IRS Just Sent Me a Notice They are Holding a Refund Due to One or More Unfiled Returns (CP 63) – What Should I Do?

The IRS goes through a series of notices in their collections system, from Cold (barely on the radar) to Smoldering Hot (requires immediate attention). Check out the links to learn more:

CP59 – No Record of a return– Not too scary (Cold).
CP63 – Holding a Refund, Pending One or More Returns– Still pretty cool (Getting warmer, holding your refund).
CP259 – Required to File a Return for Specific Period– (Getting warmer still)
CP2566R- CP 63 Sent Previously- Still Holding Refund– (Warmer still)
CP515I – Reminder Notice- Unfiled Return– (Starting to get uncomfortable)
CP516 – Reminder Notice- Still No Return— (Really getting uncomfortable)
CP518I – Final Reminder Notice- Unfiled Return– Smoldering hot— (This is a final reminder before the IRS assesses a tax)
CP2566- Didn’t Receive a Return- Calculating Tax, Penalties and Interest– (Extremely hot)
LT3219B- Intent to Assess a Tax and Right to Petition U.S. Tax Court– (Smoldering hot)
CP3219N- Notice of Deficiency- No Response Received- Tax, Penalties and Interest Accessed– (Red hot, act now or lose your due process rights (your right to a hearing and a stop of collection)

This notice is CP 63 Holding a Refund, Pending Filing of One or More Returns. CP 63 is the second notice in a series of non-filer notices as listed above.

What can I expect because of this notice?

If the IRS believes you owe taxes, they will use Notice CP63 to inform you they are holding your tax refund until you file one or more returns.

You will need to do one of the following:

File your return as soon as possible. You will want to prepare an accurate and complete return as soon as possible. Filing a return with partial information is counterproductive. If you need more time to file due to missing information, explain that to the IRS.
Explain to the IRS why you don’t feel you need to file. The IRS uses the information from the wage and income transcript to determine what you need to file. If you believe you do not have a requirement to file, you will need to explain that to the IRS. You may want to retrieve a copy of the wage and income transcript by year, to determine why they believe you need to file.

What can I expect next after this notice?

The next notice you will receive is the CP 259, Required to File a Return for one or More Periods. It is not predictable how soon you will receive the CP 259.

What are my options for a solution?

What is my first step?

If you received a letter or notice, a decision must be made. Do you feel confident to handle this situation on your own? If it is a simple issue and you already know the answer, call, or write them. If the issue is more complicated, you need to hire a Certified Tax Resolution Specialist. The IRS or State will take full advantage of your lack of knowledge and experience.

What is Your Next Step?

The next step is to determine if the notice was sent in error. Do you have an outstanding tax liability? Do you have unfiled or incomplete returns?

Is There a Time Limit?

Yes, each letter or notice from the IRS or State will indicate a date that you MUST contact them by. If you need more time, call the number on the notice or letter, and request an extension. DO NOT ALLOW the time to expire without contacting them or hiring a representative to contact them for you.

What You Don’t Want to Do!

What you don’t want to do is nothing. Your tax problems will only get worse if you ignore them. If you cannot pay, there are a number of potential solutions available to those who are otherwise in compliance. In compliance means having all tax returns filed and any balances paid or on a payment plan. If you have outstanding debts or unfiled returns, you need to get hire a Certified Tax Resolution Specialist.

Get Some Help

If you don’t know how to address the issue(s), have unfiled return/unpaid balances or just done feel confident, let the experts at Legacy Tax & Resolution Services represent you. Work with our team of Certified Tax Resolution Specialists to resolve your issue(s) quickly. Best of all, you don’t have to talk to the IRS or State; we can speak on your behalf.