really the IRS calling or knocking on your door". irs.gov
IRSV.com is an independent guide and is not affiliated with the IRS. This page is general information, not tax or legal advice. Rules change; confirm details on IRS.gov or with a tax professional. Found an error? Tell us.