VALID › Notice Library › CP173B notice
In the IRS’s own words · not reviewed by VALID
CP173B notice explained, in the IRS’s own words
We reduced or removed the penalty for underpayment of estimated tax reported on your tax return because the penalty entered on your return exceeds the maximum amount we can legally charge.
Read the full CP173B page on irs.gov ↗
What this notice is about
We reduced or removed the penalty for underpayment of estimated tax reported on your tax return because the penalty entered on your return exceeds the maximum amount we can legally charge.
What you need to do
- Review the account information shown in your notice.
- Compare your records with ours, and if we removed or reduced your penalty in error, please return the refund with your explanation.
Why did you reduce or remove the penalty?
Our calculation, which we based on your account information when we received your return, shows the penalty you reported is more than the penalty due. If your address is within a federally declared disaster area, the adjusted penalty may be the result of an automatic waiver we applied.
What should I do if I disagree with the correction?
Call the toll-free number listed on your notice to explain why you disagree with our correction. If we agree with your explanation, we’ll tell you what to do next.
The notice says I’ll receive a refund, but I haven’t received it yet. When will I receive the refund?
Before we can issue a refund, we must use it to pay any other taxes you may owe. Additionally, we may use your refund to pay child support, state taxes owed, or any other debts you legally owe that we’re required to collect. We also might hold your refund if you haven’t filed all required returns. To check the refund status, call the telephone number shown on your notice.
Tips for next year
To avoid a similar penalty next year, the following rules generally apply:
- Installment payments are due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. If any date falls on a Saturday, Sunday, or legal holiday, the installment is due on the next regular business day.
- Corporations must use electronic funds transfer to make instalment payments of estimated tax.
- Use Form 1120-W, Estimated Tax for Corporations, as a worksheet to compute estimated tax. See the Instructions for Form 1120-W.
- If a corporation overpays estimated tax, it may be able to get a quick refund by filing Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax. See the Instructions for Form 1120 – Schedule J, Part III, line 15.
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.