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CP173B notice: what it means and what to do
Got an IRS CP173B 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 CP173B notice freeWhat the IRS says 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.
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 may be able to remove the penalties
If you had no penalties in the 3 tax years before, filed all required returns, and paid or arranged to pay the tax, the IRS First-Time Abatement policy can remove failure-to-file and failure-to-pay penalties. You can ask in writing or by phone.
Cannot pay it all now? Ask for a payment plan
You can apply for a payment plan on irs.gov. Interest keeps running until the balance is paid, so pay what you can now.
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
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.
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