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In the IRS’s own words · not reviewed by VALID
CP14I notice explained, in the IRS’s own words
We are informing you that you owe taxes and penalties. This happened because you didn't take out the required minimum amount from your individual retirement arrangement (IRA), or you put too much money into a tax-sheltered account.
Read the full CP14I page on irs.gov ↗
What this notice is about
We are informing you that you owe taxes and penalties. This happened because you didn't take out the required minimum amount from your individual retirement arrangement (IRA), or you put too much money into a tax-sheltered account.
What you need to do
Take care of your debt by following these steps:
- Read your notice carefully, it explains how much you owe and how to pay it.
- Pay the amount you owe by the date on the notice.
- Make a payment plan if you can't pay the full amount you owe.
- Contact us if you disagree with the amount.
You can manage your account online
Sign in to your Online Account to:
- Check your balance
- Make payments and view payment history
- Create a payment plan
- Choose how you want to receive messages from us
- Look at your tax records
- See who you’ve allowed to help you with your taxes
You may want to learn more about
- Individual retirement arrangements and how they work.
- How to create a payment plan that suites your needs.
- How to submit an offer in compromise if you are struggling to pay your debt.
- Reasonable cause and how it may apply to your situation.
- Filing your taxes electronically. Filing online can help you avoid mistakes and find credits or deductions that you may qualify for. In many cases you can file for free.
What is a traditional individual retirement arrangement (IRA)?
The money you put in is usually not taxed until you take it out. A traditional IRA is not a Roth IRA or a SIMPLE IRA.
What is a Roth IRA?
A Roth IRA is a retirement plan where the amount you put in is taxable. But what the amount earns and what you take out is not taxable.
What is a SIMPLE IRA?
A SIMPLE IRA is a retirement plan sponsored by your employer. You put part of your pay into it. Your employer matches a certain amount of what you put in. You don't pay tax on what you and your employer put in until you take it out.
How much do I have to take out from my traditional IRA?
You must take out a required minimum distribution (RMD) amount from your IRA starting at age 70½. The amount you have to take out is based on your life expectancy. Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs) PDF has a life expectancy chart. You divide the money in your account by the years of your life expectancy. The result is the minimum amount you must take out. You don't have to take out a minimum amount from Roth IRAs.
What is the maximum amount I can contribute to a tax-sheltered account?
The maximum amount depends on the type of account.
What happens if I can't pay what I owe?
You can make a payment plan if you can’t pay the full amount you owe. You also have other options like an offer in compromise (OIC). If you’re facing financial hardship, you may be eligible to ask for a temporary collection delay until your finances improve.
How can I make a payment plan?
Call us at the toll-free number on your notice to talk about payment plans or learn more about them.
What should I do if I disagree with the notice?
Call us at the toll-free number on your notice. Please have your paperwork (such as cancelled checks, amended return, etc.) ready when you call.
Can the penalty for not taking the full required minimum distribution be waived?
Yes, the penalty may be waived if the account owner establishes that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall. In order to qualify for this relief, you must file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts and attach a letter of explanation. See the Instructions for Form 5329.
Am I charged interest on the money I owe?
Not if you pay the full amount you owe by the date on the notice. However, interest adds up on the unpaid amount after that date.
Will I receive a penalty if I can't pay the full amount?
Call us at the number on your notice if you can't pay the full amount because of financial problems. We may be able to remove the penalty.
What to do next
- Write down the date on the letter today.
- Look the number up on irs.gov yourself. Don’t trust a link or phone number from anyone else.
- If it says you owe money or proposes changes to your return, take it to a licensed CPA, EA or tax attorney before that date.
Not advice. Not a filing. Verify with a licensed professional. Rules change by year and facts.