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CP156 notice: what it means and what to do
Got an IRS CP156 notice? Here is what it means, your deadline, what to check before you answer, and how to reply. Check your own letter free: it stays on your phone.
Check my CP156 notice freeWhat the IRS says this notice is about
We applied the sequestration reduction rate to the refundable portion of your credits because the Balanced Budget and Emergency Deficit Control Act (BBEDCA) of 1985 requires it. We made adjustments using the information you provided.
We received your forms, which may include:
- Form 990-T, Exempt Organization Business Income Tax Return:
- Form 8941, Credit for Small Employer Health Insurance Premiums , for the cited tax period claiming the Credit for Small Employer Health Insurance Premiums, or
- Form 3800, General Business Credit, claiming the Elective Payment Election (EPE).
Your deadline
Answer by the date printed on your notice. If there is no date, answer as soon as you can, and call the number on the notice if you need more time.
What to check before you answer
You have 60 days to disagree
If you disagree with the change and ask in writing within 60 days of the notice date, the law requires the IRS to reverse it. If the IRS still disagrees, it must then use the regular process, which keeps your appeal rights.
Is this letter really from the IRS?
The IRS writes first by mail. A real letter shows a notice or letter number, your name and part of your tax ID number. The IRS does not ask for payment by gift card, crypto or wire transfer. If in doubt, sign in to your IRS online account, where many notices are listed.
Common questions
What is sequestration and how does it affect my Credit for Small Employer Health Insurance Premiums?
See Small Business Health Care Tax Credit Questions and Answers: Calculating the Credit for more information.
How does sequestration apply to an Elective Payment Election?
See FY 2024 effect of sequestration on Inflation Reduction Act of 2022 (IRA) Elective Payment Elections (EPE) for more information.
Can I appeal the adjustment that reduced my refund amount? (updated Mar. 25, 2026)
No, this change is required by the Balanced Budget and Emergency Deficit Control Act BBEDCA of 1985, as amended, so it can’t be appealed through the regular appeal process. However, if you have questions about the adjustment, please contact us at 877-829-5500 .
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